PE SaaS Revenue Multiple Calculator

Calculate a private-equity SaaS valuation multiple based on ARR, growth, net revenue retention (NRR), gross margin, Rule of 40, and EBITDA. Reflects 2024-2026 PE comps: median 6.4x ARR for growth SaaS, 4.8x for slow-growth, 10x+ for top-quartile efficient growers (Bessemer / SaaStr / Carta).

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Modern PE SaaS Valuation Logic

Pre-2022: public SaaS traded at 14-18x ARR; PE paid 8-12x. Post-2022 rate-rise: medians compressed to 6-8x ARR for healthy growth, 4-6x for slow growth. PE buyers now demand Rule of 40 > 40 AND NRR > 110% for premium multiples. Below 40 Rule + below 100% NRR: 3-5x ARR. Above 60 Rule + 130% NRR: 12-18x ARR. Pure SaaS-metric arithmetic before EBITDA quality adjustment.

Why Net Revenue Retention Dominates

NRR = (starting MRR + expansion − churn − contraction) / starting MRR. >120% NRR signals product-driven growth — customers stay, expand, upgrade. PE pays a premium for compounding revenue. NRR<100%: leaky bucket, multiple compresses 30-50%. Public-comp medians: top quartile SaaS 119% NRR (Carta 2024), median 106%. Sub-100% NRR PE prices at 3-4x ARR floor.

Rule of 40 as a Quality Screen

Rule of 40 = ARR Growth % + EBITDA Margin %. Original SaaSt rule from Brad Feld: profitable companies with growth + margin summing to 40+ deserve premium multiples. 60+ = top quartile (15x+ ARR). 40-60 = healthy (8-12x). 20-40 = struggling (4-6x). <20 = restructuring (2-4x). Used as a single number to compare SaaS regardless of stage. PE rarely buys below Rule of 30.

EBITDA Multiple Cross-Check

Most PE deals model BOTH revenue multiple AND EBITDA multiple, then pick the higher (favorable to seller). EBITDA multiple range: 12-25x for healthy SaaS, 8-12x for slow growth, 4-8x for distressed. Adjusted EBITDA (excluding stock-based comp) is standard in negotiations — PE typically demands 50-70% of SBC as a real expense. Gross margin matters most when EBITDA is low — under 70% gross margin signals product-led-growth pricing flaws.

Sources: Bessemer Cloud Index 2024, Carta SaaS Benchmarks 2024, SaaStr Annual Survey 2024, OpenView SaaS Benchmarks Report. Last updated: May 2026. Not investment advice.