Vertical SaaS, Today — 2nd Edition

Anna Khan
3 min readDec 1, 2022

We’re back with our 2nd edition of Vertical SaaS, Today — our monthly round up of how vSaaS is performing in the public markets.

As a reminder, our first edition was published a month ago here. Today we will review how the markets performed as of November 2022.

Key Metrics (As of 11/30/2022)

  • Total Number of Companies: 21 — No change from October ’22.
  • Total Market Cap: Up 4% to $229.26B.
  • Largest Market Cap: Shopify displaces Autodesk for the top spot at $52B. Last month, Autodesk held the top spot at $46.3B.
  • Lowest Market Cap: We have a new low with Blend at $313.8M, displacing 2U which had a market cap of $479.6M last month. They have meaningfully recovered up to $628M.
  • Average Market Cap: $10.9B, up 3.7%.
  • Average LTM Total Revenue: $1.47B, in line with last month’s numbers.
  • Highest LTM Total Revenue: Constellation Software still claims the top spot, this time with more revenue at $6.2B (8.4% increase MoM). Shopify is close behind at $5.25B.
  • Average LTM Gross Margin: 56.2% — up1.4%.
  • Highest EV/LTM Revenue Multiple: Aspen Technology still takes the top spot at 20.8x. Clearwater Analytics takes the second spot at 11.7x — a big spread between #1 and #2.
  • Lowest EV/LTM Revenue Multiple: Blend Labs at 0.7x. This is a further fall from last month where it was tied with 2U at 1.3x.
  • Average EV/LTM Revenue Multiple: Significant improvement from 7.5x to 8.3x (+10%).
  • Median EV/LTM Revenue Multiple: Another improvement from 5.9x to 6.4x (+8%).

General Stability: Despite market volatility, you can see that vertical SaaS public benchmarks have generally stayed in line month over month (October to November). EV/LTM revenue multiples seem to be improving significantly, with gross margin, and average market cap also up.

Low Correlation between Multiples and Growth: In the last few years, high revenue growth stocks demanded stronger multiples on their LTM Total Revenue but that correlation seems to be slowing. As an example, even though Toast’s LTM Total Revenue 1 yr Growth % was 72.4%, it trades at 3.5x. This is exacerbated by the fact that they have the lowest LTM Gross Margin% on the list at 17.4%. The highest EV/LTM rev multiples, after Aspen Technology at 46.3x, have average growth rates but still demand high multiples in comparison to other vertical SaaS players (e.g. Shopify at 24.59% LTM Total Revenue 1 yr Growth % to garner 9.2x EV/LTM Revenue Multiple, and Autodesk at 16.24% LTM Total Revenue 1 yr Growth % to garner 9.1x EV/LTM Revenue Multiple.)

No Direct Correlation between EV/LTM Revenue Multiple and Type of Industry Company Serves: One hypothesis I had initially was a potential variance between types of customer served and EV/LTM Revenue Multiples — but there is no direct correlation in the data yet. As an example, you see Lightspeed Commerce demanding only a 2.4x EV/LTM Revenue Multiple while Shopify demanding a 9.2x EV/LTM Revenue Multiple (overlapping customers). Similarly, Black Knight, nCino, and Blend Labs serve the financial industry but have varying EV/LTM Revenue Multiples (7.9x, 8.4x, and 0.7x respectively.)

Follow us at @vSaaSToday for more info.



Anna Khan

GP @CRV, Alum @HarvardHBS @Stanford. I like a bagel with attitude.