SaaS Valuation Calculator
Estimate your SaaS company's enterprise value using ARR multiples. Calculate both enterprise value (EV) and equity value based on your growth rate and financials.
Estimate Your Valuation
Year-over-year ARR growth
Leave blank to use growth-based estimate
Adjust for Cash & Debt (for Equity Value)
The Formulas
Enterprise Value (EV) represents the total value of the business operations, regardless of how it's financed.
Equity Value is what shareholders actually own. It adjusts EV for cash (adds value) and debt (subtracts value).
Typical ARR Multiples by Growth
These are rough guidelines based on 2024 market conditions. Actual multiples vary significantly based on market conditions, profitability, retention, and other factors.
Note: Public SaaS multiples have ranged from 3x to 30x+ depending on market conditions. Private company valuations are typically lower.
Understanding SaaS Valuations
Why ARR Multiples?
SaaS companies are typically valued on revenue multiples rather than earnings multiples because:
- Recurring revenue is predictable. ARR represents contractually committed revenue, making it a reliable baseline.
- Growth matters more than current profit. High-growth SaaS companies often reinvest in growth, making profit metrics less meaningful.
- Standard metric. ARR multiples are the industry standard, making comparisons easier.
What Drives Multiples Higher?
The growth rate is the biggest factor, but these also matter significantly:
- Net Revenue Retention (NRR). NRR above 120% commands premium multiples.
- Gross margins. Higher margins (80%+) support higher multiples.
- Market size. Large TAM allows for sustained growth.
- Rule of 40. Growth % + Profit margin % above 40 is a positive signal.
- Capital efficiency. Lower burn rate relative to growth is valued.
Enterprise Value vs Equity Value
Enterprise Value (EV) measures the value of the operating business. It's what an acquirer would pay for the business operations, ignoring how it's financed.
Equity Value is what the shareholders own. If you have $2M cash and $500K debt, your equity value is $1.5M higher than your EV.
For fundraising discussions, VCs typically discuss post-money valuation, which is closer to equity value. For M&A, buyers often quote enterprise value.
Important Caveats
This calculator provides rough estimates based on general market data. Actual valuations depend on:
- Market conditions. Multiples can swing 50%+ based on public market sentiment.
- Stage. Early-stage companies may trade at different multiples than growth-stage.
- Profitability. Profitable companies often command premiums.
- Strategic value. Acquirers may pay more for strategic fit.
- Competition. Multiple interested buyers can drive up price.
For actual valuation needs, consult with investment bankers or experienced advisors who can analyze your specific situation.
Related Metrics
- EV/Revenue Multiple — how the market values your revenue
- LTV:CAC Ratio — indicator of unit economics health
- Burn Multiple — efficiency of growth investment
- MRR — monthly view of recurring revenue
Track the metrics that drive valuation
GrowPanel helps you monitor ARR growth, retention, and other metrics that impact your company's value. Real-time insights for data-driven decisions.
