Technology Company Valuation
29 valuation methods · 43 industries · Results in under 10 minutes
In short
Technology companies are valued on the model their revenue calls for: subscription software on its recurring revenue, marketplaces on the share of transaction value they keep, and licensed software with licenses and maintenance valued separately. IT services and media businesses are valued on their earnings; for a smaller IT services firm whose revenue is not all recurring, that means mainly seller's discretionary earnings.
How businesses in this sector are valued
VA picks the model from how the company earns. Subscription and usage-based software is valued on its recurring revenue and how that revenue grows and renews. On-premise software is split into new licenses and maintenance, which are valued separately because maintenance repeats and licenses do not. Marketplaces are valued on their take rate, the share of transaction value they keep, rather than on the gross value that passes through them. A smaller managed IT services firm whose revenue is not all recurring is valued mainly on seller's discretionary earnings, EBITDA plus the owner's pay, times a multiple drawn from small-business transaction data. Other IT services firms are valued on a discounted cash flow, comparable companies, precedent transactions and a bottom-up view of their economics, and ad-supported media on a discounted cash flow, comparable companies and precedent transactions. Each result is checked against the same market evidence.
Guides in this sector
Subscription SaaS
Value a subscription SaaS business using ARR multiples, Rule of 40, and DCF. Benchmarked against public SaaS comps. Reports.
Usage-Based AI
Value a usage-based AI or API-first business using revenue multiples, NRR, and DCF. AI-specific benchmarks included. Reports.
On-Prem Software
Value a perpetual license or on-premise software business using maintenance ARR, EBITDA multiples, and migration optionality. Reports.
IT Managed Services
Value a managed service provider on its earnings, with monthly contracts, client retention and the owner's role read the way buyers read them.
Cloud Consulting
Value a cloud consulting or migration firm on its earnings, with partner status, recurring managed services and utilization read the way buyers read them.
Cybersecurity Services
Value a managed security or cybersecurity consulting firm on its earnings, with monitoring contracts, analysts and certifications read as buyers do.
ERP and CRM Implementation
Value an ERP, CRM or other software implementation partner on its earnings, with vendor status, support contracts and utilization read as buyers do.
IT Consulting
Value an IT consulting or technology services firm on its earnings, with client relationships, utilization and recurring work read as buyers do.
B2B Marketplace
Value a B2B marketplace or procurement platform using GMV multiples, take rate, and revenue growth benchmarks. Reports.
Consumer Marketplace
Value a consumer marketplace or platform business using GMV multiples, take rate, and engagement benchmarks. Reports.
Ad-Supported Media
Value a publisher, newsletter, podcast or content site funded by advertising on its earnings, with audience, traffic sources and ad mix read as buyers do.
Value your business in under 10 minutes
- 1.Upload your financial statements, or type the figures in.
- 2.Confirm the add-backs and the industry details the model asks for.
- 3.Get a valuation range, the methods behind it and a PDF memorandum.
Further reading
How SaaS Businesses Are Valued: Metrics That Matter
SaaS companies are valued differently than traditional businesses. Learn which metrics drive SaaS valuations, what multiples to expect, and how to prepare your business for a sale.
Is a Business Worth 3 Times Profit? When It Is 2x, When It Is 5x, and Which Profit Counts
Is a business worth 3 times profit? Often, if the profit is SDE. When 2x or 5x applies instead, which profit counts, and what diligence does to the price.
How Much Is a Business Worth With $500,000 in Sales? The Revenue Ladder From $100K to $3 Million
Revenue does not set a price, earnings do. See what businesses at $100K, $200K, $300K, $500K, $1M, $2M and $3M in sales are worth at 10%, 20% and 30% margins.
Frequently asked questions
How is a SaaS company valued?
On its recurring revenue: how much there is, how fast it grows and how much of it customers renew. VA's subscription model values that revenue directly and checks the result against a discounted cash flow, comparable companies and precedent transactions.
How is a marketplace valued?
On the revenue it keeps, not on the total value of the transactions it handles. The take rate, the share of each transaction the marketplace keeps, is what turns gross volume into revenue a buyer can value.
How is a managed IT services company valued?
On its earnings. A smaller firm whose revenue mixes monthly contracts with project work is valued mainly on seller's discretionary earnings times a multiple drawn from small-business transaction data. A larger firm, or one whose revenue is all recurring, is valued on a discounted cash flow, comparable companies, precedent transactions and a bottom-up view.
How is on-premise software valued?
License sales and maintenance are valued separately. Maintenance repeats each year and holds its value, while license sales depend on winning new deals.
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How solar, wind and storage projects, regulated utilities, data centers, mines and environmental services companies are valued, each on its own model.
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How aerospace and defense manufacturers, space hardware makers and government services contractors are valued, and what moves the value.
Last reviewed September 25, 2026 against VA's valuation models.