Hey, I'm Dan! I invest in startups at Madrona and write the DL, a weekly newsletter about tech in the Pacific Northwest

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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:

  1. VCs have a lot of cash - VCs raised $60B in 2020 vs. $18.5B in 2010 - and there aren’t enough good investment opportunities
  2. Some investors think “entry valuations are insignificant” if startups are growing quickly
  3. As public company valuations increase, private company valuations increase as well


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