Sacks @ 00:16:05Right
marketseconomytechventure
Over the coming years, public SaaS company valuations will not return to the extreme 2021 bubble levels (e.g., ~100x revenue) but will instead normalize around valuation multiples similar to those seen circa 2017.
And that's why we're never going back to the bubble of 2021, where SaaS companies were trading at 100 times IRR. We're going to go back to an environment more like a more normal one, where valuations are more likely. The 2017 valuations, something like that.View on YouTube
Explanation
Available market data supports Sacks’s view that, in the years after early 2023, public SaaS valuations did not return to the 2021 bubble extremes and instead re‑normalized to roughly pre‑COVID / ~2017 ranges.
Bubble reference point
- During the 2020–2021 boom, Bessemer’s Cloud 100 shows average cloud valuation multiples around 34x ARR in 2021, far above historical norms.
- A detailed SaaS valuation study using S&P Capital IQ notes the highest observed public SaaS multiple was Asana at ~89x LTM revenue in November 2021, illustrating the kind of ~100x revenue outliers Sacks was talking about, and that these levels were confined to the 2020–2021 bubble period. (bvp.com)
Post‑2022 normalization & current levels
- Multiple independent sources now place median public SaaS EV/Revenue around 6–7x in 2024–2025. For example: a SaaS M&A / public‑market review cites BVP’s Cloud Index at ~7.5x revenue in early 2025, up from ~6x a year earlier but still far below the 2021 peak near 18–20x. (buttondown.com)
- A separate 2025 valuation summary similarly reports median EV/Revenue for large U.S. public SaaS at ~6.1x as of September 2025, versus a peak near 20x in 2021. (aventis-advisors.com)
- The SaaS Capital Index, tracking public SaaS names, finds median ARR multiples around 7x in early 2025, with even the top 10 highest‑valued companies mostly in the low‑ to mid‑teens (e.g., CrowdStrike ~20.8x, ServiceNow ~19.5x, Datadog ~17.5x)—an order of magnitude below 2021’s ~90x outliers and well below the 30x+ cohort common at the peak. (saas-capital.com)
Comparison to 2017‑era valuations
- Historical work on SaaS comps shows that in 2016–2017, leading horizontal/vertical public SaaS names typically traded in the mid‑single‑ to high‑single‑digit EV/Revenue range (roughly 6–9x depending on subsector). (meridianib.com)
- A 2024 analysis of BVP’s Cloud Index explicitly notes that the current 6–7x median revenue multiple was last seen in October 2017, and characterizes 2022–2024 levels as a return to the “pre‑pandemic normal,” with no signs of a reversion to the 2020–2021 bubble. (linkedin.com)
Assessment versus the prediction
- Sacks predicted: (1) we’re never going back to the 2021 bubble, where some SaaS names traded near 100x revenue, and (2) valuations would revert to a more normal environment similar to 2017.
- As of late 2025, public SaaS valuations have indeed reverted to ~6–7x median EV/Revenue, matching late‑2010s norms, and even the top decile of names trade at <25x ARR—far below the 2021 extremes.
Given nearly three years of post‑podcast data showing sustained normalization at 2017‑like multiples and no re‑emergence of bubble‑level (~100x) public SaaS valuations, the prediction has so far played out as described. Hence, it is reasonable to mark this forecast as right on the available evidence.