Are you an emerging / established Enterprise Software company planning to go public in the US?
Here is what you need to know if you want to be in the coveted $1Bn+ market cap club. [Data backed]
There have been 45 companies Enterprise Software companies since 2016 that went public in the US.
Both products & services businesses can be valuable.
49% were services styled while 40% were product/ developer based.
Customers are increasingly moving to cloud-first.
58% of companies were cloud-first in their DNA. Their average LTM revenue multiple was ~12x!
Application software & infrastructure were the most valuable vis-à-vis LTM revenue.
Average annual revenue was $180-250M at the time of application for listing.
Median capital raised was ~$250M.
Median post IPO valuation was ~$2Bn.
Median revenue multiples peaked in 2020.
On LTM revenue, they hit valuations of ~22x of LTM revenue.
I think over time, the most important thing is how capital efficient the business model is because providing sustainable returns to investors is equally important - every quarter, every year!
And, this is really where the best excel - in the lovely balance between short-term battles and long-term wars.