#170: Why Most SaaS Acquirers Still Want Profitable Growth In 2025

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#170: Why Most SaaS Acquirers Still Want Profitable Growth in 2025 - Gaurav Bhasin

3d ago 1:05:00

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Gaurav Bhasin is the founder and managing director of Allied Advisers, an M&A advisory firm that has completed nearly 100 sell-side transactions for software and tech founders. After two decades in investment banking and tech M&A, Gaurav is a sell-side advisor to B2B software founders who have built real businesses who want to explore selling their companies.

Allied Advisers typically works with founders selling their businesses for $20M–$100M, helping them prepare materials, run a competitive process, and negotiate terms.

We discuss how today's M&A market looks very different from the 2021 bubble. Valuations have normalized, deal timelines have increased, and buyers are more disciplined. But the demand for profitable, steadily growing SaaS companies is stronger than ever.

Gaurav breaks down strategic vs private equity buyers, what metrics matter most, how AI influences valuations, and why most founders underestimate the emotional and operational effort required to sell. For practical founders thinking about an exit in the next few years, this episode offers clear expectations and tactical guidance.

Key Takeaways

Profitable Growth Wins — Buyers prefer SaaS companies growing 20–50% with real profits over faster revenue growth fueled by burn.
Metrics Drive Valuation — Net retention above 110%, gross retention above 90%, and >75% gross margins increase valuation and buyer interest.
Run a Real Process — A single buyer gives you no leverage. Multiple qualified buyers improve pricing, terms, and closing certainty..
AI Is Lipstick — But Real — You don't need to be AI-native. Practical AI that improves product, margin, or GTM still increases buyer interest.

This Interview Is Perfect For

Founders thinking about selling in the next 1–3 years
SaaS CEOs curious about valuations and buyer expectations
Bootstrapped founders considering partial or full exits
Anyone who wants to understand how private equity really works in SaaS

Quote from Gaurav Bhasin, founder and managing director of Allied Advisers

"The good news for SaaS founders is that the private equity community has raised about $1.5 trillion of capital, and more is being raised. And they also have the debt. So there's $7 trillion of dry powder to do deals. Private equity is not paid to sit on the cash. And they love recurring revenue software.

"Private equity investors will typically move much faster than strategic buyers. Strategics will take a while. You need a business unit sponsor to buy into the vision, then they will push the corporate to do the deal. But with the private equity, they will look at your financial metrics and if you fit in, they can move pretty fast.

"The one caveat with private equity compared to strategic is they generally pay a little bit less than the strategics because strategics have the GTM for higher growth, so private equity will index more on the financials."

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