This page explains how those multiples work and how to read them. We deliberately do not quote current market multiples, because they change with interest rates and buyer appetite, and a number without a dated, named source would mislead you. Any arithmetic below is labelled as hypothetical. One honest note: SoldComparables does not hold a database of SaaS acquisitions. What is live today is domain comps for domain names.
Why SaaS is valued on revenue
Software businesses with subscriptions have revenue that repeats. If customers stay, this year's revenue is a good predictor of next year's, and the cost of serving one more customer is usually low. Buyers value that predictability, and they often expect to change the cost structure after the deal, so current profit can understate what the business will earn in their hands. That is why ARR, rather than profit, is the common base for larger SaaS deals.
Small SaaS businesses run by one founder are often priced like other small online businesses, on seller's discretionary earnings (SDE). The website valuation page covers that method. As revenue grows and the business looks less like one person's job, buyers move toward revenue multiples.
ARR and MRR
ARR is monthly recurring revenue (MRR) times twelve, counting only subscription revenue. One-off setup fees, services and usage spikes are usually excluded or valued separately. When you compare two multiples, make sure both use the same definition and the same point in time.
A hypothetical example, for arithmetic only: a business with 50,000 USD of MRR has 600,000 USD of ARR. At a hypothetical multiple of 4 times ARR, the price would be 2,400,000 USD. At a hypothetical 2 times ARR, it would be 1,200,000 USD. The difference between those two outcomes is what the drivers below decide.
What moves a SaaS multiple
| Driver | Higher multiple | Lower multiple |
|---|---|---|
| Growth | Revenue growing fast and consistently | Flat or shrinking revenue |
| Churn | Few customers cancel | Many customers cancel each month |
| Net revenue retention | Existing customers spend more over time | Existing customers spend less over time |
| Gross margin | High margin after hosting and support costs | Heavy service or infrastructure costs |
| Size | Larger ARR, more customers | Small ARR, few customers |
| Owner dependence | Team and processes run the business | Founder does sales, support and product alone |
| Customer concentration | Revenue spread across many accounts | One or two customers carry the revenue |
| Market and product | Clear niche, defensible product | Crowded market, easy to copy |
Growth
Buyers pay for future revenue. A business that grows quickly will be worth more next year, so a buyer pays more for it today. Consistency matters as much as speed: a steady growth line is easier to underwrite than a jagged one.
Churn and net revenue retention
Churn is the share of customers or revenue lost in a period. Net revenue retention (NRR) measures what happens to revenue from an existing group of customers over time, including upgrades, downgrades and cancellations. NRR above 100 percent means existing customers grow their spend faster than others leave, so revenue grows even without new sales. Buyers watch both closely, because they decide how much of the ARR will still exist in a year.
Gross margin
Gross margin shows how much of each dollar of revenue is left after the direct cost of delivering the product. Software with low hosting and support costs keeps most of its revenue. A product that needs heavy manual work per customer looks more like a service business and is priced closer to one.
Size and owner dependence
Larger businesses usually earn higher multiples because they are less risky and attract more buyers. A business that depends on its founder for sales, support and product decisions carries a key person risk, and buyers discount it.
How to read comparable deals
Comparable acquisitions are the most persuasive evidence in a negotiation, because they show what buyers actually paid. To use them well, collect the same facts for each deal.
- Price and the ARR or revenue at the time of the deal
- The implied multiple, and whether it was based on ARR, total revenue or profit
- Growth, churn and margin, if reported
- The date, because multiples move with the market
- The buyer type: a strategic buyer, a financial buyer or an individual
- The deal structure: cash at close, earn-out, stock or seller financing
Deal structure deserves extra attention. A headline price that includes a large earn-out is not the same as the same price paid in cash at close. Many private deals are reported without full numbers, so treat a single comparable with caution and build a range from several.
Public and private multiples
Public SaaS companies are valued every day by the stock market, so their revenue multiples are easy to observe. Private deals for small and mid-sized SaaS businesses usually happen at lower multiples than public companies of similar growth. The usual reasons are smaller size, less liquidity, more key person risk and less audited data. Public multiples are useful to see the direction of the market, but applying them directly to a small private business tends to overstate its value.
Where the domain name fits
For most SaaS deals the domain is a minor line inside the price. Sometimes it is not. A short, exact match or one-word name can be worth a lot on its own, and in .ai the market has grown fast: our corpus records 4,925 .ai sales, rising from 152 in 2021 to 2,070 in 2025, with names like cloud.ai at 600,000 USD on GoDaddy (2025-07-02) and law.ai at 350,000 USD on Sedo (2025-08-16). If the domain could be worth more than the software, value it separately with comparable sales.
How SoldComparables helps today
We do not value SaaS businesses and do not hold acquisition data. For the domain inside a deal, SoldComparables finds semantically similar sold names, scores each one from 0 to 100 with up to three reasons, and gives a low, likely and high estimate with wholesale and retail figures, a confidence level and a rationale that cites each comp by name, price and date. It is a data-backed estimate, not a certified appraisal.
Check the domain with the domain appraisal tool, or see pricing for reports you can share with the other side.