SaaS companies have outperformed the market as a whole, with valuations still extremely strong even after a correction in recent months. The sector has seen a surge of SaaS IPOs in the last decade, driven by its steady stream of recurring revenue and strong growth prospects relative to traditional software companies. Public SaaS companies tend to have higher valuations than on-premise software providers, with median revenue multiples ranging from 5.1x for on-premise companies growing at 30-40% to 9.2x for SaaS companies at the same growth rate. Investors focus more on growth than profitability, and fast-growing companies are rewarded with rich valuation multiples. Successful SaaS companies often have triple-digit revenue growth in the years leading up to an IPO, with sales and marketing being a significant component of spending. The time it takes for a SaaS company to go public can be almost 10 years from founding, with some companies taking as long as 14 years to reach IPO readiness.