Blog - Practical Venture Capital

PVC SaaS Index™ | Q2 2022 – SaaS Multiples Are at a 4-Year Low: Where Do They Go From Here?

Aman Verjee

05.18.22

Downturn
IPO
Public Markets
PVC SaaS Index
SaaS

Practical Summary: Our PVC SaaS Index™ companies trade at just over 8x EV / LTM revenue, lower than at any time since the Q1 2020 market panic that followed the onset of the COVID pandemic. They are trading around where SaaS multiples were in 2017-2018. The median company multiple in our index is down 54%

How Netflix Lost the Squid Game

Aman Verjee

04.22.22

Public Markets

NFLX now appears to have shifted from playing “at home” on technology against cable television and Blockbuster into a war over content and pricing against Disney and HBO, where they are definitely the “visitors.” Don’t expect a turnaround in the stock until they figure out monetization of freeloaders and ad-supported plans … all of which is still a long way off.

PVC SaaS Index™ | Q1 2022 Update

Aman Verjee

03.29.22

Public Markets
PVC SaaS Index
SaaS
Valuation

Our PVC SaaS Index™ companies trade at 11x EV / LTM revenues, well within the historical range of 7-12x where SaaS has traded for most of the past 10 years.The median SaaS multiple has compressed by nearly 40% from where it peaked in late 2021, at 18x.

Why is Instacart Repricing its Shares?

Aman Verjee

03.25.22

Valuation

Instacart recently repriced its shares to reduce its valuation by 40%. This move makes great sense for the company, given where all of its public market comparables have traded since the company’s last financing in early 2021. This voluntary re-pricing is a great recruiting tool for the company.

FB: The Big Tech Stock Ben Graham Would Pick

Aman Verjee

02.17.22

Public Markets
Valuation

FB is now trading with a 6.3% “free cash flow yield” (i.e., free cash flows from the business on a per share basis versus its market price per share). That’s four times Treasury yields and twice the rest of the NASDAQ 100.

Investing in 2022 and Beyond

Aman Verjee

12.20.21

Allocation
Public Markets
Venture Capital

Public equities in the US have performed very well over most of the past 40 years, but that favorable backdrop is unlikely to continue. Venture is a long-term bet on innovation, software, and small cap stocks, whereas large public indexes depend largely on financial services, energy, health care, and retail, as well as technology. Investors should look to alpha-producing venture capital to diversify risk across future market cycles.