With SaaS Valuations Returning to 2018 Levels, Is Now the Time to Buy?

Surprisingly, The Answer May Be No

John Mecke
11 min readOct 20, 2022


Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with saying that “the time to buy is when there’s blood in the streets.” In late 2022 it is clear that the SaaS market is in trouble. The Nasdaq is off over 34%. Median Enterprise Value/Revenue valuations are off 58% in comparison to their peak in 2021. Many companies might consider now to be a good time to jump into the M&A game. Experience has shown, however, that a well-reasoned M&A strategy is required for success

In this article we will talk about:

  • 2022 SaaS Valuation Trends
  • Can You Buy Your Way Out of a Problem?
  • Acquisitions Can Be Transformative
  • You Need an M&A Strategy
  • Acquisition Types
  • Acquisition Constraints
  • Acquisition Currency
  • Return Requirements
  • Acquisition Styles
  • The Borg
  • The Hippies
  • Knights in Shining Armor

2022 SaaS Valuation Trends

There is no doubt that 2022 has been tough on SaaS valuations. By October, the Nasdaq is off 34% since the start of the year:


In August, the Software Equity Group published a great study Staying Power: A Dive into Software M&A Trends in 2022. It showed that the median Enterprise Value/Revenue valuation for SaaS firms in the SEG SaaS Index had declined 58% in comparison to their peak in 2021:

Staying Power: A Dive into Software M&A Trends in 2022

Some SaaS market segments have seen even greater declines in valuation:



John Mecke

John has over 25 years of experience in leading product management and corporate development organizations for enterprise firms.