The Fastest Growing Software Sectors in 2024
The fastest growing software category in the public markets is security. Data follows.
Security companies as a group average 29% expected revenue growth in 2024, compared to 23% for Data (or DaaS which stands for data-as-a-service). Fintech & SaaS (horizontal) average ten percentage points fewer expected growth.
Anticipation of this growth propels multiples. Security & data top the charts at on average 10x enterprise-value-to-forward-revenue, compared to 5x for the others.
These two software categories lead buyers’ priorities & are expected to grow at twice the pace of the overall software market.
Reviewing the data deeper, CrowdStrike, Palo Alto, SentinelOne, & ZScaler have seen significant multiple improvement. Only Okta lags a bit which is likely due to some of their internal security challenges.
For now, software buyers view security & data products as highest priority. As a result, these businesses project higher growth rates & fetch more attractive valuations in early 2024.
This dynamic will very likely cascade into the private markets as well with both acquisitions and financings in these categories priced at a premium.
Building something new
1 年Okta’s security challenges have started to become a mainstream conversation topic affecting their public market ticker trust
Co-Founder @ Pakana and Firm Solutions
1 年Data As A Service?
CEO Ibbaka Performance - Leader LinkedIn Design Thinking Group - Generative Pricing
1 年I would like to see the breakdown in vertical SaaS as some verticals are growing much faster than other. Our own data also shows that some verticals, including security, are seeing the market split with groups of high performers and laggards. I think we need a much better taxonomy for B2B software that what we currently have to work with and it would help to have more agreement on how to do this.
Author: When They Win, You Win; Speaker, Advisor, Coach.
1 年Adam M.
7-Figure Full-Stack Marketer | Scaling health & fitness offers around the world.
1 年Great post. Love seeing vertical SaaS in there, Tomasz.