2025 Market Snapshot
Based on reported broker data and private deals:
- Sub-$1M ARR: 2.0x–4.5x ARR depending on churn, concentration, and margin.
- $1M–$5M ARR: 3.5x–6.5x ARR with healthy growth and diversified channels.
- Growth-stage with profit: 5x–9x ARR when net retention is strong and burn is low.
- VC-backed with burn: Revenue multiples compress unless you post 40%+ growth.
Multipliers Buyers Reward
- Net revenue retention above 100%.
- Gross margin over 75% with low support costs.
- Diverse acquisition mix (paid, organic, partner, outbound).
- Documented handoff and minimal key-person risk.
Factors That Compress Multiples
- Churn above 6–8% monthly or heavy logo churn in SMB.
- Single integration partner accounting for >30% of revenue.
- Large services component that lowers gross margin.
- Unclear contracts or unpaid invoices over 60 days.
Quick Wins to Move Up
- Convert monthly users to annual plans before marketing the sale.
- Increase ARPU with add-ons or tiered limits.
- Strengthen security posture (SSO, audit logs, SOC-lite policies).
- Package clean cohort charts in your data room.
How to Position Your Ask
Buyers benchmark against similar transactions. Anchor your multiple with proof:
For Profitable SaaS
- Show trailing twelve months SDE and normalized adjustments.
- Share retention cohorts and payback to prove durability.
- Offer a short seller note only if needed to close the gap.
For Growth-First SaaS
- Highlight efficiency metrics (Rule of 40, burn multiple).
- Map your pipeline, win rates, and sales capacity plan.
- Share a 12–18 month roadmap tied to revenue milestones.
Tools to Benchmark Yourself
Use these free tools to check where you sit in 2025 multiples: