How do I benchmark my SaaS metrics against other exits?

How Do I Benchmark My SaaS Metrics Against Other Exits?

For SaaS founders contemplating an exit, one of the most pressing questions is: How do my metrics compare to other companies that have successfully sold? Whether you’re preparing for a strategic acquisition, private equity recapitalization, or IPO, benchmarking your SaaS metrics against recent exits is essential for understanding valuation potential, identifying red flags, and positioning your company effectively in the M&A market.

This article outlines a practical framework for benchmarking your SaaS metrics against comparable exits, drawing on industry data, valuation trends, and insights from M&A advisors like iMerge who specialize in software and technology transactions.

Why Benchmarking Matters in SaaS M&A

Buyers—whether strategic acquirers or financial sponsors—evaluate SaaS companies through a rigorous lens of performance metrics. These metrics not only influence valuation multiples but also shape deal structure, earn-out terms, and buyer interest. Benchmarking helps you:

Understand how your KPIs stack up against market expectations
Identify areas to improve before going to market
Set realistic valuation expectations
Craft a compelling narrative for buyers and investors

Without benchmarking, founders risk mispricing their business or entering negotiations with blind spots that can erode deal value.

Key SaaS Metrics to Benchmark

While every SaaS business is unique, certain metrics consistently drive valuation and buyer interest. These include:

ARR (Annual Recurring Revenue)
Revenue Growth Rate
Gross Margin
Net Revenue Retention (NRR)
Customer Acquisition Cost (CAC) and CAC Payback Period
Churn Rate
Rule of 40 (Growth Rate + EBITDA Margin)
Burn Multiple (Net Burn / Net New ARR)

Each of these metrics tells a story about your company’s scalability, efficiency, and long-term value. For example, a company with 90%+ gross margins and 120%+ NRR will command a premium multiple, even if growth is moderate.

Sources for Benchmarking Data

To benchmark effectively, you need access to reliable, recent data. Here are several sources to consider:

1. Public SaaS Company Data

Publicly traded SaaS companies provide a wealth of financial and operational data through SEC filings and investor presentations. While these companies are typically larger, they offer useful benchmarks for best-in-class performance. Resources like SaaS Capital and Meritech Capital regularly publish benchmark reports based on public SaaS data.

2. Private Market Reports

Firms like PitchBook, Mergermarket, and S&P Capital IQ track private SaaS M&A transactions, including valuation multiples and select metrics. While access often requires a subscription, M&A advisors like iMerge can provide curated insights from these databases during exit planning engagements.

3. Industry Surveys and Benchmarks

Annual surveys such as the KeyBanc Capital Markets SaaS Survey and OpenView’s SaaS Benchmarks offer anonymized data from hundreds of private SaaS companies. These are particularly useful for benchmarking against similarly sized peers.

4. Comparable Exit Case Studies

Analyzing recent exits of companies similar in size, vertical, and business model is one of the most effective ways to benchmark. For example, if your company is a vertical SaaS platform serving healthcare providers with $10M ARR and 30% YoY growth, look for exits in the same niche with similar scale and growth dynamics.

Firms like iMerge often maintain proprietary databases of such transactions, including anonymized deal terms and metrics, which can be invaluable during the pre-market phase.

How to Interpret the Benchmarks

Benchmarking is not about hitting every metric perfectly—it’s about understanding where you stand and how that positioning affects valuation. Here’s how to interpret your results:

Above Benchmark: Use this to justify premium valuation multiples or favorable deal terms.
At Benchmark: You’re in line with market expectations—focus on packaging your story and reducing risk.
Below Benchmark: Consider whether to delay your exit to improve metrics, or adjust valuation expectations accordingly.

For example, if your CAC payback period is 24 months while the benchmark is 12–18 months, buyers may view your go-to-market efficiency as a concern. However, if your NRR is 130%—well above the 110% benchmark—you may still command a strong multiple.

Case Example: Benchmarking in Action

Consider a mid-market SaaS company with $8M ARR, 35% YoY growth, 85% gross margins, and 105% NRR. The founder is considering a sale and wants to understand valuation potential.

After benchmarking against recent exits in the $5M–$15M ARR range, the company finds that:

Median growth is 30%—they’re slightly above
Median NRR is 110%—they’re slightly below
Median EV/ARR multiple is 5.5x

Given their strong growth and margins but slightly weaker NRR, the company may expect a 5.0x–5.5x ARR multiple. With guidance from an M&A advisor, they can position the business to highlight strengths and mitigate concerns—perhaps by showcasing customer expansion initiatives or cohort retention data.

This type of analysis is often part of a broader exit business planning strategy that iMerge helps founders develop well before going to market.

Common Benchmarking Pitfalls to Avoid

Over-relying on public comps: Public SaaS companies often have scale, brand, and capital advantages that skew metrics upward.
Ignoring business model differences: Usage-based pricing, freemium models, and vertical SaaS all have different benchmarks.
Focusing only on ARR: Buyers care about quality of revenue, not just quantity. Churn, margin, and retention matter.
Benchmarking too late: Waiting until you’re in-market to benchmark limits your ability to improve metrics pre-sale.

How iMerge Helps Founders Benchmark and Prepare

At iMerge, we work with SaaS founders to benchmark their metrics against relevant exit comps, identify valuation drivers, and prepare for a successful transaction. This includes:

Custom benchmarking reports based on private and public data
Valuation modeling using real-world M&A comps
Strategic positioning to highlight strengths and mitigate weaknesses
Pre-market preparation to optimize metrics before going to buyers

As we’ve discussed in SaaS Key Performance Metrics (KPIs) and Valuation Multiples, understanding your metrics in context is one of the most powerful tools you have when entering the M&A process.

Conclusion

Benchmarking your SaaS metrics against other exits is not just a valuation exercise—it’s a strategic imperative. It informs how you position your company, when you go to market, and what kind of buyers you attract. With the right data and guidance, you can turn benchmarking into a competitive advantage.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.