What are SaaS comps and how do you use them for valuation?

SaaS comps (comparables) are a set of publicly traded SaaS companies with similar growth rates, gross margins, NRR, and business model used as a benchmark for valuing a private SaaS company. You identify the median EV/NTM Revenue multiple of your comp set, then apply a 20–30% private-market discount to arrive at a target valuation range for the company you are pricing.

What is the current median SaaS EV/Revenue multiple in 2026?

As of May 2026, the median EV/NTM (next-twelve-months) Revenue multiple for public SaaS companies is approximately 6.8x, per BVP Nasdaq Emerging Cloud Index data and Jamin Ball's Clouded Judgement tracker. This compares to a peak of 15–20x in November 2021. Growth-adjusted multiples vary significantly: companies growing >30% YoY trade at 9–13x while sub-10% growers trade at 3–5x.

How do you find public SaaS comparables for a private company?

The best free sources for SaaS comps are Jamin Ball's Clouded Judgement Substack (weekly public SaaS multiple tracker), the BVP Nasdaq Emerging Cloud Index, and SEC filings for direct peer analysis. Start by filtering by gross margin (>70%), ARR range, and primary go-to-market motion (PLG vs. enterprise), then narrow to companies with similar growth rates and vertical focus.

What discount should you apply to public SaaS comps for private companies?

The standard private-market discount to public SaaS comps is 20–30% for late-stage companies with >$10M ARR, widening to 30–40% for earlier-stage companies with <$5M ARR. The discount reflects lower liquidity, smaller scale, higher key-person risk, and the absence of a public float. In a risk-off environment like 2023–2026, the discount has been closer to the high end of this range.

What is the Rule of 40 and how does it affect SaaS valuation multiples?

The Rule of 40 is a SaaS health metric where revenue growth rate plus profit margin (typically EBITDA margin or free cash flow margin) should equal or exceed 40%. In public markets as of May 2026, SaaS companies with a Rule of 40 score above 40% trade at a median of 11.7x EV/NTM Revenue — nearly 3x the 3.9x median for companies with Rule of 40 scores below 20%. For private company valuation using SaaS comps, crossing the Rule of 40 threshold is the single most impactful benchmark for commanding a premium multiple: it signals that the company can grow profitably rather than burning capital indefinitely to sustain growth.

SaaS Comps 2026: 6.8x Median EV/Revenue Guide

Q: What is the Rule of 40 and how does it affect SaaS valuation multiples?

The Rule of 40 is a SaaS health metric where revenue growth rate plus profit margin (typically EBITDA margin or free cash flow margin) should equal or exceed 40%. In public markets as of May 2026, SaaS companies with a Rule of 40 score above 40% trade at a median of 11.7x EV/NTM Revenue — nearly 3x the 3.9x median for companies with Rule of 40 scores below 20%. For private company valuation using SaaS comps, crossing the Rule of 40 threshold is the single most impactful benchmark for commanding a premium multiple: it signals that the company can grow profitably rather than burning capital indefinitely to sustain growth.

The median public SaaS company trades at 6.8x NTM Revenue in May 2026. In November 2021, that number was 15–20x. The correction is real, it is documented, and if you are valuing a SaaS company without the right comparables set, you are guessing.

SaaS comps are not optional. They are the foundation of any credible SaaS valuation — whether you are raising a round, making an investment, or running an M&A process. Getting the comps right means knowing which public companies to include, which metrics to weight, and how to translate a public multiple into a private company price.

What Are SaaS Comps and Why Do They Matter?

SaaS comparables are a curated set of public SaaS companies that share key characteristics — growth rate, gross margin, ARR scale, go-to-market motion, and vertical focus — with the company you are trying to value. The premise is simple: the market has already priced these companies. You use that market pricing to benchmark the private company.

The most commonly used SaaS multiple is EV/NTM Revenue (enterprise value divided by next-twelve-months revenue). NTM is preferred over LTM (last-twelve-months) because it is forward-looking and better reflects growth expectations. Investors pay for the future, not the past.

EV/NTM Revenue

Most widely used SaaS multiple — forward-looking, growth-adjusted

EV/ARR

Used for pre-revenue or early-stage companies where GAAP revenue lags ARR

EV/NTM Gross Profit

Better for comparing companies with very different gross margin profiles

EV/EBITDA

Relevant for profitable or near-profitable SaaS companies with >$50M ARR

Current Public SaaS Comps: The Data (May 2026)

Here is where public SaaS multiples actually sit in May 2026, segmented by the metrics that drive the most multiple differentiation. Track live data on the SaaS Valuations Dashboard.

Segment	Median EV/NTM Rev	Top Quartile	Bottom Quartile
All public SaaS	6.8x	12.4x	3.1x
Revenue growth >40% YoY	13.2x	18.5x	9.0x
Revenue growth 20–40% YoY	8.9x	12.1x	5.8x
Revenue growth 10–20% YoY	5.4x	8.2x	3.3x
Revenue growth <10% YoY	3.8x	5.6x	2.0x
Rule of 40 > 40%	11.7x	17.2x	8.3x
Rule of 40 20–40%	7.1x	10.4x	4.9x
Rule of 40 < 20%	3.9x	5.8x	1.8x

Source: BVP Nasdaq Emerging Cloud Index, Jamin Ball Clouded Judgement, public filings. Data as of May 2026.

How to Build the Right SaaS Comps Set

The most common mistake founders and investors make with SaaS comps is picking companies that look similar on the surface but have fundamentally different economics. Here is the screen I use:

1. Match gross margins first

SaaS gross margins vary from 55% (infrastructure-heavy) to 85% (pure software). A 70% gross margin company should not be compared against a 55% gross margin company — the underlying unit economics are incomparable. Only include comps with gross margins within ±10 percentage points.

2. Match revenue growth bands

The biggest driver of EV/Revenue multiples is growth rate. Group comps into bands: <10%, 10–20%, 20–40%, >40%. Mixing a 15% grower with a 45% grower in the same comps set produces a meaningless average. Stick within a ±15 percentage point range.

3. Match go-to-market motion

PLG (product-led growth) companies, enterprise sales-led companies, and SMB-focused companies command fundamentally different multiples because their churn, CAC, and expansion revenue dynamics differ. Segment your comps by primary GTM motion.

4. Match ARR scale

A $5M ARR company should not use a $500M ARR company as a comp. Scale affects predictability, churn rates, and growth potential. For private company valuation, use comps that were at a similar scale at a similar stage — look at historical filings if needed.

5. Apply a private-market discount

Private companies are illiquid, typically smaller, and carry higher key-person and concentration risk. The standard private discount to public SaaS comps is 20–30% for Series B+ companies and 30–40% for Seed/Series A. In the current risk-off environment (2024–2026), apply the higher end of these ranges.

Where to Find Public SaaS Comparables

These are the sources I actually use. All are either free or low-cost:

Jamin Ball – Clouded Judgement

Best weekly tracker of public SaaS multiples, segmented by growth, profitability, and ARR. Free Substack with premium tier.

cloudedjudgement.substack.com

BVP Nasdaq Emerging Cloud Index

Bessemer's public cloud index tracks 70+ public SaaS companies with full financial data and historical multiples.

index.bvp.com

SEC EDGAR Filings

10-K and 10-Q filings give you exact ARR, NRR, gross margin, and CAC data for any public SaaS company — straight from the source.

sec.gov/edgar

Value Add VC SaaS Dashboard

Live EV/Revenue and EV/EBITDA multiples for public SaaS companies, updated weekly with Rule of 40 and NRR filters.

/saas-valuations

Applying SaaS Comps to a Real Valuation

Here is how to translate a public comps set into a private company price. Assume you are valuing a Series B SaaS company with $8M ARR, growing 35% YoY, 74% gross margin, 115% NRR, and no meaningful profitability (Rule of 40 score of ~35%).

Step 1: Identify public compsPull all public SaaS companies with 25–45% YoY growth, 70–80% gross margins, and Rule of 40 of 25–45%.

Step 2: Calculate median comp multipleMedian EV/NTM Revenue for this segment: ~8.9x (from the table above).

Step 3: Apply private discountSeries B with $8M ARR → apply 25% private discount: 8.9x × 0.75 = 6.7x NTM Revenue.

Step 4: Calculate NTM Revenue$8M ARR × 1.35 growth rate = $10.8M NTM Revenue.

Step 5: Derive valuation$10.8M × 6.7x = ~$72M enterprise value. Add cash, subtract debt for equity value.

Sanity check with ARR~$72M EV ÷ $8M ARR = ~9x ARR — reasonable for a 35% growth, Rule of 40 ~35% company in 2026.

SaaS comps are only as good as the selection criteria you use.

Growth rate, gross margin, and Rule of 40 — not industry category — should determine which companies end up in your comp set.

Track live public SaaS multiples and build your own comps set on the SaaS Valuations Dashboard. For broader market context, see the Benchmarking tool at Value Add VC. Originally published in the Trace Cohen newsletter.