# SaaS Valuation Calculator

URL: https://www.paydude.io/resources/tools/saas-valuation-calculator
Type: Free interactive calculator
Summary: Estimate a SaaS valuation range from ARR, growth, net revenue retention and gross margin. Growth drives the multiple more than anything else.

Deliberately a range, not a number. Multiples move with growth, retention and market conditions, and a single figure here would be false precision — a valuation is set by a buyer, not by arithmetic.

## Summary

Growth rate is by far the largest driver of multiple. Net revenue retention is the second. Multiples move enormously with market conditions. This is an estimate, not a valuation.

## Multiples by growth rate

**Typical ARR multiples**

| Growth | Typical multiple |
| --- | --- |
| Under 10% | 2×–3× |
| 10–20% | 3×–4× |
| 20–40% | 4×–6× |
| 40–60% | 5×–8× |
| 60–100% | 7×–11× |
| Over 100% | 10×+ |

These bands move substantially with the market. In a downturn the whole table compresses; in a boom it expands. Treat the shape as durable and the absolute numbers as a snapshot.

## What moves the multiple

1. **Growth rate.** Dominant. It is why loss-making companies command higher multiples than profitable slow-growers.
2. **Net revenue retention.** Above 120% attracts a substantial premium — predictable revenue is worth more.
3. **Gross margin.** Below 70% signals a business with more cost of goods than a software company should have.
4. **Revenue concentration.** A customer worth 30% of revenue is a discount, not a strength.
5. **Churn.** High churn caps the multiple regardless of current growth.

> **What this cannot capture:** Market conditions, category, competitive position, team, code quality, customer concentration, contract structure and what one specific buyer happens to want. Real transactions vary widely around any modelled figure — treat this as a starting point for a conversation, not a price.

## Bootstrapped businesses price differently

Smaller profitable SaaS businesses are frequently valued on a multiple of profit rather than revenue — commonly 3×–5× annual profit on marketplaces, which is a very different number from an ARR multiple. If you are considering a sale below roughly $1M ARR, that is the relevant comparison.

**Margin improves the multiple too** Payment fees sit in gross margin, one of the inputs buyers check. — [See pricing](https://www.paydude.io/pricing)

## Frequently asked questions

### What multiple do SaaS companies sell for?

It depends overwhelmingly on growth. Under 10% growth typically fetches 2×–3× ARR; over 100% growth can exceed 10×. Market conditions shift the whole range considerably from year to year.

### Is my SaaS valued on revenue or profit?

Larger, faster-growing companies are usually valued on an ARR multiple. Smaller bootstrapped businesses are more often valued on profit, commonly 3×–5× annual profit. Below about $1M ARR, the profit multiple is usually the relevant one.

### How much does churn affect valuation?

Substantially, through two routes. High churn suppresses net revenue retention, which is a direct input, and it makes future revenue less predictable — which is precisely what a buyer is purchasing.

### Is this a real valuation?

No. It is a modelled range based on published multiple bands. A real valuation depends on market conditions, category, customer concentration, contracts, team and what a specific buyer wants. Use it to frame a conversation, not to set a price.