#745 · Startup Tool

SaaS Valuation Calculator

Estimate SaaS company valuation using ARR, revenue multiple, growth rate, and EBITDA margin. The calculator also shows a valuation range and Rule of 40 score for investor-style review.

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How to use this calculator

  • Enter current ARR and a revenue multiple.
  • Add growth rate and EBITDA margin to calculate Rule of 40.
  • Review the expected valuation range rather than relying on one exact number.

What the result means

The estimated valuation is based on ARR multiplied by the selected revenue multiple. Growth and profitability affect whether the multiple looks justified.

Valuation = ARR × Revenue Multiple. Rule of 40 = Growth Rate + EBITDA Margin.

This is not a formal appraisal. Market multiples can change quickly and depend on retention, growth quality, revenue concentration, and capital markets.

Example calculation

A SaaS company with $1,000,000 ARR and a 6x multiple has an estimated valuation of $6,000,000. If growth is 40% and EBITDA margin is 5%, Rule of 40 equals 45.

Tips for better results

  • Use ARR quality, retention, and growth consistency when selecting a multiple.
  • Run low, expected, and high valuation scenarios.
  • Improve Rule of 40 by increasing growth or profitability.

FAQ

How much is my SaaS business worth?

A quick estimate is ARR multiplied by a reasonable revenue multiple, then adjusted for growth, margin, retention, and risk.

What multiple do SaaS companies sell for?

SaaS revenue multiples vary by market, growth, retention, and profitability. Faster growing and more efficient companies usually command higher multiples.

How do investors value SaaS startups?

Investors often review ARR, growth rate, gross margin, net retention, churn, profitability, and comparable market multiples.

What is the Rule of 40?

Rule of 40 is growth rate plus profit margin. A score above 40 is often viewed as a strong balance between growth and efficiency.

What ARR is needed for a $10 million valuation?

Divide the target valuation by the assumed revenue multiple. At a 5x multiple, $10 million valuation requires about $2 million ARR.

SaaS Valuation Metrics

MetricMeaning
Estimated ValuationARR multiplied by revenue multiple
Rule of 40Growth plus EBITDA margin
Low / High RangeScenario range around selected multiple
Health ScoreValuation quality based on Rule of 40

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