By: Marco Jootsen, Associate at Knight Capital In our SaaS Valuation Update over 2021, we identified and tracked nearly 100 of the most influencing SaaS companies around their world. We kept track of the performance and valuations of these companies, and we have displayed our findings across eight graphs. These graphs benchmark the underlying companies and the SaaS Index against its relevant peers. We found some striking conclusions on the significant variance among stock and company performances, growth drivers, and changes in company valuation over the year. Whereas other research generally comprises a smaller subset of (listed) SaaS companies with a narrower focus on common metrics such as growth and gross margins, we have included some typical SaaS metrics such as Net Retention Rate and Rule of 40 in our analysis. Some insights that we found: Since March 2021, the NASDAQ and S&P 500 have outperformed the SaaS Index with 9.1% and 11% respectively The highest valued SaaS companies have outperformed the general SaaS Index in stock performance Growth became the most relevant driver of valuation multiples for SaaS companies.

1. Knight Capital
Public SaaS Update
2021

2. $0
$500,000,000,000
$1,000,000,000,000
$1,500,000,000,000
$2,000,000,000,000
$2,500,000,000,000
$3,000,000,000,000
$3,500,000,000,000
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
Market Capitalization
Total Market Cap
Double-Digit Growth of SaaS Market Capitalization Over 2021
$2.6T The SaaS Market
Cap per December
2021
12.2%
94 The Number of
Companies the SaaS
Index Constitutes
12

3. 80
90
100
110
120
130
140
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
SaaS Index vs. Peer Benchmarks
SaaS Index S&P 500 NASDAQ
The Outperformance of SaaS Stock in 2021 Has Evaporated in Q4
The
performance of
SaaS stocks
since March
2021 has fallen
below the S&P
500 and
NASDAQ with
11% and 9.1%
respectively.
9% The SaaS stocks
return since March
2021

4. 32.2
47.4
38.0
260.8
213.7
197.9
20
70
120
170
220
270
320
370
420
470
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
Out- and Underperformers of 2022
Agora C3.AI Upland Software Asana Datadog MongoDB SaaS Index
High Variance of SaaS Stocks Compared to SaaS Index
161% Asana’s return since
Q1-2021
-68% Agora’s return since
Q1-2021
Asana
Datadog
MongoDB
SaaS Index
C3.AI
Upland
Agora

5. SaaS’ Share Prices Has Fallen More Than The Company Performance in 2021
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
8x
10x
12x
14x
16x
18x
20x
22x
24x
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
Median
Market
Cap
[x$MM]
Median
Revenue
Multiple
Median Multiples vs. Median Market Capitalization
Median Multiple Median Market Cap
- 16%
- 13%
SaaS share prices have dropped
faster than revenues and thus
performance, illustrated by the larger
drop in multiples than market
capitalization.

6. 0x
2x
4x
6x
8x
10x
12x
14x
16x
$-
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
$40,000,000,000
$45,000,000,000
$50,000,000,000
01-03-21 01-04-21 01-05-21 01-06-21 01-07-21 01-08-21 01-09-21 01-10-21 01-11-21 01-12-21
Average Market Cap High Valued SaaS vs All SaaS
Median Market Cap 40X Valued Companies Median Market Cap All Number of 40X Valuations
Growth in Market Cap Comes From Highest Performing and Valued SaaS Companies
The median Market Cap of SaaS companies rewarded
with a >40X multiple has risen 54% over 2021,
compared to a 13% decline for the overall SaaS Index.

7. 0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
Correlations with Valuation Multiples
Growth NRR Rule of 40
Growth Has Surpassed Retention as Strongest Valuation Driver
0.61
Growth has the strongest
relationship with valuation
multiples
Generally, SaaS valuation multiples became more related
to its underlying drivers. This could reflect signs of a
maturing market and increased transparency.

8. 39.0% 40.0%
43.0%
41.0%
44.0% 45.0% 45.0% 45.0% 43.5%
46.0%
30%
40%
50%
60%
Median Rule of 40
SaaS Performance Has Generally Improved, and Growth Favored
31.0% 32.6% 32.7% 32.7%
34.5% 36.0% 36.0% 36.0% 35.9% 35.9%
20%
30%
40%
50%
Median Growth
Median Rule of 40 and growth rates have risen from
39% to 46% and 31% to 36% respectively.
76.0% 76.0% 76.2% 76.0% 76.0% 76.0% 76.0% 76.0% 76.0% 76.0%
40%
60%
80%
Median Gross Margin
8.0% 8.0% 9.0% 8.5%
6.0% 5.0% 5.0% 5.5% 5.0% 5.0%
0%
5%
10%
15%
20%
Median Free Cashflow Margin
Median free cashflows have decreased since the
beginning of 2021. Over 2021, free cashflows were
negatively (!) correlated to valuation multiples (~0.23
-/-) illustrating investor’s preference for high growth
stocks that reinvest cashflows.

9. Conclusion
The SaaS Index is characterized by high variance among individual SaaS companies. Over 2021, we have seen higher valued
companies gaining and lower valued companies stagnating. The median of this group was traded 2.5 – 4.0X as high as the remaining
SaaS companies, which is a continuation of the trend.
The overall SaaS Index has underperformed compared to its peers, despite an improved overall performance. Growth has acted as
the leading indicator for investors, beating other metrics such as capital efficiency and retention.
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Agora
Alkami
Alteryx
Amplitude
Anaplan
AppFolio
Asana
Atlassian
Avalara
BigCommerce
Bill.com
BlackLine
Box
C3.ai
Cloudflare
Confluent
Couchbase
Coupa
CrowdStrike
CS
Disco
Darktrace
Datadog
DigitalOcean
DocuSign
Domo
Dropbox
Elastic
Fastly
Freshworks
HubSpot
Jamf
Jfrog
KnowBe4
Lightspeed
POS
Monday.com
MongoDB
nCino
New
Relic
Olo
Okta
PagerDuty
Palantir
Paycom
Paylocity
Ping
Identity
Procore
Q2
Qualtrics
RingCentral
Salesforce
Sentinelone
ServiceNow
Shopify
Smartsheet
Snowflake
Sprinklr
Squarespace
Sumo
Logic
Momentive
Global
Tenable
Toast
Twilio
UiPath
Veeva
WalkMe
Wix
Workday
Zendesk
Zoom
Zoominfo
Zscaler
Zuora
ANSYS,
Inc.
Ceridian
HCM
Holding
Inc
Palo
Alto
Networks
Inc
PTC
Inc
Splunk
Inc
Upland
Software
Inc
Vertex,
Inc.
Duck
Creek
Technologies
Inc.
Bentley
Systems
Inc
(BSY)
Agrify
Corporation
2U
Adobe
Everbridge
Mimecast
Paypal
Qualys
Sprout
Social
Square
Workiva
Yext
Change in Valuation Multiples Over 2021

10. C OMMENTS?
marco@knight.capital
Marco Joosten
https://www.linkedin.com/in/joostenmarco/
Address
Herengracht 450
1017 CA Amsterdam
The Netherlands
www.knight.capital
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