The End of Organic Scaling as Legacy SaaS Companies Lag the AI-Native Insurgents
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Organic growth is no longer sufficient for SaaS companies, which are now resorting to high-value acquisitions to scale revenue. ServiceNow's recent $7.75 billion acquisition of Armis, at a 23x ARR multiple, exemplifies this trend, leading to an 11.6% drop in its share price. This acquisition is significantly larger than previous ones, indicating a shift in the SaaS landscape, as discussed with a Senior Partner at a major Growth Equity fund, marking the end of the "Imperial Phase" for legacy SaaS companies.
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