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Figma IPO

Figma IPO priced at $33, opened at $94 and ended at nearly $120 (a 250% gain!!)...A nearly $50B market cap versus the $20B potential acquisition with Adobe the was called of due to regulatory concerns.

Figma should be thanking Linda Khan (former FTC chair) who killed the deal with Adobe. Figma got a nice $1B breakup free and are now worth 2.5x the amount!

Every time we have an IPO with a huge pop Bill Gurley explains why IPOs are the worst. Its a good thread.

Here is what Figma's CFO said...

Software M&A & Public Market Q2 Update

Great report from SEG on the state of SaaS. Below are a few of my favorite charts and insights.

SaaS deal volume remains fairly stead of the the past couple of years.

Average and median SaaS LTM revenue multiples

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Top M&A categories by deal volume

Acquirers are looking for riches in the niches. Vertical software acquisitions continues to make up a larger % of total M&A. Vertical software is generally more efficient and resilient during economic headwinds or uncertainty so the trend makes sense.

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There are a lot of flavors of M&A. The typical best outcome is a public strategic, then private strategic, and then and then all the PE flavors. The percentage from PE direct surprises many folks -- a lot of deals are tuck-in activity.

If you are thinking about selling to PE, then here are the top buyers of SaaS companies.

"High-growth" isn't what is used to be...Alot of companies in <10% growth bucket.

I think these Rule of 40 buckets are important to understand, but with a HEAVY caveat that for earlier stage companies growth is basically all that matters -- even $150M - $300M. If you aren't growing quickly relative to scale then the multiple impact is going to be very significant.

*Below uses the following weighting: (1.33 * Revenue Growth) + (0.67 * EBITDA Margin)

Other Good Reads

SaaS Capital released some good benchmarks on median Revenue Per Employee for early stage companies.

Aventis Advisors report on public market data for cloud companies since 2015. Growth has certainly slowed...

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Footnotes:

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