The Beginning of Consolidation in SaaS

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tomtunguz.com

Three billion dollar SaaS acquisitions were announced this week with Salesforce paying $2.9B for DemandWare, an eCommerce platform provider, Vista Equity Partners paying $1.8B for Marketo, the marketing automation company, and Thoma Bravo buying Qlik, a business intelligence companies for $2.9B. In addition to the absolute size, the first two trans transactions distinguish themselves high valuation multiples of 12x and 8x on trailing revenues.

Marketo generates more revenues is growing faster and burning less cash than OPower and Textura. Presumably, these three factors and the market opportunity afforded to a horizontal SaaS company led to a greater multiple.

 

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