SaaS Is Back

So it was just 8 months ago we wrote “Is SaaS Dead?” and the post not only took off, it summarized a zeitgeist, a malaise, a feeling across much of B2B at the start of 2024. 

That SaaS was Dead.  A combination of AI and buyer retrenchment had killed it.

What a difference 8 months makes.  

It’s not 2021 again, but so much has changed for the better as the year ends:

• Many top SaaS and Cloud stocks are up +40%-60% or more in the back half of the year.  Not all of them, but so many.  This makes everyone feel … richer.  They are richer.
• Many top SaaS and Cloud leaders have seen growth re-accelerate.  This is a bigger deal.  Shopify is growing far faster today at $9B ARR (a stunning 26%) than it was just a year before (21%).  Even folks that were struggling to rebound from pandemic-fueled growth like Twilio have bounced back, to an extent at least.  Twilio is now above 10% growth again.  This isn’t 2020 levels of growth, but acceleration is acceleration.
• Many SaaS leaders are now benefitting from selling AI.  Salesforce has seen a boost.  Dialpad has seen stunning re-acceleration, from $200m ARR last year to $300m+ this year.  Not everyone has benefitted from selling AI to their base.  But a number have.
• IPOs are restarting — and really good ones are coming.  There have only been 4 SaaS IPOs since 2021, but they’ve done well, and ServiceTitan had a big pop in its recent IPO. The pipeline looks strong for the back half of 2025 and into 2026, from Canva to Databricks to Stripe to Wiz to Snyk and on and on.  More liquidity makes everyone feel better, for many reasons.
• Overall SaaS multiples for public companies aren’t that high, but the leaders are trading at 20x ARR now.  That fuels VC optimism,.
• The stock market overall has had a great year.  This just makes everyone in tech feel better.  We all benefitted to some extent from the Nvidia+ stock run up.

Let’s take a look at the market cap / stock price of some SaaS leaders:

That would anyone feel more bullish.

Now not everyone is up. Things are still tougher for many.  Overall, public SaaS stocks still lagged the S&P for 2024.  And … things weren’t quite as tough as many saw them as the start of 2024.  So even a modest uptick as the year closes out really does feel like Better Times.

But yes, SaaS is back.  A new SaaS, perhaps.  Changed by AI and different times, and fueled in many cases by consumer spend as much as business spend, for now. 

But it’s back.  

A few related posts here:

• Zscaler is growing 30% at $2.5 Billion in ARR
• Samsara is growing 36% at $1.26 Billion in ARR
• Klaviyo is growing 39% at $800m+ ARR
• Monday is growing 34% at $1 Billion in ARR
• Shopify is growing 26% as it approaches $9 Billion in ARR
• Crowdstrike is growing 33% at $3.65 Billion in ARR

And a great deep dive with Samsara’s CEO on why they are on fire here: