15.4.2025
SaaS valuation insights report highlights
Customer & Sales and Operations & Enterprise Management SaaS vendors continue to command premium valuation multiples, underpinned by superior Rule of 40 performance: Valuation dispersion across SaaS categories remains noticeable, with players such as Lime Technologies (Customer & Sales Management) and Admicom (Enterprise Management) trading at a notable premium to peers in segments like Marketing & eCommerce. This divergence reflects both the resilience and growth efficiency of mission-critical platforms, as well as investor bias toward categories with lower cyclicality and higher strategic relevance, especially amid sustained macroeconomic uncertainty.
Valuation dispersion within the SaaS sector remains profound, with the spread between top- and bottom-tier performers reaching new highs: As of Q1/’25, the top quartile recorded a median Rule of 40 of 52%, while the bottom quartile lagged at just 12%, corresponding to EV/Sales (2025E) multiples of 5.1x and 1.7x, respectively. Amid decelerating revenue growth and EBITDA margins stabilizing at a new baseline, profitability has become the dominant driver of Rule of 40 performance. For companies exhibiting only modest growth, profitability is now the key lever for preserving valuation, while those lacking in both growth and earnings scalability are being assigned structurally lower multiples.
As of Q1/’25, vertical SaaS companies were trading at a 77% premium to their horizontal counterparts, up from 70% in Q4/ ’24, despite comparable Rule of 40 performance across both segments: Median EV/LTM Sales multiples stood at 4.9x for vertical SaaS firms vs. 2.8x for horizontal players. The widening valuation gap underscores investor preference for sector-specific solutions, which are often viewed as more defensible, less commoditized, and better positioned for sustained growth and margin expansion.
Net revenue retention (NRR) remains a critical valuation driver, with companies exceeding 110% NRR trading at a 4.8x EV/Sales multiple, representing a 60% premium to the TSI median of 3.0x: Despite a broader decline in median NRR to 102% in Q4/’24 (down from 115% in Q1/’22), investors continue to assign premium valuations to SaaS companies demonstrating strong retention and expansion dynamics. High NRR is viewed as a proxy for product stickiness, customer satisfaction, and embedded upsell potential attributes that signal lower revenue volatility and better growth efficiency.
The Nordic SaaS M&A market saw a subdued start to 2025, with transaction volumes remaining soft, though valuation multiples posted a modest quarter-over-quarter uptick: A total of 62 transactions were completed in Q1/’25, with a median EV/Sales multiple of 4.5x—consistent with the historically slower pace of early-year dealmaking. Looking ahead, we maintain a positive outlook for the remainder of the year, supported by mounting exit pressure among financial sponsors and an expanding backlog of deferred transactions, provided macroeconomic conditions remain broadly stable.
Vertical SaaS continues to command a valuation premium in private market transactions, consistently outperforming horizontal peers over the 2020–2024 period: While the valuation delta narrowed in 2024, this appears to be driven largely by company and deal-specific factors, such as deal size, buyer type, and performance characteristics, rather than a structural shift in market dynamics. On balance, recent evidence suggests the valuation gap between vertical and horizontal SaaS has continued to widen, reflecting sustained investor preference for niche-focused, defensible solutions with superior retention and margin profiles.
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In our quarterly SaaS valuation insights report, we strive to provide an overview of the latest developments and trends related to valuations accompanied with our proprietary insights and learnings from live projects and observations from engaging with both clients, strategic buyers, and investors in our cross-border advisory practice.
The full SaaS valuation insights report can be downloaded by clicking the link below, and the report will also be published on our website on a quarterly basis.
Tero Nummenpää, Partner
Ruben Moring, Partner
Juuso Marttinen, Partner