Growth in ARR Multiple Since the Previous Raise

Date created: Oct 12, 2022  •   Last updated: Oct 12, 2022

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.

Growth in ARR Multiple Since the Previous Raise Formula

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

How to calculate Growth in ARR Multiple Since the Previous Raise

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%.

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How to visualize Growth in ARR Multiple Since the Previous Raise?

It is best to visualize growth metrics with line charts. Use a line chart to track your growth in ARR multiple since the previous raise - perhaps adding notes indicating the details of the raise. This will let you quickly and easily see how raised capital has had an impact on your ARR multiple. Take a look at the example:

Growth in ARR Multiple Since the Previous Raise visualization example

Growth in ARR Multiple Since the Previous Raise

Line Chart

Here's an example of how to visualize your Growth in ARR Multiple Since the Previous Raise data in a line chart over time.
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Growth in ARR Multiple Since the Previous Raise

Chart

Measuring Growth in ARR Multiple Since the Previous Raise

More about Growth in ARR Multiple Since the Previous Raise

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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