Qubit: SVB SaaS Report H2 2022
It's remarkable that the number of deals and capital invested have dropped significantly this year but both round size and valuation have either gone up a bit or remain flat.
This is while many SaaS companies continue to plunge in the public markets.
“Last year proved to be an outsized year both in terms of deals and dollars — a high-water mark unlikely to be met in successive years. Nearly three-quarters through 2022, both metrics are lower than the same time last year. Extrapolated data puts deals and dollars on pace to fall 18% and 27% in 2022, respectively.
Investors have slowed down as they continue to assess the impact from sky-high inflation, rising interest rates, depressed public markets and weaker economic data. Despite this, deal pace is continuing at a healthy clip with some of the most notable investors still averaging 20 to 30 global VC deals per month. Meanwhile, US SaaS investment dollars have already surpassed pre-pandemic full-year totals, though the allocation of this capital has shifted with firms looking downstream. For example, the share of US SaaS capital invested from Series C+ deals has fallen from 51% in 2021 to 41% in 2022.
Deal sizes and valuation step-ups have also started to plateau — especially at the late stage — as investors become more stringent and the balance of power has shifted in their favor. The best companies will still be able to raise ample capital at a comfortable valuation. However, less-proven companies will have a tougher time.”
Source:
State of Software-as-a-Service - H2 2022 SaaS Report
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