"Our monthly revenue was around $70K at the time, making $11.8M a 14x multiple on our annual revenue. Even in SaaS, that’s on the very high end of the norm, and a multiple generally reserved for highly profitable companies (or ones with massive user bases)."
Congratulations to the company for the growth after only a handful of months. Very impressive.
Using multiples always seems a bit odd for me in super high growth early stage companies. If a product really takes off the early small numbers can really skew things in comparison to later big ones. It's like seeing a 10,000 percent growth rate in the first month on a tiny base.
Multiples are a convenient way of benchmarking deal performance, and it tends to work out very well for typical deals. Successful series B startup with a consistent growth rate? ~10x trailing 12 months revenue. High-growth series A startup? ~15x. Mature post-series C startup with large customer and revenue base? ~8x.
Obviously, the excitement in the market, the competitive landscape, bidding wars, etc. can all screw with those points, but time and time again you see those general ranges for acquisitions.
Good points. Keep in mind the OP is talking about a 14x multiple of annual run rate, rather than trailing 12. He's calculating annual run rate as 12x his most recent month. Considering it's a quickly growing company, if he were calculating his multiple as a multiple of trailing 12, it would be higher than 14.
Congratulations to the company for the growth after only a handful of months. Very impressive.
Using multiples always seems a bit odd for me in super high growth early stage companies. If a product really takes off the early small numbers can really skew things in comparison to later big ones. It's like seeing a 10,000 percent growth rate in the first month on a tiny base.