So yesterday OG SaaS pioneer Zuora agreed to be acquired by PE to go private for $1.7 Billion by GIC and Silverlake. That is good for SaaS.
CEO Tien Tzuo is an OG SaaS chief since being one of many very first leaders at Salesforce.
Zuora was very early to subscription administration — possibly too early (2006) — and constructed a mature $400m ARR enterprise targeted on enterprise subscription administration (and extra).
- $416m ARR
- 9% progress
- 11% free money move margins
- 104% NRR
- 445 $250k+ clients
So … $1.7 Billion is 4.25x ARR. And that’s with an 18% premium to go non-public. Earlier than, it was buying and selling at $1.5 Billion, so lower than 4x ARR.
That’s not an enormous a number of, and in that sense, it’s a reminder that progress issues greater than profitability as we speak
However it’s additionally nice to see PE proceed to consider that may re-ignite progress in SaaS and make 3x+ their cash right here. Silverlake could be very, very sensible. Clearly they consider they will make investments extra and develop Zuora to $5B+ when it IPO’s once more down the highway.
Zuora received lean, it received money producing, and whereas new buyer progress slowed, it saved the 445+ massive clients it had, with 104% NRR
For GIC and Silverlake, it’s a wager the magic of 100%+ NRR, with an opportunity to take a position a bit extra by going non-public, will nonetheless result in massive outcomes.
And a terrific basic SaaStr podcast with CEO Tien Tzuo and Harry Stebbings right here:
