a16z's Deck Puts Horizontal Software at 2.7x Revenue. Buyers Hold the Edge

Andreessen Horowitz's growth team published its State of Markets II deck on September 30, and one chart in it shows how far a whole class of software has been repriced. Using J.P. Morgan Asset Management data as of August 20, the deck puts the median horizontal software company at 2.7 times trailing revenue in the first half of 2026. In 2020 it was 12.3x. Vertical software trades at 4.6x, security and identity at 6.8x, and cloud, data and AI infrastructure at 9.1x. Horizontal tools are the CRMs, project boards and collaboration suites sold to every department. They fell the furthest and now trade the lowest.

The same deck shows the other half of the squeeze. Drawing on SVB's State of the Markets data, it shows 26% of US venture-backed unicorns with less than a year of runway and another 29% with one to two years. That means 55% have under two years of cash. Fourty-two percent of those unicorns are growing 20% or less, and 15% are shrinking. Stripe payment data in the deck shows SaaS businesses less than a year old growing more than 500% year over year through 2026. Those older than a year bottomed near 19% around the turn of the year and have since recovered to about 24%.

A vendor at 2.7x revenue is a weaker counterparty, and Miro shows the risk

Most coverage reads these charts as an investor story about who raises next. For anyone buying software, they describe the company across the table. A public seller valued at 2.7x revenue answers to a board that has stopped paying for growth it can't defend, and a private vendor with 18 months of cash has a CFO who wants signed annual contracts more than full list price. Both conditions shift negotiating power toward the buyer. They also raise the odds that the tool you standardize on this year changes owners or pricing before the contract ends.

That risk already has a recent example. On September 10, Bending Spoons agreed to buy Miro, the whiteboard company with roughly $600 million in annual recurring revenue, for an enterprise value of $1.355 billion. The price works out to about 2.3 times ARR, for a horizontal product that gets nearly 90% of its revenue from business and enterprise customers. The deal came days after Bending Spoons closed its purchase of Airtable. The Next Web noted that the acquirer describes its playbook as reorganizing teams, rebuilding technology and improving monetization. Miro's customers didn't pick their new owner, and a new owner focused on monetization tends to show up first in the renewal quote.

The acquirer has since raised more money to keep buying. In an October 14 Form 6-K, Bending Spoons said Berkshire Hathaway agreed to buy 10 million shares at $33, about $330 million, and that it intends to use the net proceeds for general corporate purposes and "to invest in new acquisitions." The deal takes Berkshire's stake to 4% after the $600 million it put in at the July IPO, and Bending Spoons' head of business acquisitions said in the accompanying release that "our pipeline remains strong."

The counter-case worth taking seriously

The deck argues against reading any of this as a collapse. a16z calls 2026 a "prove it" market instead of a SaaSpocalypse. It says about 75% of public software companies are profitable, and it shows growth and operating leverage holding steady even as multiples fell. Most public horizontal vendors are in no danger of running out of money. For a buyer, the bigger risk is a take-private or an owner like Bending Spoons, since a shutdown is unlikely. The runway figure also covers unicorns in every category, beyond horizontal software. And the SVB chart doesn't say whether undrawn credit lines count as cash. The practical reading is narrower. A vendor's position three years into a contract is unlikely to match its position on the day the contract was signed.

Searches across LinkedIn, X and Reddit turned up no operator discussion of what the deck means for buyers. Our bet is that change-of-control protections and data-export terms become standard asks in horizontal software renewals over the next year. The vendors with the longest runways will be the first to concede them, because they can afford to.

What this means for software buyers

For a buyer, the first change is that vendor diligence moves ahead of the feature demo. Ask a private horizontal vendor how many months of runway it has and what happens to your contract if it's acquired. Ask a public one which parts of its revenue are still growing. A vendor that won't answer the runway question has told you something. Put that in the evaluation notes next to the security review.

Discounting follows from the same math. A vendor with under two years of cash values a signed, prepaid annual contract above list price. That gives a buyer room to trade upfront payment for a lower rate. A buyer can also trade a longer term for a price cap and termination rights that survive a change of control. Offer multi-year commitments only with those protections attached, because the term helps the seller's bookings more than it helps the buyer.

The last change is in how to read a horizontal vendor's pitch. Public investors value horizontal tools below vertical software and infrastructure because they expect features to be copied. The young SaaS companies, growing at 500% are the likeliest to do the copying. A horizontal seller still holds the data a customer has stored in it, plus the workflows built on top of that data. Investors still pay for that lock-in, it's what a buyer should price. Find out what export looks like, who owns the workflow definitions and what leaving would cost two years from now.

A vendor's position three years into a contract is unlikely to match its position on the day the contract was signed.

Ask private horizontal vendors how many months of runway they have, and offer multi-year commitments only with a price cap and termination rights that survive a change of control.

By Business of GTM