Eighteen months ago, UK SaaS valuations were trading at the low end of the post-2021 compression. Through the first half of 2026, the public-market cohort has recovered meaningfully — but not uniformly. The dispersion between top-quartile and median EV/ARR multiples is wider than at any point we have measured since 2020, and that has direct implications for any founder planning to raise, grant options, or transact in the next twelve months.
Three things changed in 2026
First, the rate environment finally stabilised, which let the discount-rate inputs in DCFs settle into a defensible mid-single-digit risk premium. Second, the cohort of high-NRR, capital-efficient SaaS businesses started attracting a premium that we have not seen since 2021 — net retention above 115% is now the single largest driver of dispersion in public comparables. Third, HMRC SVM updated its informal guidance to expect explicit churn-based sensitivity in EMI valuations.
What this means for an EMI valuation
If you are granting options to a 20-person SaaS team in 2026, the EMI s.431 valuation will rely on AMV and UMV ranges that bridge between forward EV/ARR (for the unrestricted value) and a marketability-discounted DCF (for the actual market value). HMRC SVM expects to see the bridge documented — not just the conclusion — and a churn sensitivity worked through to show the lower bound of the range under stress.
The metric the best founders track weekly
Net Revenue Retention. Not gross retention, not ARR growth, not CAC payback — all of those matter, but NRR sits upstream of every one of them. A SaaS business with 115% NRR doubles ARR every five years from expansion alone; a business at 95% NRR has to acquire 15% of last year's ARR before it has grown at all. We model NRR as a leading indicator in every SaaS valuation we run.
Where to look next
If you are preparing for a 2026 valuation or EMI grant, the practical move is to start tracking the metrics that drive multiple expansion — NRR, gross margin, rule-of-40 — at least monthly. A board-quality dashboard with twelve months of trailing data is the single most useful artefact a valuer can have access to, and it materially shifts the multiple range we can defend.
About the author
Abi Shitta
Founder & Principal Consultant, ValuCap Corporate Finance. ACCA, FMVA, MBA. Named signatory on every valuation report.
Abi signs every valuation ValuCap issues and is the point of contact for HMRC SVM correspondence.
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