SaaS IPO Prospects: A Boom for 2018 and Beyond

The software as a service (SaaS) market is showing steady growth according to market research firm IDC. This positive trend has led to numerous successful IPOs and the acquisition of several promising startups. As large companies like Adobe and Microsoft gain more financial freedom due to recent tax cuts, the prospects for SaaS IPOs in 2018 and beyond are looking particularly bright.

Insight into Current SaaS Market Trends

Several SaaS companies are not pursuing public offerings (IPOs) because they are receiving lucrative deals from larger tech giants. Companies such as Slack, Cloudflare, Smartsheet, and Qualtrics may not go public in the near future. Instead, they are likely to be acquired by bigger players in the industry, which could offer substantial growth opportunities.

Notwithstanding this trend, the number of mega acquisitions is on the rise. This is reflected in significant deals such as Dropbox's huge debut, Mulesoft's 6 billion dollar acquisition right after its IPO, and Okta's impressive IPO. Additionally, recent filing trends for companies like Zuora, Docusign, and Pluralsight further indicate a robust market environment. Despite a modest market pullback, the SaaS sector continues to perform exceptionally well.

Key Players on the Horizon

The market is teeming with strong SaaS players likely to file for their IPOs soon. Companies such as Qualtrics, Apttus, GitHub, SurveyMonkey, and Slack are poised to join the ranks of successful SaaS IPO companies. Their impressive ARR (Annual Recurring Revenue) figures, ranging from 150 million to 200 million, make them prime candidates for public offerings.

Furthermore, the strong performances of established SaaS companies like Atlassian, Coupa, and Twilio from 1 to 2 years ago have contributed to a renewed confidence in the market. Companies like HubSpot, Zendesk, Box, and RingCentral, which have publicly traded for a little longer, are now on paths to achieve $1 billion in ARR. This growth has led to these companies achieving valuations between 3 billion and 5 billion dollars. These developments provide a strong foundation for the continued success of SaaS IPOs.

Pluralsight Files for an IPO

One of the notable developments in the SaaS sector is the confidential filing for an IPO by Pluralsight, a Utah-based education software company. This move exemplifies the growing trend of SaaS companies seeking public listings.

The SaaS market appears to be experiencing its best period ever, with multiples not reaching an all-time high. Nonetheless, the current market conditions present a very favorable environment for SaaS companies to consider IPOs. As more companies look to capitalize on the favorable market conditions and secure funding, the prospects for SaaS IPOs in the coming years are looking exceptionally promising.