Every year I love pouring over the Inc. 500 (now Inc. 5000). When I first read Inc. magazine in high school in the late 90s, I made it a personal goal to win the award. As a founder/CEO, I first succeeded with Hannon Hill (#247 on the 2007 Inc. 500) and then with Pardot (#172 on the 2012 Inc. 500). And, now, as a co-founder/chairman, succeeded with Rigor this year (#430 on the 2017 Inc. 500).
When looking through this year’s list, a number of well funded SaaS startups appeared:
- Gainsight – $23.1M, 3,843% growth, #102
- Bizible – $3.4M, 2,405% growth, #179
- Domo – $79.9M, 2,250% growth, #192
- GuideSpark – $24.8M, 525% growth, #856
- Smartsheet – $64.3M, 425% growth, #1021
Let’s take Gainsight as it has the highest growth rate and look at some high end SaaS valuations from their funding rounds.
Gainsight Notes
- Funding rounds listed in Crunchbase:
- May, 2017 – $52M Series E
- Nov, 2015 – $50M Series D
- Oct, 2014 – $25M Series C
- Nov, 2013 – $20M Series B
- Recognized revenue by year:
- 2016 – $23.1M (based on the 2017 Inc. 500 award)
- 2015 – $13M (guess)
- 2014 – $5.6M (based on the 2015 Inc. 500 award)
- 2013 – $2M (guess)
- Estimated end of year run rate (run rate is always ahead of recognized revenue for fast growing companies):
- 2016 – $30M
- 2015 – $17M
- 2014 – $8.5M
- 2013 – $3.5M
- Published valuations:
- Nov, 2015 – $348M post-money (source)
- Estimated valuation as a multiple of run rate:
- Nov, 2015 – $16M run rate with a $298M pre-money valuation making a valuation multiple of 18.6 times run rate
- Nov, 2013 – $3M run rate with an estimated $80M pre-money valuation making a valuation multiple of 26.7 times run rate
SaaS valuations are typically in the range of 3-5x run rate and can go as high as 10x run rate for the fastest growing startups (see SaaS Funding Valuations Based on a Forward Multiple). When valuations are 18 and 26 times run rate, it’s a bet on building the category winner and a different game compared to 99% of the venture capitalists out there.
Want to explore more? Check out the 2017 Inc. 5000 and Crunchbase.
