Acquire Biannual Acquisition Multiples Report (Aug 2022)

Welcome to the second Acquire Multiples Report for 2022.

In this report, you’ll learn the multiples at which most startups got Acquired on Acquire between February and August 2022, split by revenue and category. 

(Not read our first report? Download it 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’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.  

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

As you’re probably here for the headline multiples, here’s what we’d recommend based on the data submitted by founders who sold businesses on Acquire in the last six months.

  • SaaS: 2-5x revenue or 4-7x profit
  • Ecommerce: 1-2x revenue or 3-5x profit
  • Marketplace: 1-3x revenue
  • Agency: 1x revenue or 2-3x profit

(If your startup is prerevenue 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 can use these multiples to establish a baseline for your startup, but please adjust the multiple to the unique characteristics of your business. Everything from your financials to your tech stack influences your valuation and ignoring such details will make it harder to find a buyer. 

Market Insights

In the last six months, probably the biggest trend is more startups selling at lower multiples. Founders might be learning to set more realistic valuations or it could signify declining liquidity or tougher market conditions. In any case, it’s resulted in higher acquisition volume.

Multiples across all categories have emphasized that realism beats optimism. On average, more companies sell, and faster, at multiples up to 4x, with most SaaS sold at between 2x and 4x revenue, Ecommerce and Marketplace between 1x and 2x, and Agencies at 1x revenue.

While exceptional businesses can and do command a higher multiple, buyers usually price smaller startups (with less than $50,000 TTM revenue) on the value of the domain and software powering the business. Multiples don’t apply at these levels, so ignore spikes at the extreme end. 

Macroeconomic factors such as inflation, supply chain problems, energy prices, and the war in Ukraine have loomed large over investor expectations. Nevertheless, buyer appetites have proven resilient, and where founders set realistic prices, buyers were eager to close.  

Highlights From the Report

Download the free Acquire Biannual Multiples Report (Aug 2022) now. Or read on for the highlights, a curated report with additional commentary you might find useful. Please remember all data is customer-reported. Consult additional market resources for the full picture. 

Average SaaS Multiple (Revenue)

Small acquisitions explains the spike at the extreme end of the multiple range.

Average SaaS Multiple (Profit)

Demand for SaaS companies remains high.

Ecommerce

Average Ecommerce Multiple (Revenue)

Ecommerce multiples generally hovered around 1x revenue.

Average Ecommerce Multiple (Profit)

Ecommerce remains our second-most popular startup category (after SaaS).

Shopify SaaS

Shopify SaaS is a subcategory of SaaS that caters to a specific market and ecosystem.

Average Shopify SaaS Multiple (Revenue)

Large Shopify SaaS generally sold at multiples of up to 5x. Startups with under $25K TTM revenue are priced on domains, technology, and so on making the multiple less relevant.

Marketplaces

Average Marketplace Multiple (Revenue)

Marketplaces tend to sell for less than 3x revenue, with the largest selling around 1x.

Agencies

Average Agency Multiple (Revenue and Profit)

Across all sizes, most agencies got Acquired at 1-2x revenue.

Pricing MicroStartups

Pricing startups with especially low revenue can be tricky. 

In our experience, founders asking for $25,000 or less for startups with under $5,000 in revenue have the best chance of matching with a buyer and an eventual exit. 

Though we do see some outliers (prerevenue startups selling for $60,000-80,000), founders justified these exits with expensive assets like a popular domain name or defensible code. As a rule, startups with under $5,000 in revenue sell for less than $25,000 in total sale proceeds. 

Prerevenue startups seldom sell for more than $25,000.

What’s Next for the Acquisition Market?

Despite challenging times, buyers are just as keen on acquiring companies as they were six months ago. They might be more selective, but as founders have learned to value their businesses realistically, and within market expectations, buyers have made offers.

A discerning market now suggests less disappointment later. Not just for buyers, who might overpay for a business that never delivers a return, but also for founders, who might delay selling for a dream number that never materializes. In this case, nobody wins. 

But if buyers and founders can agree on a price that de-risks the acquisition for both (the buyer’s investment risk and the founder’s time risk), they’re likelier to achieve their goals. We hope that number is easier to determine after reading this report. 


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.