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Interesting Chart of SaaS Finance
Filed in archive SaaS by steve on April 6, 2005
saasgraph.JPG

Torsten Jacobi recently kicked off some of the Software as a Service coverage (SaaS) at Creative Weblogging. On a related subject to SaaS, Torsten also pointed me to an interesting presentation (note before clicking: PowerPoint file) given in a Triple Tree/Software & Information Industry Association webcast at the end of last year.

What caught my eye was slide 22, which depicts (click here to
enlarge) some unique financial measures of the SaaS industry by
TripleTree (a middle-market investment banking firm).



Key takeaways are that:



  • The returns for SaaS investments are outperforming peer investments

  • With respect to SaaS, only the search engine software market is trading at higher enterprise value to revenue multiples.



If you believe that capital markets are mostly rational, then these measures indicate that the public believes that significant growth is coming down the road. Although I hate to reduce things to such a level, it's not just a bunch of people making forecasts on projections. People are additionally putting money behind the deals.



Steve Shu



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Tags: SaaS  saas 
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