Valuing a Technology business
Technology companies are among the best-valued in the market: their ability to scale without ballooning costs, together with recurring revenue, justifies above-average multiples. But "technology" covers everything from a consultancy that bills by the hour to a SaaS product, and each model is valued very differently.
Technology sector EBITDA multiples
| Low | Typical | High | |
|---|---|---|---|
| EBITDA multiple | 5,5x | 7,4x | 10,0x |
Source: Dealsuite Southern European M&A Monitor H1-2025 · Period: H1 2025
Worked example
A business in this sector with EBITDA of €800,000 would have an indicative valuation between €4,400,000 and €8,000,000, applying the sector multiple range.
Example EBITDA
€800,000
Indicative valuation
€4,400,000 – €8,000,000
Illustrative calculation based on sector multiples. The real valuation depends on many other factors specific to your company.
What drives the value of a Technology business
In technology, the buyer isn't paying for your assets —you barely have any— but for the quality of your revenue and how dependent the business is on the founding team. A company with recurring revenue, low customer churn and documented processes that run without its partners sits at the top of the range. By contrast, if your turnover relies on one-off projects or on two clients that account for 60% of sales, the multiple drops sharply. Talent is both the asset and the risk: a buyer discounts the scenario in which your best engineers walk out after the deal.
What raises and lowers the multiple
Raise the valuation
- Recurring revenue (subscriptions, maintenance, multi-year contracts)
- A diversified client base with low churn
- Intellectual property or a proprietary product, not just billable hours
- A team and processes that run without depending on the founders
Lower the valuation
- Revenue from one-off projects with no recurrence
- Concentration: a few clients account for most of the turnover
- Total dependence on the founder to sell or deliver
- High technical debt or obsolete technology
Frequently asked questions
- Why are technology companies valued above average?
- Because they scale without costs growing at the same pace and they usually have recurring revenue. A buyer pays more for a predictable revenue stream with growing margins than for one that depends on winning every project from scratch.
- Is an IT consultancy valued the same as a SaaS product?
- No. A consultancy that bills by the hour looks more like a services business (lower multiples), whereas a SaaS product with recurring subscriptions reaches the top of the range, and may even be valued on revenue rather than on EBITDA.
- How does founder dependence affect value?
- A great deal. If the company can't operate or sell without you, the buyer takes on a high risk and either discounts it from the price or ties it to an earn-out. Documenting processes and building an autonomous team before you sell directly raises the valuation.
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