We have updated our monthly SaaS ARR Multiple Index until the end of June 2023 in accordance with our methodology. As shown in the picture above, we observe that the Danish SaaS median ARR multiple declined to 4.1x ARR, reaching a new low level. On the other hand, the SaaS Capital Index, covering larger global US-listed SaaS companies, increased significantly to 7.1x ARR by the end of June (from 6.5x ARR by the end of May). As usual, we also track the movements in the US 10Y bond yield, as this has a significant impact on the valuation of growth stocks, including SaaS stocks. The bond yield increased to approx. 3.84% by the end of June (from approx. 3.65% by the end of May). For perspective, the most recent top in the bond yield was in October 2022, when the US 10Y bond yield exceeded 4.20% and the stock market (S&P 500) bottomed out. 

Takeover offer on First North listed company
Looking into the recent Danish SaaS sector news, including some news from July, we have seen a takeover offer on the First North listed company, Digizuite, which provides Digital Asset Management (DAM) software for companies that streamlines all digital content in one central platform. In our latest SaaS report from May (read here), we also shed light on takeover possibilities, as many SaaS companies are takeover candidates under the current valuation levels. The offer price is DKK 8.73 per share, which constitutes a premium of 37% compared to Digizuite’s closing price the trading day before the offer. Moreover, the offer price per share is the same as the initial IPO price of Digizuite from May 2021. The offer price corresponds to an equity value of DKK 303m, valuing Digizuite to an ARR multiple of 6.9x ARR based on Digizuite’s total ARR of approx. DKK 44.0m on 30 June 2023. Currently, this is approx. 68% above the median ARR multiple in the Danish sector (based on the companies’ market values on 30 June 2023 and their latest reported ARR). The offeror is Luxion Group (controlled by its founders and by funds managed by GRO Capital, which is a private equity fund, specializing in mid-sized B2B software companies). Luxion is a global leader of product design rendering software with offices in the US and Denmark.  

Positive first Danish SaaS trading updates for H1 2023
A few Danish SaaS companies have announced a trading update with key figures for Q2/H1 2023. OrderYOYO continued its strong performance in Q2 2023 with 47% ARR growth and a significant improvement in EBITDA for H1 2023. As a result, OrderYOYO raised its 2023 financial guidance again on both December 2023 annualized ARR, net revenue, and EBITDA before other extraordinary items. You can watch a short management video on OrderYOYO’s H1 performance and guidance upgrade here.    

RISMA has also reported an H1 trading update, closing the first half year of 2023 with a 55% YoY ARR growth. The company also confirmed its full-year ARR 2023 guidance of DKK 34-38m. The full-year EBITDA guidance for 2023 was upgraded at the beginning of July 2023 to the range of DKK -7.5m to DKK -9.5m (from DKK -9m to DKK -13m).

In our next SaaS update for July, we will look more into trading updates and Q2/H1 reports from some of the global cloud and SaaS companies to track recent tendencies. Most Danish SaaS companies will report their H1 report during August 2023, and we look forward to hosting events with the management of some SaaS companies and covering the recent development.

Disclaimer: HC Andersen Capital receives payment from some of the mentioned SaaS companies (Agillic, Impero, MapsPeople, OrderYOYO, and Penneo) for a Digital IR/Corporate Visibility subscription agreement. /Kasper Lihn 14:25, 26 July 2023.