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The State of Hardware-as-a-Service 2024
Chelsea Hakso, Lane Bruno, Julian Nash, Josh Pherigo, Eli Oftedal
Key takeaways
Several macro trends — such as onshoring, clean energy investment and greater defense spending — are boosting demand for hardware, and venture capital (VC) investors are responding with renewed interest. Particularly appealing are hardware-as-a-service (HaaS) companies, which are raising more money — and at higher valuations — than other frontier tech companies. Our latest report assesses the state of this growing business model with updated metrics most relevant to success in the current economy and funding environment.
45%
Of HaaS companies are in the industrial space
With falling prices for robots, industrial robotics may be the sweet spot.
59%
Higher median valuation multiples than other frontier tech business models
Recurring revenue is appealing to investors.
15 months
Median payback period for a HaaS system
The median payback period is longer for more expensive machines.
Read the full report on the State of HaaS
Gain insights into the trends driving success in hardware-as-a-service.
The data
The latest report on HaaS uses SVB survey data and analysis to help founders and investors better understand this evolving business model.
VALUATIONS
VC investors value HaaS model at a premium
In the frontier tech space, HaaS companies are valued at a median revenue multiple 59% higher than other firms.
The biggest differences arise in more capital-intensive sectors such as aerospace, industrials and transportation.
Note: Pre-money valuation to annual revenue. Sources: Pitchbook Data, Inc., SVB State of HaaS Survey 2024 and SVB analysis.
MACHINE SERVICE LIFE
Firms may have to wait for accurate performance metrics
Typically, the oldest machine in service hasn't reached even half its estimated service life.
Many HaaS startups haven’t been around long enough to know their systems’ true service life, a key factor in calculating each machine’s financial performance.
Source: SVB State of HaaS Survey and SVB analysis.
SVB’s HaaS Metrics that Matter
Through a proprietary survey of HaaS companies, we've established benchmarks for machine metrics to help you understand the ideal payback periods and machine lifetime values in the HaaS model.
Download The State of HaaS 2024
Gain insights into the trends driving success in hardware-as-a-service.
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