So the markets are still down and multiples are still low, but growth rates in SaaS and Cloud are slowly creeping back.  AI has driven a number of rapid unicorns, and at SaaStr Europa 2023, Iconiq Growth noted that while they did 0 brand new growth investments in 2022, they’d already done 5 in the first half of 2023.

So unicorns remain rare but we may have bounced off the lows.  If you can raise at a high valuation today though … should you?

Let’s simplify.  If you somehow are able to raise at $1B, then your investors will be looking for at least a 3x return, i.e. that you’ll be worth at least $3B post-IPO.  Really more due to dilution, so probably at least $3.5 Billion.  But let’s simplify.

Take a look at the valuations on this chart:

To exit at $3B+ post-IPO or acquisition, that means you have to do better, and get bigger, than:

– PagerDuty
– SproutSocial
– RingCentral
– Amplitude
– JFrog

It can be done.  The best in SaaS and Cloud are still growing at epic rates.  But be aware of what happens when you raise at valuations > $100m, if you’re lucky enough to be able to.  You really need to build something epic today to justify it.

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