iMerge Private SaaS Index.
The definitive valuation benchmark for lower-middle market software companies ($3M–$50M ARR). Most valuation data tracks unicorns and public stocks. We track the reality of the private market.
Private SaaS valuation multiples.
Private lower-middle market data from iMerge’s active transaction flow. Public SaaS multiples have compressed sharply — private M&A lags by 6–18 months, but the bifurcation between defensible and commoditized SaaS has never been wider.
Source: iMerge Advisors transaction data, 150+ lower-middle market software exits ($3M–$50M ARR). Updated Q3 2026.
“The valuation gap between defensible, high-growth software and everyone else has never been wider — even as the public median fell to a decade low, the elite decile re-rated above its 2021 peak.”
After the Q1 2026 AI-disruption re-rating, public SaaS multiples hit their lowest level in over a decade, yet growth is now roughly 2–3x more correlated with valuation than margin. For private lower-middle-market sellers the read is clear: buyers still pay a premium for durable growth and 110%+ net retention, and discount slow-growth, commoditized assets more aggressively than in any recent quarter.
How we calculate private SaaS multiples.
Most valuation data is based on public comparable companies — which trade at a 30–50% premium to private peers and respond instantly to macro conditions. We use a triangulated approach anchored in private transaction reality.
Private Deal Flow
We analyze anonymized data from active LOIs and closed transactions within the boutique advisory space — what buyers are actually paying today, not public comps.
Lending Caps
We incorporate valuation cap data from non-dilutive capital providers (like SaaS Capital) to establish the floor valuation for recurring revenue assets.
The Illiquidity Discount
We apply a proprietary discount model (typically 30–40%) to public SaaS indices (SEG/Bessemer) to correct for the liquidity risks inherent in private M&A.
Valuation reports & analysis.
Q1 2026 Private SaaS Valuation Report
Multiples stabilized at 4.0x–5.5x ARR median. The Rule of 40 bifurcation: companies above 40 are trading at double the valuation of peers below. Key driver: retention now outweighs growth in buyer underwriting.
How to Value a Software Company — 3 Methods Buyers Actually Use
The three valuation methodologies buyers apply to software companies, how they differ, and what drives the gap between your number and theirs.
The Ultimate Guide to SaaS Company Valuation
Multiples, formulas, and what each metric actually signals to a buyer. ARR vs. EBITDA, NRR impact, Rule of 40, and benchmark data.
Where does your company fall in the index?
30 minutes with a partner. We apply the iMerge methodology to your specific metrics and give you a realistic valuation range — confidentially, no obligation.