How to Sell a Tech or SaaS Business
SaaS and technology businesses achieve the highest EBITDA multiples in the UK SME market — 5.0–9.0× — because recurring revenue, scalability, and defensible technology create exceptional investment characteristics. Buyers range from strategic trade acquirers seeking product or customer base expansion to private equity and individual acquirers attracted to predictable cash flows. The metrics that matter most are monthly churn, ARR growth rate, and LTV:CAC ratio.
Who Buys Tech / SaaS Businesses?
Trade buyers include larger software companies seeking to acquire a product, customer base, or technical team (acqui-hire). Private equity is very active in the SaaS sector for businesses with EBITDA above £500k and strong ARR growth. Search fund acquirers and individual operators are increasingly active in the £500k–£2M EBITDA range, attracted by the scalability of SaaS models. International buyers (US, European) are a meaningful source of demand for UK software businesses with defensible niches.
What Drives Value in a Tech / SaaS Sale
Monthly churn below 3% (annual retention above 90%) is the single most important metric — it demonstrates product stickiness and sustainable unit economics. ARR growth of 20%+ year-on-year significantly lifts multiples. A diversified customer base (no single customer >10% of ARR) reduces concentration risk. Clean, well-documented code on modern cloud infrastructure reduces technical due diligence risk. Proprietary IP and switching costs (integrations, data lock-in) create defensibility. A development team that can operate without the founder is essential.
Common Due Diligence Concerns
Technical due diligence is uniquely intensive for SaaS businesses — buyers will commission code reviews, architecture assessments, and security audits. High monthly churn (above 8%) is the most common deal-killer, as it calls into question product-market fit. Founder dependency on product development creates transition risk; buyers want a CTO or senior developer in place. Customer concentration in a small number of enterprise accounts adds fragility. Deferred revenue treatment and working capital adjustments at completion can be complex and contentious.
Typical Sale Timeline
A tech / saas business typically takes 4–8 months to sell from preparation to completion.
What Is a Tech / SaaS Business Worth?
EBITDA multiples for tech / saas businesses in the UK range from 5.0–9.0×. See our full Tech / SaaS valuation guide.