Meritech 2024 Market Update (AGM Market Section, External)
| Author | Alex Clayton (Meritech Capital) |
|---|---|
| Published | 2024 |
| Format | Report |
| Original | Read the original |
TL;DR — Meritech’s 2024 annual-meeting market deck: public SaaS is cheap and slow-growing, late-stage funding is back but exits are scarce, and AI could make software far bigger.
The deck, presented by Alex Clayton with data as of October 14, 2024, runs in three parts. Public markets: the S&P 500 sits near peak levels, but the gain is concentrated in a handful of mostly tech and “AI” names. Public SaaS saw its worst multiple compression since 2008 in 2022 (57% peak to trough), the median company trades at 6.0x NTM revenue (26% below the pre-ZIRP level), growth has not re-accelerated, and the 2020–21 SaaS IPO cohort is down a median 40% from pricing. Against “Is SaaS dead?”, it argues the top 10 market leaders are larger and more valuable than ever.
Private markets and liquidity: venture funding has stabilised and is increasingly driven by AI (44% of new North American unicorns in 2024 year to date). Tech IPO counts are at a 15-year low, M&A is weighed down by antitrust, and nearly 1,000 North American unicorns minted since 2016 carry about $3.4T of last-round value — at roughly 40 tech IPOs a year, 25–30 years of listings. The deck expects many to become “zombies”, while an illustrative set of about 20 private market leaders (OpenAI, Stripe, SpaceX, Databricks, Anthropic and others) could return $600B+ to investors.
AI and the software opportunity: using ServiceNow’s before-and-after website and Adobe’s shift to cloud as case studies, it frames AI as a move from “Software-as-a-Service” to “Service-as-Software” — agents selling work rather than tools — which lets software reach into services spend. It closes that both incumbents (“gatekeepers”) and start-ups (“insurgents”) could win.
What it is: A growth-stage venture firm’s annual market review for its investors, which the firm then posted publicly. The charts are built from Capital IQ, PitchBook and other third-party data; the conclusions are Meritech’s views, and it names one of its own portfolio companies (Flock Safety) in the market-leader list.
Where this came from
- A copy shared on Google Drive.
- Published by Meritech on its Substack, “2024 Meritech Annual Meeting Market Insights” (October 31, 2024), which links this same Drive file as “the full slides”: https://meritech.substack.com/p/2024-meritech-annual-meeting-market
44 pages. A copy is archived locally against link rot; the header links the original source.