Role of AI in M&A value

Juan Ignacio Garcia Braschi is a partner at L40, a boutique SaaS M&A advisory firm with offices in Madrid, Lisbon, and Miami. After two decades in banking, private equity, and operating roles, including serving as CFO of ride-hailing company Cabify, he now helps SaaS founders sell companies typically valued between $20M and $200M.

L40 works primarily with B2B SaaS companies doing $5M–$50M ARR, most of them bootstrapped or lightly funded, including companies in Europe and Latin America. Juan explains how today's buyers evaluate SaaS companies, why Rule-of-40 performance still matters even with AI, and how growth rate, retention, and profitability determine valuation ranges of roughly 4–8x ARR.

Key Takeaways

• Growth Drives Valuation: Growth rate correlates most strongly with SaaS multiples. Companies growing 50% command much higher valuations than those growing 20%.
• Rule Of 40 Still Matters: Buyers increasingly expect SaaS companies to combine strong growth with some profitability.
• Financial Buyers Dominant: Private-equity-backed platforms acquiring add-ons are the most active buyers for $50M–$100M SaaS companies today.
• Sell During Momentum: Smaller companies growing 20–40% annually can be an ideal window for acquisition before growth naturally slows.

Quote from Juan Ignacio Garcia Braschi, Managing Director and Partner at L40

"If you think that you're going to sell your SaaS company, you should think of that two years ahead of when you want to sell. So don't wait until you're burned out.

"Keep in mind that you will have to make a profit at some point to sell to serious financial buyers. So when your company is growing at decent 20, 30, 40% year over year rates, that's probably the sweet spot for selling.

"Significant funds have been raised in the past 24 months and that has to be deployed. Traditional private equity firms are more more interested in tech. These days you see more and more traditional private equity firms going into tech and that's increasing competition and driving multiples up."

Links

• Juan Ignacio Garcia Braschi on LinkedIn
• L40 on LinkedIn
• L40 website

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