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See what your business could be worth today, and what would need to change to reach your target.
Tip. Start with the bootstrapped preset. Then test a lower and higher range.
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SaaS valuation
Free SaaS Valuation Calculator
Use this Free SaaS Valuation Calculator to estimate what your SaaS business could be worth. Enter your recurring revenue and choose a range of multiples. You get a low, base and high estimate, with every formula shown.
- Runs in your browser
- Nothing is saved or sent
- Every formula shown
The basics
What a SaaS valuation tells you
A SaaS valuation is an estimate of what a software business could be worth to a buyer or investor. It is not the price you will get. It is a starting point for planning and for conversations.
SaaS companies are valued differently from most businesses. Customers pay every month or every year, so future revenue is fairly predictable. That is why buyers often price SaaS on recurring revenue, not just on today’s profit.
The Free SaaS Valuation Calculator on this page uses that approach. It takes your annual recurring revenue and applies a range of multiples. You can also add an earnings view and an equity view.
Why it is worth knowing
- Fundraising. A rough value helps you judge whether a proposed investment and share sale make sense.
- Selling the business. You can test whether an offer is in a reasonable range before you negotiate.
- Planning. Seeing how revenue, churn and margins affect value shows you where to focus.
- Partners and team. Equity grants and buyouts are easier to discuss with a shared starting point.
Who it’s for
Who uses a SaaS valuation calculator, and how
Different people use the same numbers for different decisions. Here is how each group can get the most from it.
Startups preparing to raise
Get a sense of value before you talk to investors about how much to raise and at what price.
Tip. Use the equity backed preset. Read the result as a guide, not a pre money valuation.
Bootstrapped owners thinking of selling
Small, profitable SaaS is often bought on earnings. Compare both methods.
Tip. Enter normalised EBITDA and an EBITDA multiple from a broker or adviser.
Investors screening companies
Run a quick check on a company’s numbers before deeper research.
Tip. Change the multiples to match your own view of the market.
Buyers doing early analysis
Test what you could pay before you ask for full financials.
Tip. Add debt and cash to see the equity value the seller would receive.
Operators tracking progress
Run the same inputs every quarter to see whether value is moving the right way.
Tip. Keep the multiples fixed so you only measure changes in the business.
What the calculator helps you do
- Get a baseline in minutes. You only need one revenue figure to start.
- Test scenarios. Change a multiple or a revenue figure and see the effect straight away.
- See the method. Every result shows the formula behind it, so you can check it or explain it to others.
- Prepare better questions. You will know which numbers buyers and investors are likely to ask about.
- Keep it private. It runs in your browser. Nothing is saved or sent.
Worked example
A step by step SaaS valuation example
This example uses a made up company with illustrative figures. It shows how the calculator works. It is not a real business or a market benchmark.
The company
A B2B scheduling tool. It is bootstrapped and profitable, with a small team.
| MRR | $40,000 |
|---|---|
| ARR (MRR × 12) | $480,000 |
| Revenue growth, last 12 months | 30% |
| Net revenue retention | 104% |
| Monthly customer churn | 2% (about 21.5% a year) |
| Gross margin | 80% |
| EBITDA margin | 15%, so EBITDA is $72,000 |
| Debt | $50,000 |
| Cash | $120,000 |
Step 1. Revenue multiple method
Using the bootstrapped preset of 3.0×, 4.8× and 7.0×.
| Scenario | Formula | Enterprise value |
|---|---|---|
| Low | $480,000 × 3.0 | $1,440,000 |
| Base | $480,000 × 4.8 | $2,304,000 |
| High | $480,000 × 7.0 | $3,360,000 |
Step 2. EBITDA multiple method
Say an adviser suggests 5× EBITDA for this business. That gives $72,000 × 5 = $360,000.
That is far below the revenue estimate. It is normal for the two methods to differ like this. The revenue method pays for growth and retention. The earnings method only pays for today’s profit, and this company reinvests most of its revenue. The gap is a useful talking point, not an error.
Step 3. Equity value
Base equity value is $2,304,000 minus $50,000 debt plus $120,000 cash, which is $2,374,000. That is roughly what the owners could receive before tax, fees and deal terms.
Step 4. Sense check the range
Growth of 30% and NRR above 100% are healthy signs. But 2% monthly churn means losing about a fifth of customers each year. A buyer would likely focus on that. A fair conclusion is that base is a reasonable anchor, and churn is the main thing holding the business back from the high end.
Your results
How to read and use your valuation results
Treat the base value as an anchor
The base value is a central estimate for your chosen multiple. It is a starting point for thinking, not a promise. Real offers can land outside the whole range.
Look at the width of the range
A wide gap between low and high means the value depends heavily on the multiple. That is normal for SaaS. Your metrics help you decide where in the range you are likely to sit.
Know which value you are looking at
Enterprise value is the value of the business. Equity value is what the owners might receive after debt and cash. When people talk about “what I’d get”, they usually mean equity value.
Compare the two methods
If the earnings value is far below the revenue value, buyers focused on profit may offer less. If it is close or higher, the business may appeal to more types of buyer.
Where might your business sit in the range?
Use your metrics to judge whether you belong nearer the low or high multiple. These are general patterns, not fixed rules.
| Factor | Points toward the low end | Points toward the high end |
|---|---|---|
| Growth | Flat or falling revenue | Strong, steady growth |
| Retention | NRR below 100%, high churn | NRR above 100%, low churn |
| Gross margin | Low, due to heavy hosting or service costs | High and stable |
| Profitability | Losses with no clear path to profit | Profitable, or a clear path to it |
| Customers | One customer is a large share of revenue | Revenue spread across many customers |
| Records | Metrics are hard to verify | Clean monthly reporting |
Value drivers
The metrics that shape a SaaS company’s value
Buyers and investors look at a handful of core metrics. Each one tells them how reliable and how scalable your revenue is.
Annual and monthly recurring revenue
ARR is the yearly value of your active subscriptions. MRR is the monthly version. ARR equals MRR × 12.
Why it matters. Buyers pay most for revenue that repeats. One time setup fees and consulting are usually valued much lower, so keep them out of ARR.
Revenue growth
How fast revenue grows year on year. The calculator can work it out from two 12 month revenue figures.
Why it matters. Faster, steadier growth usually supports a higher multiple. A single good month counts for less than a consistent trend.
Churn rate
Customer churn is the share of customers who cancel in a period. A small monthly rate adds up. 2% a month is about 21.5% a year.
Why it matters. High churn means you must keep replacing customers just to stand still. Buyers see that as risk.
Net revenue retention
NRR shows how much revenue you keep from existing customers after upgrades, downgrades and cancellations.
Why it matters. NRR above 100% means existing customers grow on their own. It is one of the strongest signals of a healthy SaaS business.
Gross margin
Revenue minus the direct cost of delivering the product, such as hosting and support, shown as a percentage.
Why it matters. Higher gross margin means more of each new dollar can fund growth or become profit.
Profitability
Usually measured as EBITDA. The Rule of 40 adds growth and EBITDA margin together.
Why it matters. Profit matters more for smaller and slower growing companies, where buyers often value on earnings.
Customer concentration
The share of revenue from your largest customer or customers.
Why it matters. If one customer leaving would hurt badly, buyers usually price in that risk.
Valuation multiples
The number your ARR or EBITDA is multiplied by. It reflects all the factors above, plus market conditions.
Why it matters. Multiples change with the market and with each buyer. That is why the calculator lets you set a range.
Methodology
How the calculator works
Two methods are shown side by side. They are never averaged into one number.
1. Revenue multiple method Primary
This is the main method. Most SaaS companies are valued on recurring revenue, because it is predictable and many are still investing for growth.
ARR = MRR × 12 (only if you enter MRR)
Low value = ARR × low multiple
Base value = ARR × base multiple
High value = ARR × high multiple
If you enter ARR, it is used as is. MRR and ARR are never added together. Only one is used.
2. EBITDA multiple method Optional
Useful for profitable businesses, especially smaller owner run SaaS, where buyers often focus on earnings.
EBITDA = ARR × EBITDA margin (if you enter a margin)
Value = normalised EBITDA × EBITDA multiple
It only runs when EBITDA is above zero and you enter an EBITDA multiple. A multiple on negative earnings would give a misleading value.
3. Enterprise value and equity value
Both methods give enterprise value. That is the value of the business itself, before debt and cash.
Equity value = enterprise value minus debt plus cash
This is a simplified bridge. Real deals also adjust for working capital, deferred revenue, other liabilities and deal costs.
4. Why there is no automatic adjustment
Growth, retention, churn and margins strongly affect value. But there is no reliable public formula that turns each one into a fixed change in the multiple.
So the calculator does not add hidden bonuses or discounts. Instead, it shows these metrics next to your result. Use them to choose your own low, base and high multiples. This also avoids counting the same risk twice.
Why there is no DCF model
A discounted cash flow model values future cash flows today. For most private SaaS companies, the result depends almost entirely on guesses about growth, margins and the discount rate many years ahead. A short web form can’t make those guesses reliable, so we left it out rather than show a precise looking number.
Where the reference multiples come from
| Value | Bootstrapped | Equity backed | Basis |
|---|---|---|---|
| Low | 3.0× | 3.5× | Illustrative assumption. Not taken from market data. |
| Base | 4.8× | 5.3× | SaaS Capital predicted median ARR multiples for private B2B SaaS companies, published January 2025, based on its annual survey. |
| High | 7.0× | 7.0× | SaaS Capital Index median for public SaaS companies at the start of 2025. Private companies usually trade below public ones, so it is used as an upper reference. |
Source SaaS Capital, private SaaS company valuations and multiples (opens in a new tab). These are model estimates from self reported survey data, not observed sale prices. They apply to B2B SaaS and may not fit very small, very large or consumer businesses. Market multiples change over time. Check current data before relying on them.
Improve your numbers
Practical ways to increase your SaaS valuation
Value comes from the same metrics the calculator shows. Improve those, and your business becomes worth more to more buyers. Most of these changes take months, so start early.
Reduce churn first
Find out why customers leave. Improve onboarding so new users reach value quickly. Fix the top reasons people cancel.
Onboarding and product designGrow revenue from existing customers
Add upgrade paths, usage tiers or add ons. Higher NRR raises value without needing more new customers.
Move customers to annual plans
Annual contracts make revenue more predictable and improve cash flow. Offer a fair discount for paying upfront.
Separate recurring and one time revenue
Report subscription revenue on its own. Clean ARR is easier for buyers to trust and value.
Protect your gross margin
Review hosting, third party tools and support costs. Automate common support questions where you can.
Development and performance workSpread revenue across more customers
Reduce reliance on your largest accounts. Build a steady flow of new customers from more than one channel.
SEO for SaaSKeep clean monthly metrics
Track MRR, churn, NRR and margins the same way every month. Good records make due diligence faster and build trust.
Make the business less dependent on you
Document processes and share key knowledge. A business that runs without its founder is easier to buy.
Re-run the Free SaaS Valuation Calculator each quarter with the same multiples. That way, any change in the result comes from changes in your business.
Assumptions and limits
What this estimate can and can’t tell you
What you decide
- Your revenue, growth, retention and profit figures
- Which revenue figure is used, MRR or ARR
- The low, base and high multiples
- The EBITDA multiple, if any
- Debt and cash, if any
What comes from research
- The starting reference multiples and their sources
- The formulas themselves, which are standard
Nothing else is assumed. Blank optional fields stay blank. They are never treated as zero.
What the calculator can’t see
- Product quality and technical debt
- Contract terms, such as notice periods and price locks
- How much the business depends on the founder
- Legal, tax and intellectual property issues
- Whether your figures are accurate and consistent
Why a real offer may differ
- Deal structure, such as earn outs and payment terms
- Quality of revenue and financial records
- Market conditions on the day
- The buyer’s strategy and competition between buyers
- Findings from due diligence
The low, base and high results are scenarios based on the multiples you choose. They are not a statistical confidence range. For a sale, fundraise or legal purpose, get a formal valuation from a qualified professional.
FAQ
Common questions
Is this a formal valuation?
No. It is an indicative estimate based on your inputs and chosen multiples. A formal valuation looks at your full financials, contracts, market and deal terms.
Why does the calculator use ARR and not total revenue?
Recurring revenue is what buyers and investors value most, because it is predictable. One time setup fees and services are usually valued lower, so they should be left out of ARR and discussed separately.
Why are the low and high results so far apart?
Similar looking SaaS companies sell at very different multiples. Growth, retention, margins, size and buyer demand all matter. The range shows how much the result depends on the multiple.
When should I use the EBITDA method?
When the business makes a steady, positive profit, and especially for smaller owner run SaaS. Use normalised EBITDA, with one off costs removed and owner pay set to a market salary.
Why doesn’t my growth rate change the result?
There is no reliable fixed formula for it. Instead, use your growth, retention and margins to decide which multiples are fair, then enter them yourself.
What can I do if my business has no revenue yet?
A revenue multiple doesn’t work without revenue. Early companies are usually valued on the team, product, market and traction, often through a funding round. The calculator tells you this instead of showing a number.
How often should I run a valuation?
Once or twice a year is enough for most founders. Run it again before a fundraise, a sale or a big planning decision. Use the same method each time, so you can compare results fairly.
Is my data saved or shared?
No. Everything is calculated in your browser. Nothing you enter is stored or sent anywhere.
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