Aluno: Henning Podehl
Resumo
This dissertation examines the applicability of the rule of 40 (RO40) for Software-as-a-Service (SaaS) companies by distinguishing between horizontal and vertical SaaS firms. Thereby, this study addresses a notable gap in existing literature, which so far has treated both SaaS segments uniformly. The research methodology is based on linear regression to analyze 55 SaaS companies from different geographies during the fiscal years 2021 and 2022. The findings show that the RO40 is more suitable for predicting valuation multiples for horizontal SaaS firms than for vertical ones. Several key factors explain the lower correlation for vertical SaaS companies, predominantly an increased likelihood of these SaaS firms offering fintech solutions, significantly lower total addressable markets, and variations in average contract values. In particular, the offering of fintech services by SaaS firms can dilute the correlation between the RO40 and enterprise value-to-revenue multiples. The underlying reasons lie in the different revenue profiles of fintech solutions, which exhibit lower gross margins compared to software revenues and are not recurring. This observation tends to explain why public capital markets assign lower multiples to SaaS firms with fintech exposure. Given the differences in business models, industry dynamics, and revenue mix, this dissertation emphasizes the need for a differentiated approach when evaluating SaaS firms according to the RO40.
Trabalho final de Mestrado