The 100x Club
“You know what’s cooler than a billion dollars?”
A billion dollar valuation at a 100x revenue multiple! 🤩
The Information wrote a great article last week on “The 100x Club,” which is the group of SaaS startups raising money at 100x revenue multiples. They highlight Retool, a low code development tool, which just raised a funding round at a ~$1B valuation on $10M of ARR, as the latest member of this club.
Some of the other interesting data points on valuation:
- The total valuation of the top 100 private cloud software companies is ~$270B, which equates to roughly ~25x ARR
- Dropbox’s last private valuation was $10B, their IPO valuation was $9.2B, and they now trade at $7.5B
- Notion raised at a $2B valuation on $30M of ARR (67x), and Postman raised at a $2B valuation with <$25M of ARR (80x)
The Information attributes sky-high startup valuations to a few factors:
- VCs have a lot of cash - VCs raised $60B in 2020 vs. $18.5B in 2010 - and there aren’t enough good investment opportunities
- Some investors think “entry valuations are insignificant” if startups are growing quickly
- As public company valuations increase, private company valuations increase as well