HCA SaaS Update September: Accelerating interest rates challenge SaaS valuations

September was tough for the stock markets, especially for SaaS and other interest-rate-sensitive growth companies.

I am not a macroeconomist but with a 10Y US bond yield accelerating to the highest level since 2007, the macro headwind has continued longer than many first anticipated. The uncertainty has depressed the Danish-listed SaaS stocks, while some of the larger US-listed SaaS stocks have been more resilient, implying that the valuation gap between the US and Danish SaaS stocks is now relatively large (6.7x ARR in the US vs. 3.3x ARR in Denmark).

The main explanation is that the Danish-listed SaaS companies are smaller and, in general, have larger risks due to their earlier stages in life cycles and less liquidity in the shares. Moreover, a larger part of US-listed SaaS companies has been positively affected by the recent AI boom. In the newsletter, we also take a look into the first US SaaS IPO in approx. two years, Klaviyo. To read more, click the button below.

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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 12:40, 9 October 2023.