---
title: "The Growth Premium Persists in SaaS Valuations"
description: "Public SaaS multiples have stayed in a narrow band since 2022. AI \u0026 non-AI companies trade at similar valuations despite different pricing rules. The growth premium persists in private markets where hyper-growth unicorns command premium valuations."
categories: ["SaaS","Valuations"]
keywords: ["SaaS valuations","revenue multiples","AI companies","growth premium","public SaaS","private markets","hyper-growth","IPO","software valuations","venture capital"]
ai_summary: "Despite AI \u0026 non-AI SaaS companies being valued differently, both trade in the same 4-6x multiple band since 2022. The growth premium persists in private markets where tens of unicorns maintain multiples-higher growth rates."
date: 2025-10-27
lastmod: 2026-07-23
canonical_url: https://www.tomtunguz.com/2025-10-27-growth-premium-multiples/
author: "Tomasz Tunguz"
---


As the world follows every whisper & rumor from AI, what has happened to public SaaS?
{{< email_image src="uy0gvmixokyvsmlhdnm3" alt="Forward Revenue Multiples by Quartile" width="540" height="304" >}}

The answer is not much! All the fun is in the private markets.

Multiples haven't moved outside of a narrow band since the post-Covid crash in 2022.

{{< email_image src="tywekqgkit39sc5dsqlt" alt="AI & Non-AI Software Companies Valued Differently" width="540" height="304" >}}

Even here, AI is the story, with AI SaaS companies seeing different valuation correlates : revenue growth. Meanwhile, non-AI SaaS companies are valued more broadly with efficiency metrics included.

The scarcity of hyper-growth companies in 2025 tells its own story. Public SaaS companies have matured. The median company in our dataset grows at 13.7% annually, with a median multiple of 5.5x.

{{< email_image src="tphm2byrn563qkjm3iul" alt="Revenue Growth Distribution Across SaaS Companies" width="540" height="304" >}}

Most companies cluster near the median, with a few outliers driving exceptional growth rates. The distribution shows a steep drop-off from the top performers & a cluster of shrinking businesses.

The private market contains tens of unicorns with growth rates multiple times higher in both AI & classic SaaS. At some point soon, the largest AI companies' capital requirements will push them to IPO.

At that point, the data will look very different!