6 of 10 multiples reach record highs in Q4

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.

 Report highlights

  • Both revenue & EBITDA multiples have continued to bounce back significantly. All categories now record both revenue and EBITDA multiples which exceed the 24- month average, with 6 of the 10 multiples reaching record levels.
  • US application software median revenue multiples continue to chart new all-time highs in Q4’20. US Horizontal recorded the lowest growth in revenue multiple across all categories of 10.5%. For the first time since mid-2018, US Horizontal revenue multiples are now lower than US Vertical multiples, despite recording the largest increase in its forecast annual revenue growth from 7% to 11%.
  • EBITDA multiples for the US Horizontal, Europe and UK Small & Mid have reached the highest levels on record. US SaaS and US Vertical EBITDA multiples recover strongly, though remain below their peak. However, the median EBITDA margin has not changed significantly in Q4 for any categories.
  • HR Tech continues to outperform other sub sectors in our Enterprise Value index, despite signs of downward trend at the start of the quarter. The 5 subsectors all increased at varying levels across the quarter, finishing at high points with the exception of FinTech which is still below its January 2019 level.

If you would like to discuss this report further please contact:

 Paddy MccGwire


Silverpeak Benchmark Report Q4 2020

WEBINAR – Selling or Funding – what tech companies need to consider now – 8 December 2020

DOWNLOAD PRESENTATION HERE Silverpeak & Fieldfisher Webinar

Silverpeak, together with international law firm Fieldfisher, held a webinar on Tuesday 8th December 2020.

The briefing aimed to provide practical guidelines and best practice for those seeking to sell or raise finance in the current environment. Attendees also heard from Matthew Hare, Zzoomm CEO, providing his experience of successfully raising a large funding round.

Who should attend

This webinar was relevant to CEOs, Chairmen, FDs/CFOs, Non-executive Directors, shareholders and VC/PE investors with a stake in technology companies


08.30 Introduction
08.35 Series B&C Financing and M&A trends & valuation metrics
08.45 Legal issues in the current climate
09.00 A CEO’s experience of a big funding round
09.10 Practical points for an optimal transaction
09.30 Panel discussion
09.45 Q&A to Panel
10.00 Close



US revenue multiples at record highs

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.

Report highlights

  • In contrast UK Small & Mid revenue multiples, which are now below Europe, are still down 40% Y.o.Y. while its median forecast annual revenue growth saw a significant decrease of two thirds to 1.7%.
  • European revenue and EBITDA multiples look to have both recovered strongly in Q3. There was an uplift of 31% in the median EBITDA multiple in Europe to 20x, exceeding the 24-month average. Europe also showed the largest relative increase in median forecast revenue growth increasing to 7.5%.
  • EBITDA multiples have increased to levels above the 24-month average for US Horizontal, Europe and UK Small & Mid. US SaaS and US Vertical EBITDA multiples are well below their peak, but were constant Q.o.Q, The median EBITDA margin has not changed significantly in Q3 for any category.
  • HR Tech continues to outperform other sub-sectors in our Enterprise Value growth index. Other subsectors remained stable across the quarter, but median values showed signs of a downward trend in September.

Silverpeak Benchmark Report Q3 2020

Bullish technology market catalyses strong recovery in multiples for US players

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.

Report highlights

  • Both revenue & EBITDA multiples have bounced back significantly but comparing Q2 multiples to the 30-month average, only US Horizontal exceeds both revenue and EBITDA 30-month average, with US Vertical exceeding just the revenue multiple.
  • US Vertical revenue multiples rocket 54% to 6.2x, however still remains lower than US SaaS and US Horizontal which recovered at c.27%, similar to Europe. UK Small & Mid Cap experienced the slowest recovery, with revenue multiples gaining only 5.5% during Q2.
  • EBITDA multiples rise for all categories except UK Small & Mid Cap which still remain at Q4 2018 levels. US Horizontal EBITDA multiples are higher than US SaaS for only the second quarter since mid-2017. However, all EBITDA multiples remain lower Y.o.Y and there has been little change in the median EBITDA margin during Q2.
  • HR Tech subsector is the clear winner in our Enterprise Value growth index due to the new ‘work from home and office’ environment. Median forecast annual revenue growth continued to contract for all categories, with UK Small & Mid Cap worst affected, reducing by a half to 5.9%.

Silverpeak Benchmark Report Q2_2020

Comparing views on the current COVID-19 challenges and opportunities for tech growth companies

Board Chair Midsummer Drinks Reception and discussion – 22nd June 2020

On the evening of Monday 22nd June, Silverpeak, the technology investment bank, co-hosted with Spectrum, the technology executive search firm, an online event for a small group of eight plural Board Chairs of privately held technology growth ventures.

Over a hamper of wine, cheese and pâté – sent in advance – we compared views on the current challenges and opportunities for technology growth companies, in the wake of Covid-19.

We were delighted to listen to, and exchange views, with: Adam Hale; Dale Murray CBE; David Gilmour; James Bilefield; Lisa Stone; Margaret Rice-Jones; Nigel Clifford and Vin Murria OBE.

Pietro Strada began the discussion by highlighting the key observations of Silverpeak since March 2020, most notably:

  • Broadly, the technology and pharmaceutical sectors have been recent market winners
  • Within the technology sector, there are sub-sector dynamics: WFH and remote solutions attract interest, and the number 1 and 2 players in each subsegment have an opportunity to extend their leadership
  • There are different dynamics between the public and private markets; private equity does not believe recent equity market pricing
  • CEOs and management teams are cautious
  • Private equity has capital to deploy
  • Transactions are taking longer
  • Valuations are down
  • Companies are raising two years of cash

This was followed by Daniel Osmer outlining the key Covid-19 observations of Spectrum:

  • Most companies locked down well before UK government advice to do so, and the expectation is that the way of conducting work has changed permanently in many respects
  • Boards have been leant on heavily by their management teams
  • Some enjoy Chairing virtual board meetings and their efficiency; others find the difficulty in reading body language to be challenging
  • In many cases, employee productivity has gone up, but there is a question as to how sustainable this is
  • Clients are reluctant to hire at executive level entirely virtually, although we do expect a greater element of a selection process to be conducted virtually in the future than has been the traditional ‘norm’
  • It is more challenging for candidates to assess company culture via virtual selection exclusively

The key themes which emerged from the broader guest discussion were:

The significant variability of company performance, by market subsector, and by management team response.

Some of the fundamental challenges during Covid-19 have been: “the speed, scale and style of this impact has been different to other recessions”; “it is difficult to plan when management teams have little control over market demand stimulation”; “even with ARR contracts, the impact of the lack of customer cash has been felt”; “the lack of contact, especially when resources have to be on-site, as well as the simple lack of someone to talk to”; “some behaviours under pressure have not measured up to the company’s purpose”.

The importance of purpose: “executives have shone where they have remembered their company’s purpose”; “those that have forgot their purpose have created friction”; “companies have needed to look back at their purpose as an organisation”; “businesses that invested in purpose have fared well, engagement levels have remained as high as they were pre-lockdown – the challenge now is how do we keep this going, and build on it in a more disparate world”.

The importance of leadership: “there is a new level of accountability now with teams”; “many management teams have shown incredible tenacity”; “succession plans have been worked on with executive teams”; “you look closely at teams and reassess what you’ve got and what you need”; “the importance of talent during these really difficult times has been highlighted”.

Partnerships that matter: “there has been a fundamental reassessment of ecosystems”; “you know who your real partners are at a time like this”; “critical to understand your partner, to genuinely partner – and to drive quality up”.

Online meetings have (mainly) worked well: “everyone attends because the session is online, which is levelling”; “future in-person meetings will be reassessed: is it a habit, or of value”; “important to strategize and not simply react”; “quickly made, data informed decisions are important”; “online meetings are time efficient”; “easier when you already know everyone in the online meeting”; “80% of online meetings are very good”; but “interactive, brainstorming meetings are difficult online”.

The humanity now on display: “talk to customers more”; “build intimacy and genuinely partner”; “the contribution by companies to wider society is inspiring and engaging for employees”; “strength, tenacity and kindness to guide and support others”; “seeing people as human beings and not as transactional agents”; “there is nervousness and remorse being shown by people when considering leaving a team”; “we’ll end up with better corporations doing more good”.

The awareness and importance of employee mental health and the Black Lives Matter movement has been complete: “Black Lives Matter has highlighted diversity and disadvantage”; “The Black Lives Matter movement has had a profound effect on organisations”; “the mental health of employees is fundamental”; “the younger you are the tougher it has been – coaching opportunities in a virtual world are very limited”; “inexperienced CEOs have felt anxious”; “there is a fear of joining a new company at this time”.

The acceleration of innovation: “lots of innovation in a small space of time – will deliver a positive medium term impact”; “business myths have been busted – many in a positive way”; “we’ll all work smarter”; “organisations won’t go back to where they were in January”; “elephants can dance when under pressure and have no choice”; “start-up mindset”; “once the cash conservation plan is in place, you look towards re-orientating the business to the new scenario – looking at opportunities, and new ways of driving growth”.

Paddy MccGwire of Silverpeak brought the 90-minute discussion to a close, with some guests choosing to stay online for a relaxed conversation, a key theme of which was UK government support, and, in particular, the furlough scheme and The Future Fund.

Managing Partners

To further discuss these findings, to join future events, or to discuss technology investment banking (Silverpeak) and technology sector board and executive search (Spectrum), please contact:

Paddy MccGwire, Managing Partner Silverpeak pm@silverpeakib.com

Pietro Strada, Managing Partner Silverpeak ps@silverpeakib.com

Daniel Osmer, Managing Partner Spectrum daniel.osmer@spectrum-ehcs.com

Silverpeak Benchmark Report FLASH APRIL 2020 UPDATE

We are issuing this interim April report due to the dramatic decline and recovery in multiples over the last 3 months. We have added additional chart showing the SaaS multiples split by 75th, and 25th percentile, mean and median which illustrates the spread of SaaS performance.  For this update the charts are just from 1 January 2019 to 30 April 2020.

Report highlights

  • From the low point to 30 April, Median Revenue multiples for US Vertical and Europe recovered 70% of the loss, US SaaS and Horizontal 60%, and UK 50%.
  • Many software sub-sectors are seen to be behaving in a resilient way to COVID-era trading. US Horizontal EBITDA multiples recovered to near pre-COVID levels.
  • The SaaS chart shows how the 75th percentile revenue multiple was the biggest faller in Q1 at 3.9x to near the Mean, and now has recovered 2.5x of the loss to 9.7x. Quality is still rewarded with 75th percentile multiple almost 200% of the 25th percentile 5x, which is 1.9x below Median. However, both recovered the same 63% of their loss to 30 April

Silverpeak Benchmark Report FLASH APRIL 2020 UPDATE