The SaaS investment has it has been ablaze over the past decade and returns have returned, with IPOs like Datadog, direct listings like Slack and acquisitions like Qualtrics (which is now being rejected) creating billions of wealth and VC returns. Dozens of other SaaS startups are on the bridge to head for their exits in the same way, and many VC funds - especially those with deep portfolios in the SaaS space - are doing well.
However, the gigantic returns we are seeing today for SaaS portfolios are unlikely to repeat.
The big short-term threat is simply the price: investments in SaaS have become much more expensive. It may be difficult to remember, but only a decade ago the "Software as a Service" business model was revolutionary. Much in the way it took years for the cloud infrastructure to take hold in the corporate IT departments, the idea that one had not licensed software but paid for it by the user or by use over time was almost heretical.
For VCs willing to jump into space, prices were (relatively) cheap. Investor attention a decade ago was heavily focused on the web and mobile consumer devices, led by Facebook's successful IPO in May 2012 and Twitter's IPO the following year. While every investor was chasing deals like Snap (chat), the smaller population of investors targeting corporate SaaS (or even more exotic spaces like, gulp, fintech) got big deals on what would become the biggest unicorn in the decade.
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