Welcome to the latest edition of the Silverpeak Benchmark report – Application Software Sector, a review of key company valuation metrics in the US, UK and European application software sectors. By reviewing sector median averages, our aim is to provide a set of software industry benchmarks against which individual company performance can be measured.
Although revenue multiples of US software companies continue to be higher than the rest, Small & Mid Cap UK and European companies have shown much greater Y.o.Y growth.
There has been an overall increase in revenue multiples this quarter with the exception of US Vertical which reached a peak of 10.6x at the start of September and fell substantially by the end of Q3.
EBITDA multiples for UK and European software companies continue to rapidly increase and outperform the US companies on Y.o.Y growth. European software multiples increased by 11% Q.o.Q reaching US Vertical levels for the first time since 2016.
Even though HR tech continues to have a significantly higher median enterprise index value than the other verticals, the median EV has fallen by 5% in Q3.
Silverpeak has updated its research into Series B & C round in European Tech Companies.
Series B & C investment in European tech companies sky-rockets with total capital invested in H1 2021 increasing 115% on H2 2020, Q3 2021 increasing 170% to €7.2bn, compared to Q3 2020
Proportion of larger rounds continue to rise: the proportion of B rounds exceeding €20m increased to 65% and C rounds exceeding €50m increased to 62%
The median value of C rounds has increased significantly to €82m, double H1 2020, due to a series of mega-rounds
UK companies continue to receive the largest share of European investment – 29% by value and 31% by number
The largest C round investment in 2021 YTD was €810m, approximately 3x larger than the biggest C round in 2020
Europe continues to generate outstanding tech companies, attracting 39 mega-rounds in excess of €100m to Q1 – Q3 2021
Paddy MccGwire, Managing Partner, commented that “The extraordinary step change in investment by number and value in 2021 is set to continue as fund ’dry powder’ is accompanied by a proliferation of new and existing players announcing fresh funds”
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