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 2,202 transactions with disclosed valuation multiples, including EV/Revenue and EV/EBITDA. Within this subset, 952 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 the first half of 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 eight years, software companies have consistently been valued at robust valuation multiples, reflecting strong investor appetite for scalable, high-margin business models.
Across 2,202 transactions with disclosed EV/Revenue multiples, the median revenue stood at 3.0x, with the top quartile reaching 6.4x and the bottom quartile at 1.5x. This highlights how key factors such as growth rate, customer base quality, and recurring revenue influence outcomes.
952 transactions reported EV/EBITDA multiples for profitability-focused metrics, showing a median of 15.3x EBITDA. More profitable or strategically positioned companies reached 25x EBITDA or higher, while slower-growth or concentrated businesses traded below 10x.
Additionally, for companies where EBIT is the preferred measure, 789 transactions revealed a median EV/EBIT multiple of 18.7x, with top performers exceeding 33x.
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 2,202 transactions, the median EV/Revenue multiple over the past eight years was 3.0x. Between 2015 and 2020, valuations were relatively stable, mostly in the 2.7x – 3.5x range. A sharp spike occurred in 2021, when the median multiple reached 6.0x, supported by abundant capital and a focus on high-growth SaaS companies.
Since early 2022, valuations have adjusted downward as interest rates rose and investors shifted attention toward profitability. By H2 2024, the median multiple hit a low of 1.5x, before recovering slightly to 2.5x in H1 2025.
There is still significant dispersion in the market:
- Bottom quartile companies: ~1.5x revenue
- Top quartile companies: >6.4x 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×. In H1 2025, it rose to 17.6×, up from a low of 12.0× in early 2023. The top quartile trades above 25× EBITDA, showing how growth potential, recurring revenue, and diversified customers drive higher valuations.
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
From 2015 to 2020, private software company valuations were relatively stable. EV/EBITDA multiples stayed around 14–16x, and EV/Revenue multiples were close to 3x.
In 2021, the market shifted sharply. The pandemic and widespread remote work accelerated demand for digital solutions. Companies invested heavily in cloud software, collaboration tools, cybersecurity, and automation. This created strong growth opportunities for SaaS businesses. With low interest rates and abundant capital, valuations reached historic highs. The median EV/EBITDA multiple peaked at 21.1x in H1 2021. Investors paid premium prices for high‑growth SaaS and subscription-based companies, betting on lasting changes in how businesses operate and buy software.
This trend reversed in early 2022. Rising interest rates and a shift toward profitability drove valuations down. The median EV/EBITDA multiple dropped to 12.0x by H1 2023, well below the long-term median. Public software stocks fell even more, increasing caution in private markets.
By H1 2025, valuations started to recover. The median EV/EBITDA multiple rose to 17.6x, showing renewed buyer confidence. Investors now focus more on efficient operations and sustainable cash flow, not just revenue growth.
Effect of company size on valuation multiples
Company size often influences valuation, but the relationship is not always straightforward. In our dataset of 2,202 transactions, smaller deals under $5 million showed a 4.0x EV/Revenue median, which is higher than many mid-sized deals, but only 12.7x EV/EBITDA. Larger deals of $100–500 million achieved 3.8x EV/Revenue but a stronger 17.5x EV/EBITDA.
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.
However, there are exceptions. Some small or early-stage software companies achieve very high revenue multiples despite limited or even no profit. These are often innovative businesses with unique technology, strong market potential, or strategic value to a buyer. In such cases, investors are willing to pay for growth opportunities rather than current earnings.
Our data reflects this dynamic: smaller deals sometimes show high revenue multiples because of growth expectations, while larger companies consistently receive higher EBITDA multiples due to scale and lower risk. This shows that innovation can command a premium, but size and stability still play a key role in valuation.
Effect of geography on valuation multiples
The geographical location of a software company plays an important role in determining valuation levels. Differences in market size, scalability, and investor familiarity can significantly influence how companies are priced.
United States leads in both revenue and earnings multiples
US-based software companies are valued the highest in our dataset, with median multiples of 4.3x EV/Revenue and 20.2x 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 $240 million, well above the overall dataset median of $55 million, which typically results in higher multiples.
Other markets show varying patterns
- China: 4.6x EV/Revenue and 21.3x EV/EBITDA, driven by a fast-growing tech ecosystem and strong domestic demand
- United Kingdom: 3.1x EV/Revenue and 15.3x EV/EBITDA, supported by fintech and enterprise software activity.
- Nordic countries (e.g., Norway): 4.4x EV/Revenue and 18.1x EV/EBITDA, showing global competitiveness despite smaller deal sizes.
- France and Germany: 2.4x and 2.0x EV/Revenue, reflecting localized models and limited international scale.
- India: 4.5x EV/Revenue but only 8.8x EV/EBITDA, indicating early-stage, high-growth companies with limited near-term profitability
Outlook for Q4 2025 and 2026
Software company valuations are expected to stay stable through Q4 2025. As buyers focus on profitability and efficient growth, EV/EBITDA multiples will likely remain near the long-term median. The rebound in H1 2025 shows improving investor confidence, but pricing discipline is likely to continue.
In 2026, valuations may see moderate growth if interest rates stabilize and public markets strengthen. Several trends could push multiples higher:
- AI and automation: AI-driven tools and workflow automation continue to attract premium pricing.
- Cybersecurity and compliance: Security and regulatory software remain top priorities for buyers.
- Vertical SaaS: Niche, industry-focused platforms often command higher revenue multiples.
Valuations are unlikely to return to the 2021 peak, but late 2025 and 2026 point to stable pricing with select premiums for high-quality, growth-oriented companies.
Long-term software M&A outlook
Software valuations are expected to normalize over time. SaaS growth rates have slowed compared to the pandemic period. Investors now focus more on profitability and reliable cash flow rather than pure top-line growth.
At the same time, AI-driven solutions are reshaping the market. Companies that integrate AI into their products or operations can achieve higher valuations. This shift means premiums will go to AI-enabled and profitable businesses instead of those relying only on fast revenue growth.
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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