2022 SaaS trends

News, insights and updates from the team at Bloom Equity Partners

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2022 SaaS Trends

As always, our goal is to share the best insights and quick takes from across the SaaS landscape. Last month, SVB released a “SaaS investment, valuation, VC activity” trends report for 2022.

Here’s what you need to know:

1. Repricing underway for late-stage startups

   • If public markets continue to slide, there will be pressure on late-stage valuations to rebase.

   • To keep up the strong multiples, late-stage privates will need to demonstrate strong fundamental growth.

   • We can expect a return to fundamentals in 2022.

2. SaaS seed-stage companies are still VC targets

   • Given the changing market dynamics, VC’s are beginning to reassess at what stage to deploy capital. Many beginning to put the breaks on large late-stage deals.

   • This has led to a highly competitive seed to series B environment as these companies are fairly isolated from macroeconomic variables impacting late-stage privates.

   • Additionally, early-stage startups are heavily valued on potential value v.s demonstrated value for late-stage companies.

3. Early-stage M&A spike

   • Early-stage M&A spiked in 2021 which can be seen by the chart below. This trend seems to be continuing as acquirers are looking to take advantage of these “more pragmatically” priced opportunities.
     

     

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What We’re Reading and Listening To…

🎥 The Ultimate Guide to Vertical B2B/SaaS Advertising

📚 The Importance of CAC Payback in Today’s Market Environment

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News from the Industry: deals, deals, and more deals 💰

Vista Equity Partners has invested in BetterCloud

Clearlake Capital-backed Cornerstone to acquire Skillsoft's SumTotal

Access Group secures investment from Hg and TA Associates at £9.2bn valuation

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Favorites from the Ecosystem

Investors👇…..

Shomik Ghosh 🇺🇦 @shomikghosh21

Clearest indication of the software buying experience changing across use cases and buyer personas Many more public companies increasingly have a bottoms up, end user adopted motion Powerful chart from @OpenViewVenture 👀

Orlando Bravo @OrlandoBravoTB

The way you operate and manage a software business is the same (whether you are in 2000, 2019 or now). What difficult environments do is make execs more attentive to forecasting and their P&L (which is always a good thing).

Founders👇…..

Michael Marra 📈 @michaelwmarra

Never feel discouraged when people don’t understand your vision. The smartest people and biggest ideas throughout history were oftentimes thought to be stupid at the beginning. Keep going, keep validating, keep iterating, and prove them all wrong 💪🏼

Austin Belcak @austinbelcak

How to validate a product in 5 steps: 1. Find 50+ target prospects 2. Ask them for their 2 biggest questions about a goal / pain point. 3. Use data to create a one sheet for proposed product. 4. Ask them if they'd preorder for a 50% discount. 5. If 10% buy? Start building.

Operators👇….

Andrew Gazdecki @agazdecki

Your goal as CEO of a startup should be to fire yourself from all key roles by hiring people smarter than you.

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About Bloom Equity Partners

Bloom Equity Partners is a lower mid-market software-focused private equity firm, leveraging deep operational and commercial experience to create enduring market value for the benefit of our investors, founders, and their companies.