Software valuations move markets and shape every exit decision. In this article, we look at software valuation multiples worldwide and explain why they matter to both founders and investors.
Publicly traded software companies report valuation multiples daily, generating significant attention from analysts and the media. Yet many private-company CEOs still wonder what these public numbers mean for their own business.
Monitoring these multiples is important for two main reasons:
- Understanding market sentiment: Public-market pricing shows where buyers focus today. Investors now prioritize strong cash flow and efficient business models. Pure revenue growth is less important. Trends such as AI integration, vertical SaaS, and usage-based billing also influence valuations.
- Timing an exit: Public multiples often affect private-market deal terms with a short lag. Knowing these shifts helps founders pick the right time to raise capital, attract investors, or pursue a sale.
Most private SaaS companies differ from their public peers. They often make only a few million in revenue, focus on profitability, and operate outside U.S. exchanges. As a result, applying public-company ratios to private firms can be misleading.
To close this gap, we analyzed hundreds of private software transactions from 2015 through the first half of 2025. We examined how deal size, geography, business model, and growth rate affect valuation multiples. Based on data through June 2025, these insights provide a reliable benchmark for planning funding rounds or full-company sales.
Join Aventis Advisors’ Marcin Majewski and Filip Drazdou for a deep dive into today’s market, the latest multiples, and practical exit-timing tactics.
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Private Market Software Multiples: Our Methodology
For this research, we reviewed a proprietary database of more than 45,000 software company transactions completed globally. From this dataset, we identified 1,262 software companies’ transactions with disclosed valuation multiples, including EV/Revenue and EV/EBITDA. Within this subset, 584 transactions reported EV/EBITDA multiples, allowing us to benchmark both growth-oriented and mature software companies.
Valuation multiples are disclosed for only a fraction of private-market deals, so the sample is not fully comprehensive. Even so, thousands of transactions across geographies, company sizes, and business models provide meaningful insight into software valuation multiples and their key drivers.
Our review covered transactions from 2015 through September 2025, focusing on how multiples varied by:
- Deal size: how larger transactions typically command premium valuations
- Geography: how U.S.-based SaaS companies and European peers differ in pricing
- Business model and growth profile: how recurring revenue models and strong cash flow affect EV/Revenue and EV/EBITDA multiples
The dataset included both on‑premise and SaaS companies, reflecting the reality that many traditional software vendors are transitioning toward subscription and cloud-based models. This approach gives a more accurate view of how valuation multiples behave across the full spectrum of software companies.
SaaS valuation multiples vs On-Premise software multiples
In recent years, much attention has been directed towards valuation multiples of SaaS companies. In our analysis, we chose not to differentiate between SaaS and on-premise software vendors for two reasons:
- Blurring business models: Many on‑premise vendors now offer cloud‑enabled or hybrid delivery and adopt subscription‑based revenue models.
- Market expectations: Investors now focus more on efficiency and sustainable cash flow, meaning even SaaS companies must show clear profitability pathways to achieve premium valuations.
Do SaaS Companies Still Command a Premium?
Practically, SaaS companies continue to trade at slightly higher revenue multiples, primarily due to lower technological debt and stronger growth prospects. However, the spread is smaller than it used to be in the high-growth years before 2022.
SaaS valuation multiples: 2015-2025
Software valuation multiples
Over the past ten years, software companies have consistently been valued at robust valuation multiples, reflecting strong investor appetite for scalable, high-margin business models.
Across 1,262 transactions with disclosed EV/Revenue multiples, the median revenue stood at 3.7x, with the top quartile reaching 7.3x and the bottom quartile at 2.0x. This highlights how key factors such as growth rate, customer base quality, and recurring revenue influence outcomes.
584 transactions reported EV/EBITDA multiples for profitability-focused metrics, showing a median of 18.6x EBITDA. More profitable or strategically positioned companies reached 34.4x EBITDA or higher, while slower-growth or concentrated businesses traded around 11x.
These figures show how company performance and risk profile affect valuation. Businesses with strong revenue growth, diversified customers, and predictable earnings typically fall in the upper quartile, while smaller or lower‑growth companies trade closer to the lower quartile.
Median EV/Revenue multiples for software companies
Revenue multiples are widely used when valuing software companies, especially those investing heavily in growth while generating limited or no profit.
From our sample of 1,262 transactions, from 2015 to 2017, software company EV/Revenue multiples were relatively modest, mostly in the 2–3x range, reflecting steady but conservative market conditions.
In 2018–2019, multiples gradually expanded, reaching 4–5x as investor appetite for scalable SaaS businesses increased and cloud adoption accelerated.
A sharp spike occurred in 2021, when the median multiple peaked at 6.8x, fueled by abundant capital, low interest rates, and a strong focus on growth over profitability.
By 2022, sentiment shifted dramatically as interest rates rose and risk appetite declined, driving a steep correction with multiples falling below 3x.
Through 2023 and 2024, EV/Revenue multiples stabilized at these lower levels, with H1 2025 medians at 2.8x, signaling a return to disciplined, profitability-driven dealmaking after the post-pandemic boom.
There is still significant dispersion in the market:
- Bottom quartile companies: ~2.0x revenue
- Top quartile companies: >7.3x revenue
Companies achieving premium valuations tend to share several characteristics:
- Large and growing addressable markets
- High revenue growth with a clear path to profitability
- Strong SaaS metrics, such as net revenue retention, low customer churn, and healthy LTV/CAC ratios
While revenue multiples remain a useful benchmark, they are ultimately a proxy for profitability. Investors still base long-term value on the company’s ability to generate sustainable cash flow.
Median EV/EBITDA multiples for software companies
EBITDA multiples are commonly used to value mature software companies with stable cash flow, slower growth, or niche operations.
From 952 transactions with disclosed EV/EBITDA multiples, the median for the past ten years is 15.3×. From 2015 to 2019, software company EV/EBITDA multiples remained relatively steady, fluctuating mostly between 15x and 20x, indicating a stable and balanced valuation environment.
In 2020, valuations dipped slightly to 14.6x, reflecting uncertainty at the onset of the pandemic.
This was followed by a strong surge in 2021, when the median multiple climbed to 26.1x in H1, driven by abundant capital, ultra-low interest rates, and aggressive growth-focused investment.
The momentum peaked in H2 2022 at 39.9x, marking the highest valuation levels of the decade, before a rapid correction began later that year as rising interest rates and tightening capital markets shifted investor focus toward profitability.
Through 2023 and 2024, EV/EBITDA multiples normalized to the 17–22x range, reflecting a return to more disciplined, fundamentals-driven pricing.
By H2 2025, the median multiple stood at 17.6x, reinforcing this stabilization. Given the small sample size, the apparent uptick to 28.4x in H2 2025 should be viewed cautiously.
Companies with lower multiples often show one or more of these characteristics:
- Slower revenue growth or high customer concentration
- Heavy technology debt or legacy product dependence
- Weak operating margins compared to peers
Changes in Valuation Multiples: 2015–H1 2025
Between 2015 and 2019, software valuation multiples were relatively stable and conservative, with EV/Revenue mostly in the 2–4x range and EV/EBITDA hovering around 15–20x. This period reflected a balanced environment where growth was valued but not aggressively rewarded, as cloud adoption and SaaS business models were still scaling globally.
From 2018 into 2019, there was a gradual upward trend, with EV/Revenue climbing toward 4–5x and EBITDA multiples edging slightly higher as investors grew more confident in recurring revenue models and the scalability of software businesses.
A dramatic surge occurred in 2021, when EV/Revenue peaked at 6.8x and EV/EBITDA at 39.9x, fueled by abundant capital, record-low interest rates, and an investor focus on growth over profitability. This was the height of the post-pandemic tech boom, characterized by intense competition for deals and a willingness to pay premiums for high-growth SaaS companies.
By late 2022, sentiment shifted sharply as interest rates rose, liquidity tightened, and risk appetite faded, leading to a rapid valuation reset. EV/Revenue multiples dropped below 3x, while EV/EBITDA fell back toward 15–18x, reflecting a pivot toward cash flow and sustainable margins.
Throughout 2023 and 2024, the market stabilized at these lower levels, with H1 2025 showing medians of 2.8x EV/Revenue and 17.6x EV/EBITDA. This marked a return to more disciplined, fundamentals-driven dealmaking, with investors rewarding profitability rather than just top-line growth. The late-2025 uptick in EBITDA multiples to 28.4x remains inconclusive given the small sample size, but overall, valuations have settled well below their 2021 highs.
Effect of company size on valuation multiples
Our dataset of 1,262 transactions shows a clear size premium in software M&A, with larger deals consistently commanding higher valuation multiples on both EV/Revenue and EV/EBITDA.
Medians at the smaller end of the market (<$5m) are 2.1x EV/Revenue and 4.8x EV/EBITDA, reflecting higher perceived risk, limited scalability, and dependence on founder-led operations. As deal sizes grow, multiples increase steadily, indicating stronger growth potential, institutionalization, and higher-quality financial profiles.
This trend becomes especially pronounced from $50–100m, where EV/Revenue multiples jump to 3.7x and EV/EBITDA to 7.4x, suggesting these companies have reached a scale that attracts more competition among buyers, particularly private equity firms and strategic acquirers.
The premium continues to expand for large transactions ($100–500m), with EV/Revenue at 5.3x and EV/EBITDA at 9.1x, reflecting higher growth visibility, established market positions, and often recurring revenue models.
At the very top tier ($500m+), multiples peak at 6.7x EV/Revenue and 11.1x EV/EBITDA, driven by intense buyer interest, strong competitive moats, and the ability of these companies to support larger acquisition structures.
Overall, the median across all 1,262 deals stands at 3.7x EV/Revenue and 18.6x EV/EBITDA, but this masks substantial variation by company size, underscoring the importance of scale in driving premium valuations.
Why this happens
Larger companies tend to be valued at higher multiples because they are perceived as less risky. They usually have more diversified customer bases, experienced management teams, and proven business models. This stability makes future cash flows more predictable and explains why EBITDA multiples rise with scale. Bigger companies also attract more competition among investors because many funds and strategic buyers have minimum size thresholds, which can further push valuations higher.
Effect of geography on valuation multiples
Geography plays a significant role in software company valuations, with companies in larger, more mature markets generally achieving higher multiples due to stronger growth prospects, larger addressable markets, and more competitive buyer landscapes.
United States leads in both revenue and earnings multiples
US-based software companies are valued the highest in our dataset, with median multiples of 5.0x EV/Revenue and 24.8x EV/EBITDA. This premium is partly explained by:
- Large domestic market and global scalability: The US offers the largest addressable market and established channels for international expansion.
- Larger transaction sizes: The median deal size for US transactions is $250 million, well above the overall dataset median of $55 million, which typically results in higher multiples.
Other developed markets show varying patterns
Australia and Norway stand out with elevated EV/Revenue multiples of 4.2x and 4.8x, respectively, reflecting robust SaaS ecosystems and strong local buyer demand. The UK (3.3x) and Sweden (3.2x) fall in the mid-range, offering stable markets but with less aggressive pricing compared to the U.S. or the most dynamic growth hubs.
France and Canada show lower valuation levels overall, with EV/Revenue multiples at 2.9x and 2.7x, suggesting more conservative pricing driven by smaller market sizes and less intense buyer competition.
These patterns demonstrate that while several developed markets achieve premium multiples for growth-oriented software businesses, others remain more moderate, shaped by local market maturity, competitive dynamics, and growth expectations.
Outlook for 2026
As buyers focus on Looking ahead to 2026, software company valuations are expected to remain stable with a slight upward bias, driven by a combination of improving market sentiment and continued investor focus on profitability. After the sharp correction of 2022 and the stabilization seen through 2023–2025, buyers have become more disciplined, favoring businesses with substantial recurring revenues, healthy margins, and sustainable growth.
Interest rates are likely to moderate or decline slightly, which could ease financing conditions and encourage more competitive bidding, particularly from private equity firms sitting on record levels of dry powder. However, a return to the extreme multiples of 2021 is unlikely, as investors remain cautious and selective.
Strategic acquirers are expected to remain active, especially in AI-driven software, cybersecurity, and vertical SaaS, while mid-market deals may benefit from consolidation opportunities. Overall, valuations in 2026 are likely to trend modestly higher compared to 2025, but the emphasis will stay on profitable, scalable companies, with growth alone no longer sufficient to command premium pricing.
Long-term software M&A outlook
Over the long term, software M&A is expected to remain a core focus for strategic buyers and private equity investors, supported by the sector’s fundamental strengths. Many software solutions’ recurring revenue models, scalability, and mission-critical nature make the space highly attractive, even through economic cycles.
While the valuation peaks of 2021 are unlikely to return, the long-term trend points to gradual multiple expansion as software continues to penetrate new industries and drive digital transformation globally. Buyers will increasingly favor those with strong profitability and operational efficiency as companies mature, moving away from purely growth-driven dealmaking.
Private equity firms are expected to play an even larger role, leveraging buy-and-build strategies to consolidate fragmented markets and create platforms with significant scale. At the same time, strategic acquirers will pursue software assets to accelerate innovation and expand into adjacent markets, particularly in high-growth areas such as AI, cybersecurity, and vertical SaaS.
While market cycles will bring fluctuations in valuations, the secular demand for software and its critical role in the modern economy will ensure that software M&A remains active and competitive well into the next decade.
Why you need a software M&A advisor
Monitoring software company valuations and transaction activity gives valuable insight into market trends and exit timing. Every company is unique, just like every founder’s journey. That is why expert advice matters, especially from software M&A specialists who know your market.
Software M&A advisors understand market dynamics, valuations, and how to manage all workstreams. While you run your business, they handle the details and push for the best possible deal. Their success is tied to yours, often making a significant impact on the final sale price.
About Aventis Advisors
Aventis Advisors is an M&A advisor focusing on technology and growth companies. We believe the world is better off with fewer, higher-quality M&A deals. These deals should be done at the right moment for companies and their owners. We aim to provide honest, insight-driven advice and lay out all options, including the choice to maintain the status quo.
Get in touch with us to discuss how much your business could be worth and what the process looks like.
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