According to recent statistics, early-stage SaaS businesses may be the most vulnerable to changing valuations among technology companies.
According to a survey by Silicon Valley Bank (SVB) on first-quarter software startup trends, late-stage SaaS valuations in the United States grew the fastest in 2021, ending the year with the highest revenue multiples of their peer group.
The quick rise in the value of software equities in the aftermath of the pandemic’s inception in 2020 and into much of 2021 contributed rocket fuel to late-stage startup valuations, as is widely known. However, it is just now becoming evident how much damage late-stage SaaS startups may face.
Remember that layoffs are already on the rise in the market, and some unicorns are attempting to re-price their stock to retain employees.
Isn’t it strange that the startups with the highest valuations appear to be on the verge of a major correction? Not at all.It’s purely coincidental. Let’s take a look at why.
As is well documented, the rapid surge in the value of software shares following the pandemic’s onset in 2020 and into much of 2021 gave rocket fuel to late-stage startup valuations. However, the extent of the damage that late-stage SaaS businesses may suffer is only now becoming clear.
Keep in mind that layoffs are already on the rise in the market, and several unicorns are attempting to re-price their shares in order to keep their personnel.
Isn’t it strange that the most valuable companies appear to be on the verge of a massive correction? Not at all.It’s all a coincidence. Let’s look at why that is.
Joseph Gutierrez holds Master’s degree in Business Administration. As an avid day trader, he is a master of technical analysis and writes tirelessly on how stocks are trading. Joseph has extensive knowledge in technical analysis & news writing. He delivers news reports regarding Market category.
