Since Salesforce went public in 2004, there have been almost 70 other pure-play SaaS/cloud companies that have followed them in the public markets, and more and more go out each year. In 2018 alone, which was a banner year for SaaS IPOs, there were 16 high-growth SaaS companies filing S-1s. Many private SaaS companies believe that an IPO and/or reaching $100M in revenue or ARR (annual recurring revenue) is the end state when in reality SaaS companies demonstrate staggering returns in the public markets well beyond $100M in revenue. The United States economy, as well as the global economy, have recovered dramatically since the 2008/2009 Great Recession, but SaaS companies on average have outperformed the broader market by a massive margin. The two “SaaS Crashes” post-Great Recession have occurred in early 2014 and early 2016, and apart from those two time periods, it’s been mostly up and to the right. Given all the recent IPOs and high trading multiples, it’s interesting to look at the historical performance of each public SaaS company.

Most high-growth SaaS businesses (public and private) are valued on a multiple of forward revenue with enterprise value over NTM (next-twelve-months) as a primary metric. What is the right price for a high-growth public SaaS company? The all-time average has been ~8x but more recently the weighted NTM revenue multiple for all high-growth SaaS companies is ~15x, which has been propelled by recent IPOs like Zoom (ZM), CrowdStrike (CRWD), and Slack (WORK) which are trading at high NTM revenue multiples — ZM at 41x, CRWD at 34x and WORK at 28x (as of 9-July-2019). In the recent week or so, the high-growth SaaS weighted multiples have finally eclipsed the Q1'2014 highs.

Given where we’re at in the market cycle — which seems like a 10+ year SaaS bull run — I wanted to dig into the trading history of each pure-play SaaS/cloud IPO and how they have traded from inception → today. For the purposes of this analysis, I left out companies like Microsoft and Adobe and only included high-growth, pure-play SaaS/cloud companies that have gone public in the past 15 years — Salesforce is the first company in this comparable set. I looked at all 70 SaaS companies that have filed S-1’s publicly and tracked the trading history from IPO → today (or when they were acquired). 67 of them made it to trading as AppDynamics, Adaptive Insights, and Qualtrics were acquired days before trading.

Below are logos of all the companies used in this analysis (sorted by IPO date from left to right):