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Growth in ARR Multiple Since the Previous Raise

What is Growth in ARR Multiple Since the Previous Raise?

Growth in ARR Multiple Since the Previous Raise measures how much a company’s ARR Multiple has grown since the previous round of capital funding. ARR Multiple is the ratio between ARR and a company’s valuation.

How to calculate Growth in ARR Multiple Since the Previous Raise

ƒ Sum(ARR Multiple Since Previous Raise) / Sum(ARR Multiple Before Previous Raise) - 1

Example

Based on historical data, you determine that your ARR Multiple was 5X before your raised your previous round of funding. Since then, your ARR Multiple has increased to 8X, so your ARR Multiple growth since the previous raise is 60%.

More about this metric

ARR Multiple is calculated by dividing a company’s valuation by Annual Recurring Revenue (ARR). It is used to determine the strength or influence of revenue on a company’s valuation. For this number to grow after raising funding, companies must generally grow in value as well as ARR, indicating growth in a positive direction.

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