Exclusive: Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates RiseView Now

Why ‘Battered’ SaaS Valuations Look Out of Touch With Reality

Valuations for publicly traded enterprise software companies such as Salesforce and Workday have plunged from pandemic-era peaks, thanks to rising interest rates and worries that customers will cut software budgets during an economic slowdown. But there are signs the sell-off has gone too far.

For the first time since at least 2019, the enterprise value of software as a service companies—compared to their expected annual revenue—has fallen below that of the broader tech sector, according to The Information’s analysis of public SaaS companies tracked by investor Meritech Capital. Salesforce and Workday are among the most depressed stocks, while Cloudflare and Snowflake have higher valuations because they have a track record of increasing revenue from existing customers.

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Andreessen-Backed Divvy Homes Lays Off 12% of Staff as Rates Rise
Adena Hefets, co-founder and chief operating officer of Divvy Homes Inc. Photo: Bloomberg
Divvy Homes, a property tech startup backed by Andreessen Horowitz and Tiger Global Management, laid off about 12% of its staff Tuesday. The cuts reflect how younger real estate firms are responding to rising mortgage rates that have battered the home-buying market. The layoffs affected roughly 40 employees at the five-year-old firm. Divvy Homes buys homes in the U.S. and rents them to people...
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