Welcoming Mahau Ma to Sapphire as an Operating Partner!

We are excited to welcome Mahau Ma to the Sapphire team as an Operating Partner focused on helping our portfolio companies with their GTM strategy! 👏

Mahau joins us from Sapphire portfolio company MuleSoft, the provider of a widely used platform for integration and API management. He served most recently as SVP of Corporate Strategy, and before that, as CMO. Mahau’s 14 years at MuleSoft spanned its very early stage (<1M in revenue), through multiple stages of scale to IPO at $300M revenues and beyond to its acquisition and integration as a $1B+ business unit of Salesforce.

As CMO and later SVP of Corporate Strategy at Mulesoft, Mahau drove and supported cross-functional initiatives involving go-to-market strategy, packaging and pricing strategy, product strategy, M&A, organizational strategy, and other business-critical marketing and strategic functions.

Previously, Mahau held various marketing and sales enablement positions at TIBCO Software. Earlier, Mahau spent some years in VC at Trinity Ventures and cut his teeth as a consultant at McKinsey & Company. Mahau graduated from Harvard University with an AB in Economics and now lives in sunny San Diego, where his husband and twin 6-year-old boys keep him on his toes.

His areas of support for portfolio companies will include:

  • Developing and codifying GTM strategy and playbooks
  • Marketing strategies and approaches
  • Positioning, messaging, and category creation
  • Packaging/pricing

We can’t wait to see how Mahau helps our portfolio companies refine their marketing strategies, execute on proven GTM strategies, and define differentiated branding and positioning that drive business growth.

If It Don’t Make Dollars, It Don’t Make Sense: Demystifying Interest Rates vs. Valuation for High-Growth SaaS

Over the last few months, as we began to help our portfolio companies reframe how they think about the goals of growth vs. longer-term cash generation, we came to believe there were few resources that simply and clearly explain how the different parts of a SaaS business come together to generate cash, and how multiple compression, revenue growth rates, and interest rates all ultimately impact how valuations are set. In this three-part series, our aim is to unpack the various components and drivers.

In Part I of this series, we look at how the reduction in equity values is tied to rising interest rates. We also explain the math that is driving the relative differences in value reduction for public tech companies. Parts II and III will apply some of these lessons to help inform private software companies and what it might take to achieve a premium valuation at scale.

Impact of Interest Rates

Over the last several years, we have often seen the public markets value revenue growth over cash generation. Multiples for high-growth companies have generally far outpaced slower growers. We believe this wasn’t just sentiment-driven investing, but rather the transition to growth-first from growth + cash flow that is largely backed-up by math we will explain below.

While many have seen an ostensibly higher quality of SaaS companies matriculate to the public markets in the last five years, much of the valuation expansion experienced was driven by low interest rates. Starting in late 2018, the yield on the 10-year Treasury – a proxy for investor sentiment regarding future interest rates – began falling. Around the same time, SaaS revenue multiples began accelerating.  

Because Treasury Bonds that are returning 1% won’t usually help an investor hit their return thresholds, investors most often seek assets that can generate higher returns – these assets came in the form of high-growth SaaS companies.

On the flip side, when Treasury yields began rising, particularly in late 2021 and early 2022, SaaS multiples began to fall. The relationship isn’t 1-to-1, but the correlation is strong.   

10-yr Treasury Yield vs. High Growth SaaS NTM Multiples

Dave Wilner_Featured Image

Welcome Dave Wilner to Sapphire!

We are thrilled to welcome Dave Wilner to the Sapphire team!  Dave joins us as a Operating Partner, both investing in and advising enterprise software companies, reinforcing our stated mission of partnering with and helping build companies of consequence.

Dave has an impressive track record of helping scale enterprise software companies in go-to-market leadership roles.  He joins us most recently from Auth0, a Sapphire portfolio company that certainly adheres to the ’company of consequence’ moniker.  As Chief Revenue Officer of Auth0, Dave oversaw all go-to-market from less than $1M ARR to north of $200M ARR, and through its sale to Okta for $6.5B in 2021. Prior to Auth0, Dave held a number of executive positions with early stage companies like Redfin, Autonomy and Applied Discovery. Starting his career in law, Dave was also a partner at Cozen O’Connor before making the move to high-growth technology companies.

Given our relationship with Auth0, Dave has been a member of the Sapphire family for several years already, and we are now excited to bring him further into the fold to provide unique value to companies we partner with. We were particularly excited about welcoming Dave to our team because of the diversity of experience he brings.  He has seen all stages of maturity, from expansion stage to pre-IPO, but also torrid growth within a B2B SaaS organization.  Perhaps even more importantly, Auth0 was somewhat unique in that they sold to SMB, Mid-Market, and Enterprise, yet also had a Product-Led Motion (driven by their Open Source offering), as well as a healthy outbound motion to expand PLG accounts or land larger enterprise accounts.  Because of this range, we believe he is uniquely suited to understand and drive value to B2B SaaS, Infrastructure and FinTech businesses that remain our core focus areas at Sapphire.

Welcome, Dave! We are excited for what’s to come.