How Long Does It Take To Get to A Billion+ Acquisition in SaaS? About 10 Years

The other day Coupa did its first $1B+ acquisition, of 18+ year old Llamsoft.  It took Llamasoft 18 years to get to $100m ARR, and 18 years to a $1B+ exit.

There should be a lot more billion+ acquisitions in Cloud and SaaS, if only because there are more decacorns to buy them. Salesforce, PayPal, Adobe, Shopify and Zoom are now worth $100B+.  Hubspot and Twilio and Coupa and Wix are worth $10B+.  They all can buy something, or really several startups like Twilio has, for $1B+ now:

So how long does it take?  There’s not quite as much data as with IPOs and unicorn VC rounds.  But it looks like about a decade, which is what you’d expect:

A few got there a bit faster — Looker, Velocity and iZettle got there fast, in 6-7 years.  Auth0 got to a $6.5B acquisition by Okta is just 8 years (to signing).  ClickSoftware took 22 years, by contrast!

(Note: the above list isn’t perfect, and I took out public SaaS companies that were acquired.  But it gives you a sense).

There are 500+ and Cloud unicorns today and there will soon be 100 public SaaS and Cloud companies  But being acquired for $1B+ is a little different … it’s some big tech company coming up with a ton of cash (sometimes stock, but you get the point) to buy you.  It’s a bigger deal than a VC firm investing at $1B pre-money, in many ways.

But there will be a bunch more $1B+ acquisitions coming in SaaS.

You can’t get there in just a few years.  Go long.

Published on November 3, 2020

Pin It on Pinterest

Share This