State of the market

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

Happy Friday Founders and Friends,

This week we wanted to share some insights on the current state of the software market.

Below are some key takeaways from a presentation that a fellow SaaS investor, Logan Bartlett, put together. This gives a good breakdown on the current state of both the SaaS public and private markets.

Let’s start off with some good news:

1. The tailwinds driving the valuations in the private tech markets

• Technological shifts

• Companies staying private for longer than the historical average

• Tech industries persistence during COVID

• Low interest rates

2. Non-traditional investors participation in tech private markets continued to rise in 2021

   

   Source: Redpoint: State of Current Market

3. Valuations paid by acquirers continues to rise

   

Source: Redpoint: State of Current Market

A few insights of what might lie ahead for both the private and public markets:

1. The public markets sell of is a lot different than recent years pull backs

Source: Redpoint: State of Current Market

2. Software multiples seem to mirror interest rates for the most part

Source: Redpoint: State of Current Market

Summary:

• Business fundamentals remain healthy for public software companies

• Private markets have not yet meaningfully corrected

• There is a lot of uncertainty around the future of both the private & public markets (Ukraine, rising rates etc.)

If you enjoyed this breakdown make sure to check out the full Report👇

Redpoint: State of Current Market

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Favorites from the Ecosystem

Investors👇…..

Sandy Kory @sandykory

Being product-led in a category full of sales-led software players is such an unfair advantage. It's not just that go-to-market will scale more efficiently. It's that product development feedback loops will be 10x faster.

Jason ✨BeKind✨ Lemkin #ДобісаПутіна @jasonlk

One huge change from ‘18-‘21 was late stage VC became such a insanely great deal for LPs Why write small GP checks and wait 10-12 years for cash? Why not get same IRR with checks 2x-40x the size, with far faster liquidity? The wake-up there is the real reckoning in venture

Founders👇……

Mateo Vega-Sanz🦄 @MattVanzz

Sat in on some pitches recently and quickly realized a lot of Founders could benefit from these 10 tips: Learned this all in my transition from most rejected founder in April 2019 (531 rejections out of 532 investors) to having 40+ firms fight for our Series A last year

Andrew Gazdecki @agazdecki

Stop building startups in “stealth mode”. The market has feedback that you need to hear.

Operators👇…..

Ross Simmonds @TheCoolestCool

If you’re a SaaS marketer: You should study Monday dot com. The SEO, brand & growth strategies they used achieve a $5.7B market cap and reach 152k customers is so impressive. It's a masterclass really. Here's a few things you can learn from them 🧵

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What We’re Reading and Listening To…

📚 Were the “Covid Multiples” in SaaS Just an Anomaly?

📚 The Private Equity Market in 2021: The Allure of Growth

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

Veracode secures significant growth investment from TA Associates

Vista Equity eyes April for first close of $24B fund

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End Note 🔚

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