AI software companies trade across a very wide band — roughly 8–45× revenue in 2026 — because valuation hinges on defensibility, not just growth. A thin wrapper on a foundation model and a company with proprietary data and owned IP sit at opposite ends.
Get your exact number → free 2026 valuation + Exit Readiness Score| Profile | Verdict | Revenue multiple |
|---|---|---|
| Wrapper (no IP, high model dependence) | Wrapper risk | ~8–14× |
| Mixed (some product + data) | Mixed | ~14–25× |
| Defensible IP + proprietary data | Defensible | ~28–45× |
Ranges from real 2026 lower-middle-market transaction data. Sources: aventis-advisors.com/saas-valuation-multiples, ctacquisitions.com/ebitda-multiple-by-industry-2026, equidam.com/ebitda-multiples-trbc-industries, praxisrock.com/insights/ebitda-multiples-by-industry, l40.com/insights/saas-multiples. Your specific multiple depends on the value drivers below.
Defensibility is scored on: owned model/IP, a proprietary data moat, share of revenue that's true product vs. services, gross margin (inference-cost durability), and foundation-model dependence (inverse). Low defensibility = wrapper risk and a single-digit multiple; strong defensibility earns the 40–50× tier.
See where your business lands → instant valuationAI software spans 8–45× revenue depending on defensibility. Wrappers on foundation models sit at the low end; companies with owned IP and proprietary data reach the top.
Defensibility. Owned models, proprietary training data, high product (not services) revenue, strong margins, and low foundation-model dependence justify premium multiples. Thin wrappers do not.
If most value comes from prompting a third-party model with no proprietary data or owned IP, buyers treat it as a wrapper. Proprietary data and owned models move you into defensible territory.
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