Goldman Sachs is in advanced discussions to significantly increase its investment in the enterprise software-as-a-service (SaaS) company MoEngage, with plans to invest $35-50 million through a secondary transaction. This move comes amid heightened activity in late-stage SaaS startups, with companies such as Whatfix, Innovaccer, Icertis, Atlan, and Rocketlane raising funds or finalizing rounds.
A source familiar with the matter stated, “Goldman has decided to buy shares from some of MoEngage’s early investors,” emphasizing that it is a fully secondary funding round. Despite a recalibration of SaaS funding valuation multiples over the past year, deal activity has increased. “The details are still being finalized, but there may be a discount to MoEngage’s last valuation for this Goldman investment,” the source added.
MoEngage, a Bengaluru-based marketing-focused SaaS firm, was last valued at $700 million following a $77 million funding round led by Goldman Sachs and B Capital in 2022. Goldman Sachs declined to comment, and MoEngage did not respond to an email inquiry by press time on Thursday.
Recently, the World Bank’s International Finance Corporation (IFC) disclosed plans to invest $20 million in healthcare-focused SaaS firm Innovaccer. The Economic Times first reported on May 2 about a larger funding round at Innovaccer, noting that US health and insurance giant Kaiser Permanente is in talks to lead the round. Additionally, private equity firm Warburg Pincus is set to lead a $100-150 million funding round in SaaS firm Whatfix. ET also reported on May 8 that SoftBank, an existing investor in Icertis, is expected to increase its investment in the firm.
Data collaboration software startup Atlan raised $105 million in fresh capital in May, led by Singapore’s sovereign wealth fund GIC and US-based venture investor Meritech Capital, nearly doubling the company’s valuation to $750 million.
These developments highlight the active deal-making in mid and large-scale software startups. “Most of the deals are being done through a mix of primary and secondary share sales, and instances like Innovaccer will see a blended valuation,” the source noted.
Founded in 2014 by Raviteja Dodda and Yashwanth Kumar, MoEngage has raised a total of $182 million in funding. Its investors include private equity firm Multiples, Matrix Partners India (renamed to Z47), and Eight Roads Ventures. Some of its clients are Flipkart, Policybazaar, Ola, Oyo, and Mamaearth.
In line with the broader readjustment in technology-led businesses globally, SaaS valuations based on revenue multiples have decreased significantly, according to industry executives. After record highs of up to 30 times revenue multiples seen in 2021, valuations have declined to 10-12 times. Bessemer Venture Partners’ Nasdaq emerging cloud index shows that SaaS company valuations are currently trending at an average of 6.7 times revenue.
SaaS investments saw a slowdown last year, with late-stage SaaS firms receiving $1.53 billion from private equity and venture capital funds in 2022, dropping to $421 million in 2023. For mid-stage companies, SaaS investments declined from $2.1 billion in 2022 to $920 million in 2023.
 company MoEngage, with plans to invest $35-50 million through a secondary transaction. This move comes amid heightened activity in late-stage SaaS startups, with companies such as Whatfix, Innovaccer, Icertis, Atlan, and Rocketlane raising funds or finalizing rounds.){kind=link}