So in the era of 2021, the time of 1,000 unicorns, it seemed like everyone and anyone someday, just might be a decacorn someday.  And then in 2022, the markets crashed hard in SaaS.

Since then, overall, SaaS multiples have stayed relatively low, at 6x ARR on average — for public SaaS companies.  For really, really good companies at nine figures in ARR 🙂

But then in 2023 and into 2024, three things happened:

  • First, almost everyone got much more efficient.  Almost every public SaaS leader has strong, positive operating margins now, often approaching 20% or more.
  • Second, folks just kept on growing.  HubSpot crossed $2B in ARR, Monday and Confluent are crossing $1B ARR, and so on.  Sometimes, growth slowed a bit from the crazy pace of 2021.  But growth continued for many leaders.  And some like Cloudflare and Mongo hardly saw growth slow at all.
  • So, a subset of SaaS and Cloud leaders have gone on a public market run lately.  Not everyone.   Many favorites from Zoom to Twilio have struggled to grow, and others like Bill have done well but suffer now from low ARR multiples.  But many of the best now trade at 10x-15x ARR, or even more.

So 3 years of strong growth, combined with 10x-15x ARR for the Best of the Best in SaaS has lead to … a revivial of the decacorn.

Monday and Confluent and Procore and Gitlab are now worth $10B+ for the first time (or almost first time).  Samsara has rocketed to $17B, and UiPath and Elastic have bounced back to $12B+.  HubSpot and Mongo have stated strong at $30B.

Bottom line, there are more SaaS and Cloud leaders at the dark blue line of a $10B+ market cap than there has been in quite a while.

It doesn’t mean it’s easy.  To be a decacorn in 2021, it took a lot of growth, but not really any efficiency or profits.   Today, it generally takes $1B+ ARR, strong growth AND a very efficient engine.  The trifecta.  Much harder.

But SaaS and Cloud keep growing.  And with that, over time, do market caps as well.  Things are slowly reflating.  Never again to 2021 levels, but slowly reflating.

The New Age of the Decacorn in SaaS may just be here.

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