Whales and unicorns go hand-in-hand in the SaaS world

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People are often quick to question a startup that cashes out early, especially if ‌growth momentum is on its side. The underlying assumption is that fast-growing startups tend to be rewarded with lofty valuations.

While there is some merit to this argument, a peek beneath the surface will likely show that there is more to an exit than meets the eye. Supercharged growth doesn’t always guarantee massive profits, or even profitability.

Google’s acquisition of YouTube for US$1.7 billion in 2006 is an ideal example of a win-win situation through an early exit. It resulted in YouTube’s founders receiving a jaw-dropping payday and Google making the video-sharing platform an internet staple. YouTube raked in nearly US$20 billion in revenue for fiscal year 2020 alone, and that figure is only expected to grow.

Everything turned out rosy for all parties involved, but it could’ve easily gone downhill had the deal fallen through. YouTube was less than two years old at the time and was burning through cash quickly. There is a strong argument that the second largest search engine would’ve gone out of business without Google’s deep pockets.

Sometimes, the benefits that an exit through a merger offers are simply too great to turn down for a startup. Following this reasoning, we break down why AI-powered marketing platform Saleswhale opted for a successful exit through US-based unicorn 6Sense instead of going for its series B round.

Today we look at,

• Why Saleswhale sold its business to this SoftBank-backed unicorn
• South Korea-based Greenlabs nearing unicorn status after its latest funding round
• Other newsy highlights such as SPAC fever hitting Singapore and a webtoon developer’s mammoth funding round

Premium summary

A leviathan lurking in the SaaS ocean

Image credit: Timmy Loen

Saleswhale became the first Y Combinator-backed company in Singapore to be acquired after it agreed to a cash and stock deal with 6Sense. The acquisition follows the recent trend of consolidation in the global software-as-a-service (SaaS) market.

Interestingly, this deal is also the latest in the line of successful exits by Singapore-based SaaS companies. It comes after Stamped’s US$110 million acquisition by WeCommerce last year and Intuit’s US$80 million buyout of TradeGecko in 2020.

• The time was ripe: Saleswhale co-founder Gabriel Lim didn’t disclose the exact value of the deal, but he told Tech in Asia that the amount is in the low to mid-eight figure range in US dollars. The deal comes after 6Sense secured US$200 million in a series E fundraise, pushing its valuation to US$5.5 billion.

Harvesting a unicorn: nearing completion