Buying a SaaS Business in the UK
SaaS valuations look simple from the ARR multiple. The quality of that revenue is what separates a good deal from a trap.
Last updated March 2026. 11 min read.
ARR and revenue quality
Insist on read-only access to billing (Stripe, Chargebee, etc.) and the CRM. Separate recurring from one-off implementation fees. Buyers pay higher multiples for net revenue retention above 100% and logo churn below 5% annually on SMB SaaS.
- Monthly recurring revenue bridge for the last 24 months
- Logo churn and revenue churn calculated consistently
- Concentration: any customer above 10% of ARR is a risk flag
- Contracted vs month-to-month split
Typical UK SaaS multiples
Sub-£1m ARR UK SaaS often trades between 2x and 5x ARR depending on growth, churn and owner dependency. Profitable, slow-growth tools sit at the lower end. Niche vertical software with low churn commands the top of the range.
Technical due diligence
- Stack audit: hosting costs, third-party dependencies and licence transfers
- Security basics: SSO, encryption at rest, penetration test history
- Single points of failure in the codebase or key developer
- GDPR data processing agreements with subprocessors
Team and customer success
Founder-led sales and support do not scale on day one. Map who owns product, engineering and customer onboarding. Retention bonuses for key staff through completion are common in SaaS deals.
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