Sources
Loading...
Additional media
Loading...
DeepNewz, mobile.
People-sourced. AI-powered. Unbiased News.
The bar for initial public offerings (IPOs) in the enterprise software sector has risen significantly, leading investors to turn their attention to private equity. In 2023, the sentiment for Enterprise SaaS, traditionally favored by venture capitalists for its high exit success rates, declined, resulting in the lowest deal volume since 2017. Companies now need to generate at least $500 million in annual recurring revenue (ARR), raise $500 million, and achieve an implied valuation of $5 billion to be considered for an IPO. Additionally, firms are expected to grow revenue by at least 20%, aim to break even on free cash flow, and achieve 3x year-over-year growth. These stringent criteria have left few companies eligible for IPOs, raising concerns about the future of the exit market.
“Firms need to be generating at least $500M in ARR... growing revenue by at least 20% and aim to break even on free cash flow… there’s not a lot of companies that meet those criteria.” — @SapphireVC’s @jai_das w @akashpasricha at @CollisionHQ https://t.co/zeTXdeZodv
“Firms need to be generating at least $500M in ARR... growing revenue by at least 20% and aim to break even on free cash flow… there’s not a lot of companies that meet those criteria, which means there’s not a lot of IPO-able companies.” — @SapphireVC’s @jai_das w @akashpasricha…
“Firms need to be generating at least $500M in ARR... growing revenue by at least 20% and aim to break even on free cash flow… There’s not a lot of companies that meet those criteria.” — @SapphireVC’s @jai_das w @akashpasricha at @CollisionHQ https://t.co/zeTXdeZodv
