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The average valuation of a software company at IPO informs all valuations from pre-seed to Series F. The reason being that “the prize” for companies reaching growth goals and getting to “the next level” is the valuation at the IPO.

At 7.4x revenue 2022 valuations are still a higher than the long-term trend around 5x. Exactly where the average valuation should be is as much driven by the companies going public as “what’s the historical”. If today’s companies are growing faster and are more profitable, they should have a premium valuation compared to historic numbers.