Welcome to our third biannual Acquire Multiples Report.
Below, you’ll learn the multiples at which most startups got Acquire’d between August 2022 and February 2023, split by revenue and category.
(Not read our previous reports? Download them now.)
Combining hundreds of data points, we hope this report helps you determine a realistic baseline for your asking price. But before you delve into the data, please read the following disclaimer.
A Disclaimer on the Data
This report uses anonymized, customer-generated data. We don’t participate in acquisition transactions, so the actual multiple ranges could be higher or lower than those reported.
We’re working to improve the quality of our data going forwards, but the multiples will give you a sense of what is listed and selling on our marketplace.
Finally, this report and its data are not intended to provide legal, financial, or any other professional advice. We compiled this data and this report for informational purposes only to help you decide on how to most effectively use our platform. We recommend you seek the services of an M&A professional before entering into any M&A transaction. It is not Acquire.com’s intention to solicit or interfere with any established relationship you may have with any M&A professional, and nothing in this report does or intends to form any professional relationship or engagement with Acquire.com.
Please consider all types of information and data when using our platform. We do not and do not purport to make any representation, warranty, or guarantee regarding the accuracy and completeness of any of the information in this report.
Quick Valuation Guide
You’re probably here for the headline multiples, so here’s what we’d recommend based on the data submitted by founders who sold businesses on Acquire.com in the last six months.
- SaaS: 2-3x revenue or 5x profit
- Ecommerce: 1-2x revenue or 3x profit
- Marketplace: 1-3x revenue
- Agency: 1x revenue or 1-3x profit
You might’ve spotted a contraction in asking price multiples. Generally, asking prices of sold startups have fallen in the last six months, and we give some context to explain why in the next section.
As always, if your startup is pre revenue or makes less than $5,000 in TTM revenue, we recommend pricing your startup at under $25,000 if you want to attract buyers. You just won’t engage any buyer interest when asking for more than that, unfortunately.
When using these multiples to establish a baseline for your startup, please adjust the multiple to the unique characteristics of your business.
Everything from your financials to your tech stack influences your valuation and ignoring these details could mean leaving money on the table or struggling to attract buyer interest.
Market Insights
As the first quarter of 2023 draws to a close, there’s some good and not-so-good news.
Let’s start with the not-so-good news. Investors are still a little price-sensitive. The war in Ukraine rages on, inflation and interest rates are rising, and supply shocks remain. With so much global uncertainty, few can afford to give the benefit of the doubt. Everyone wants a safer bet, which for financial buyers, is a lean and efficient business that’s growing sustainably.
That said, and this is the good news, startups are still getting Acquire’d.
While global deal value dropped by about a third in H2 2022, deal volume only declined by around 13 percent. Private equity, for example, has more undeployed capital or “dry powder” than it has had in the last twenty years, around $3.5 trillion. The challenge, it seems, is in choosing when and where to invest it.
We’ve seen a similar contraction in asking price multiples, but deal volume remains high. Profitable, growing businesses are still our top sellers. Check out our valuation guides if you need help calculating your asking price or want to justify a higher valuation to buyers.
Is Now a Good Time to Sell Your Business?
The best time to sell your business is when it’s doing well. That’s when you can justify the highest valuation. If you wait for changes in the economic climate, you expose your business to factors beyond your control. Will the market give you today’s valuation tomorrow? Maybe – but it’s a risky bet. Instead, evaluate your business today and your life goals. Is there a new venture you want to try? Are you ready to retire? Are you burned out or needing a break?
I’ll leave you these wise words from former tennis champion, Arthur Ashe: “Start where you are. Use what you have. Do what you can.”
Highlights From the Report
Average Pre-revenue Acquisition Price
Average SaaS Profit Multiple
Average SaaS Revenue Multiple
Average Shopify SaaS Revenue Multiple
Average Ecommerce Revenue Multiple
Average Ecommerce Profit Multiple
Average Marketplace Revenue Multiple
Average Agency Revenue / Profit Multiple
What’s Next for Acquisitions in H1 2023?
On average, valuations fell in the second half of 2022, and they may continue to fall into 2023. Does that mean it’s a bad time to sell? No. Buyer appetite for sustainably growing businesses remains strong and we can’t see that changing any time soon.
Generally, if you want the very best valuation for your business, the usual tips still work:
- Find paying customers.
- Increase profitability.
- Cut bloat and inefficiency.
- Automate everything.
- Pursue recurring revenue.
Check out our blog for the full list of 14 ways to increase your valuation.
The content on this site is not intended to provide legal, financial or M&A advice. It is for information purposes only, and any links provided are for your convenience. Please seek the services of an M&A professional before entering into any M&A transaction. It is not Acquire’s intention to solicit or interfere with any established relationship you may have with any M&A professional.
