The biggest news in SaaS came at the tail end of the month when cloud giant Salesforce indicated it was in talks to buy collaboration leader Slack, driving Slack’s share price up a whopping 64% by the close of November. For exactly zero of you who are not aware, SPOILER ALERT: the deal went through in early December to the tune of $27.7B — the largest acquisition for Salesforce by far. Pundits seem to believe this acquisition will position Salesforce as a more potent competitor to Microsoft and Microsoft Teams.
In aggregate, SaaS public companies had a killer month. The S&P 500 index climbed 10.75% driven by valuations like Snowflake, Shopify, and Atlassian (to call out just a few of the world’s best-capitalized SaaS companies). There is quite a lot of (ongoing) discussion about why SaaS companies support such high valuations; I found this gem from TechCrunch May 2020 to be an informative, straightforward, and pleasantly entertaining read.
Digging a bit deeper into why SaaS companies are so highly valued, part of that valuation has of course to do with growth. Is this about a handful of outlier B2B companies or the segment in aggregate? I’m glad you asked, because I stumbled on Patrick Campbell, CEO of Profitwell, and now his Twitter feed is part of my morning reading and roundup routine. Protfitwell tracks B2B SaaS metrics (among other things), and in this Twitter thread Campbell takes a #datadriven look at the impact of COVID on the B2B SaaS space, concluding, “… COVID didn’t do squat to most of B2B.” Hats off to Profitwell for showing us what data-to-insights should look like.
So, those are some of the highlights for me this past month. Would love to hear what caught your attention and why.