SaaS, a +$700bn market in 2027 đź’°

And also: M&A multiples for SaaS 🔢, KnowBe4 getting acquired 🛒, New CFO at Squarespace 👨‍💼, and more...

This is the Cloudly Update. Helping you stay above the Clouds.

Today we bring you:

  • M&A multiples for SaaS

  • SaaS market growth estimates

  • KnowBe4 to be acquired

  • New CFO to Squarespace

  • Factorial is Europe's newest SaaS unicorn

  • Google Cloud and crypto payments

  • Azure story x2

Alongside multiples of publicly traded SaaS companies, public SaaS acquisitions are some of the most relevant to deriving SaaS revenue multiples.

Data for public SaaS company acquisitions since 2021

  • Only 16 public companies have been acquired, with a median price of $7.3bn

  • $5bln+ in valuation, the universe of corporate acquirers and private equity firms can afford you to shrink

  • 40 IPOs in 2021, NIL in 2022

  • Sold for 9.1x trailing twelve-month revenue of $795mm with YOY growth of 19%, impressive for companies with nearly $1bln of revenue

  • On the median, the EBITDA margin was 6%

  • Only two were strategic (Salesforce and Broadcom)

  • Very few firms can afford a multi-billion-dollar acquisition

  • The highest multiple of the group is Salesforce’s, paying 33x revenue for Slack

Non-SaaS Multiples

  • Recent acquisitions of 4 tech companies that aren’t SaaS, three were bought by a strategy with substantial premiums and were profitable with excellent growth.

According to Fortune Business Insights, the global SaaS Market Size is projected to hit USD 716.52 Billion in 2027 at a CAGR of 27.5% [2022-2027].

Increasing investments by end-use enterprises in the cloud-based solution and advancing portfolio of products are driving the growth.

Regional Insights

  • North America anticipated remaining at the forefront at USD 57.30 billion in 2020

  • The Asia Pacific displays a considerable share

Pre and Post COVID-19 Impact

Amid the crisis, demand for cloud computing increased. Key players come up with strategies to restructure their business model

Competitive Landscape

Preserving position by concentrating on novel launches, collaborations & mergers, and procurements

Market Segmentation

  • By deployment type - public, private, and hybrid cloud

  • By application - CRM, ERP, content, collaboration & communication, business intelligence & analytics, human capital management

KnowBe4, a cybersecurity training software company, is to be acquired by private equity firm Vista Equity Partners for $4.6 billion, which amounts to $24.90 per share. The buyout offer was received a month ago, and is expected to complete the transaction by the first half of 2023.

More

  • Proposed price at 46% premium to the closing price of KnowBe4’s stock on September 16

  • Raised $144 million through IPO and going private about 18 months after listing

  • 36% increase in second-quarter revenue at $80.8 million

  • Annualized recurring revenue stood at $328.3 million as of June 30

  • KKR is a major stakeholder with a $300 million investment

  • Products used by more than 52,000 organizations

Squarespace announced the appointment of Nathan Gooden as CFO and Treasurer, effective October 18, 2022

He operated Amazon Alexa WorldWide as the CFO for the past five years. Nathan has more than two decades of financial leadership in the technology sector. He has served multiple companies in payments, social commerce, and consumer electronics.

Barcelona startup Factorial raised $120 million a Series C funding, the biggest coming out of Europe. Valued at $1 billion, building enterprise-quality HR for SMBs.

More

  • Doubles its valuation a year ago when it raised $80 million

  • Funding for technology and product expenses, acquisitions, and geographical expansion will be used

  • It has 7,000 customers across Europe, the most prominent segment being the Latino

  • It is growing by over 200% since 2019

  • Customers include divisions of Booking.com, Freshly, Vicio, and more

Google announced a partnership with Coinbase, the operator of a cryptocurrency exchange in the U.S., and lets a subset of its customers pay for cloud services in cryptocurrency.

More

  • Extends its BigQuery services for analyzing large amounts of information for useful business insights

  • Will deliver “machine learning-driven crypto insights” and enhance the global reach of services

  • Will help customers host blockchain nodes (servers that play a central role in processing blockchain transactions)

  • Will be one step closer to their goal of making building in Web3 faster and easier

A new partnership between Cisco and Microsoft will soon offer the ability to run Microsoft Teams natively on Cisco Room and Desk devices Certified for Microsoft Teams.

Six of Cisco's most popular meeting devices and three peripherals will be certified for Teams. The first peripheral - Cisco Desk Camera 4K, will be available by October 2022.

The first wave of devices, expected to be certified by early 2023.

Microsoft to launch a database migration tool to help Oracle users shift to a PostgreSQL-managed service on Azure. Offers Azure Data Studio, to help switch from Big Red to a Microsoft PostgreSQL-compatible managed service.

Will reduce administration overhead and optimize database license costs.

Customers to get sizing recommendations. Works for large workloads up to 100TB

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