---
title: "What the $6B Coupa Acquisition Means for Software Startups"
description: "Analyze Coupa's $6.2B PE acquisition: 8.4x revenue multiple, 31% premium signals SaaS valuations upside. Key metrics reveal PE's focus on cash flow vs growth."
categories: ["exits","financials","SaaS"]
keywords: ["Coupa acquisition","Thoma Bravo","SaaS valuations","private equity","venture capital","M\u0026A market","software startups","revenue multiples","cash flow analysis","Tomasz Tunguz"]
ai_summary: "The $6.2B Coupa acquisition signals potential growth in SaaS valuations and highlights private equity interest in software startups."
date: 2022-12-12
lastmod: 2026-07-27
canonical_url: https://www.tomtunguz.com/coupa-thoma/
author: "Tomasz Tunguz"
---

This morning, [Coupa announced its sale to Thoma Bravo for $6.2b](https://www.reuters.com/markets/deals/thoma-bravo-buy-coupa-software-615-billion-2022-12-12/). The acquisition is notable for three reasons. 

First, the premium to the public price is 31%. 

Second, the multiple is 8.4x NTM revenues. 

Both of these data points imply public multiples have room to grow. 

Third, it's the most substantive acquisition to announce this year [after Figma's announced its sale to Adobe](https://tomtunguz.com/figma-acquisition/). The M&A market may be thawing a bit.

| Metric | LTM Value | Average Software Public Value | 
| ---    | ---: | ---:| 
| Revenue, $m | 787 | n/a  | 
| Revenue growth | 22% | 31% | 
| Gross margin | 60% | 72% | 
| Net income margin | -44% | -19% |  
| Cash flow margin | 22% | 10% | 


Comparing it to other public SaaS companies, Coupa grows revenue 9 percentage points more slowly, operates with lesser gross margin of about 12 percentage points, generates twice the loss as a fraction of revenue, but produces twice the cash flow from operations as a percentage of revenue.

The cash flow appeals to private equity because those dollars pay off interest for the leveraged buyout's debt. Also, strong cash flows indicate a healthy underlying business despite slower-than-average growth & less-than-average profits. 

| Segment | Forward Multiple | Growth Rate | 
| --- | ---: | ---: | 
| Coupa | 8.4x | 22% | 
| Avg. SaaS | 6.0x | 31%  | 

[As Michael Mauboussin writes in Expectations Investing](https://tomtunguz.com/expectations-investing/), there's information in price. 

Coupa's 8.4x forward multiple, the premium paid to sell the business, is the output of a bidding battle between Vista Equity & Thoma Bravo. That data point means at 8.4x forward multiple for a company growing 22%, there's still enough upside to justify a 3x return to a private buyer with active management. 

Were the average public SaaS company to trade at the same growth-adjusted multiple as Coupa, the typical multiple would be 11.8x, nearly doubling from today's marks. (This simple math ignores other financial aspects of a business : profitability, cash flow, etc.)

Coupa's sale continues a trend of [private equity buying venture backed startups](https://tomtunguz.com/pe-vc-2022/), a result of record PE fundraising & depressed multiples. 

Startups should expect more private equity M&A both in the public & private markets. Over time, the M&A market activity should begin to inform public valuations. If private buyers are willing to pay premiums above the public market, then overall market multiples should rise.