As Alphabet crests the $1T mark, SaaS stocks reach all-time highs of their own
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As Alphabet crests the $1T mark, SaaS stocks reach all-time highs of their own
Continuing our irregular surveys of the public markets, two things happened this week that are worth our time. First, a third domestic technology company - Alphabet - passed the $1 trillion market capitalization threshold. And, second, software as a service (SaaS) stocks reached record highs on the public markets after retreating over last summer.
The two milestones, only modestly related events, indicate how temperate the public waters are for technology companies today, a fact that should extend warmth into the private market where startups, and their venture capital backers, work.
The happenings are good news for technology startups for a number of reasons, including that major tech players have never had as much wealth in hand with which to buy smaller companies, and strong SaaS valuations help both smaller startups fundraise, and their larger brethren possibly exit.
Indeed, the stridently good valuations that major tech companies and their smaller siblings enjoy today should be just the sort of market conditions under which unicorns want to debut. We'll continue to make this point so long as the public markets continue to rise, pricing tech companies that have already floated higher like the cliche's own tide.
How many unicorns will exit before the market turns?
But while Alphabet, Microsoft and Apple are worth $3.68 trillion as a trio, and SaaS stocks are now worth 12.3x times their revenue (using enterprise value instead of market cap, for those keeping score at home), not every private, venture-backed company will necessarily benefit from public investor largesse.
What about tech-ish startups?
How much the current public-market tech valuation expan