In the world of software M&A, so much has been written about what buyers look for in SaaS businesses. ARR, MRR, NRR, CAC, the Rule of 40. It’s become the standard checklist. But here’s the thing:
Not every software company is a SaaS company.
And if yours isn’t, that doesn’t mean you’re doing it wrong. It just means you need to play a different game. We’ve worked with founders across IoT, CPaaS, deep tech, consumer software, applied AI, and vertical product companies with hybrid models. Many of these companies wouldn’t clear the typical “SaaS checklist” but they still sold for strategic multiples. Why?
Because the real value drivers looked nothing like subscription revenue.
In some cases, value is based on gross margin or profitability. In others, it’s about IP, defensibility, and talent. And occasionally, valuation has almost nothing to do with revenue at all. It’s about what a company enables for the buyer.
Take AI as an example. We’ve seen buyers pay $100M+ for early-stage teams, not because of their top-line revenue, but because of the strategic IP, data advantage, and core team. These are often acqui-hires in disguise, but they close at headline-making numbers that would make even seasoned SaaS founders blush.
It’s a reminder that in M&A, there’s more than one path to a premium outcome. If you’re an IoT business with strong margins and real deployment scale, you’re not going to be benchmarked on NRR. If you’re building applied AI with core IP and a clear data moat, ARR might not even be the primary lens. If you’re in CPaaS or embedded fintech, the buyer might be looking at volume throughput or margin on payment flow.
The key is positioning. When you understand what buyers are likely to value in your category, and when you stop trying to present your company as something it’s not, you unlock real leverage in a process.
We often say: Don’t try to fake SaaS. It doesn’t fool anyone. Worse, it might obscure your real strengths.
At Hemisphere, our role is to help founders get clear on what their business actually is, and then lean into that. That means guiding our clients through a strategic pricing discovery process that’s calibrated to their business model, not just the SaaS standard.