Latest / The Series A Show with Fexingo: Early-Stage Funding, Pitch Decks, and Startup Milestones / Supabase Doubled to 10B in 8 Months What That Means for B2B SaaS Valuations
Transcript
- Lucas: If you're building a B2B SaaS company right now, and you're watching a startup that basically clones Firebase in open source double its valuation to ten billion dollars in eight months — you want to know what that math looks like. Luna: Supabase. The headline from this morning. Eight months ago they were at five billion. Now ten. That's a hundred and twenty-five percent increase in less than a year. Lucas: And it's not like they went from zero to one. They've been around since 2020, raised a Series B in 2022 at a reported one billion. So the step-up from five to ten in eight months — that's a velocity that even in this market turns heads. Luna: What drove it? Because it's not just revenue. They're not public. There's no quarterly earnings call. Lucas: Right. So the valuation re-rating in private markets comes from a combination of growth rate, market positioning, and competitive signal. Supabase has been growing its revenue — I've seen estimates north of thirty million in ARR — but it's the trajectory and the narrative that pushed the multiple up. Luna: They're the open-source alternative to Google's Firebase. And Firebase has been losing developer mindshare. So Supabase is capturing that. Lucas: Exactly. And the timing matters. If you look at the public cloud infrastructure names this week — Microsoft is down nine percent over the last five days, NVIDIA down eight — the market is rotating a bit. But private infrastructure still commands a premium because the growth is earlier and the TAM narrative is bigger. Luna: What multiple are they paying? At ten billion on maybe thirty-five million ARR — that's north of two hundred and fifty times. Lucas: It's extreme. But for a company growing triple-digit year-over-year, with an open-source moat and a switch-cost argument — once developers build on your database, they don't leave — VCs are willing to pay up. The question is whether that multiple holds when public SaaS comps trade at eight to twelve times revenue. Luna: So what does that mean for a founder building a developer tool today? Should they aim for that kind of valuation? Lucas: No, I don't think you aim for the multiple. You aim for the product-market fit and the growth that justifies the multiple. Supabase's story is that they became the default for new Postgres-based projects. And Postgres is having a moment — it's the fastest-growing database in the world by developer adoption. Luna: Yeah, I've seen surveys where Postgres is now the most loved database. That tailwind is real. Lucas: Real and structural. Supabase wraps Postgres with an API layer, real-time subscriptions, authentication — everything a developer needs to go from zero to deployed without thinking about infrastructure. That's the product that justifies the valuation, not the other way around. Luna: And the Series B and C investors — they're betting that Supabase becomes the operating system for backend development. Not just a database. Lucas: That's the bull case. The bear case is that Firebase itself hasn't gone away. Google has been investing heavily in Firebase's next generation. And there are other open-source alternatives like Appwrite. So Supabase has to keep moving. Luna: Speaking of things that keep moving — if this conversation is useful for what you're building, and you've gotten something out of it, you can support the show at buy me a coffee dot com slash fexingo. It's what keeps this ad-free and focused on the numbers. Lucas: Yeah, that's it. Just a coffee if it was worth it. And I mean it — that link is the only thing we ask. We don't do sponsors, we don't do product pitches. So if today's episode helped, that's the place. Luna: All right. Back to the multiples. So Supabase at two hundred fifty times ARR — that's a signal for earlier-stage founders. Lucas: Huge signal. Because if you're raising a seed round or Series A for a developer infrastructure product, you can point to Supabase and say 'the market is willing to pay a premium for platform companies with high gross margins and switching costs.' But you have to show the growth. Luna: What's the growth threshold? Like, to get a Series A at a decent valuation today? Lucas: For infrastructure software, investors want to see at least triple-digit year-over-year revenue growth at the Series A. At seed, it's more about user traction and contribution — how many developers are using your open-source project, how many stars on GitHub, how many production deployments. Supabase itself had something like sixty thousand GitHub stars before they raised their Series A. Luna: That's the playbook. Build in the open, get community adoption, then monetize through a cloud offering. Lucas: Exactly. And the cloud offering is key. Supabase has a hosted product — that's where the revenue comes from. The open-source core is free, but if you want managed, you pay. That's the model that drove their growth. Luna: So for a founder listening, the takeaway is not 'go chase a two hundred fifty times multiple.' It's 'build something developers love, give it away for free, then charge for the convenience.' Lucas: That's exactly it. And the valuation will follow if the adoption curve is steep enough. Supabase's eight-month doubling is an outlier — but it's an instructive one. Luna: What about the cap table dynamics? At ten billion, even if the founders own fifteen percent, that's one point five billion on paper. But with multiple rounds, dilution is real. Lucas: Yeah, founders likely own less than that after a Series C. But the important thing is that the valuation step-up means early employees and angel investors are sitting on life-changing money — if there's liquidity. And Supabase has done secondary sales, which helps. Luna: Tender offers? Or direct secondaries? Lucas: Both, I believe. They've done tender offers in the past to let employees cash out some equity. That's smart — it retains talent. Because when your paper value is that high but you can't sell, people get restless. Luna: Right. You don't want your senior engineers leaving because they can't afford a down payment. Lucas: Exactly. So the liquidity strategy is part of the valuation story. A high valuation with no liquidity is just a number. A high valuation with a secondary program is a retention tool. Luna: Alright, last question. Is Supabase an IPO candidate in the next few years? Or do they stay private longer? Lucas: I think they could go public if they want to. At ten billion, they're big enough. But the public markets for high-growth software have been choppy. With Microsoft down nine percent this week and the NASDAQ tech index under pressure, the window might not be wide open right now. Luna: So they wait. Keep growing, keep building, and go when the market is ready. Lucas: That's the prudent move. And in the meantime, they can raise private capital at an even higher valuation if they hit their numbers. That's the luxury of being a category-defining company. Luna: Category-defining at ten billion. And they got there by being the open-source alternative to a Google product. That's the kind of positioning that makes VCs open their wallets. Lucas: It is. And it's a reminder that in B2B SaaS, the best competitive advantage is often being the default choice for a new generation of developers. Supabase is that for Postgres. Luna: And for founders listening, the question is: what's your Postgres? What's the platform you can become the default for? Lucas: That's the question worth sitting with. Thanks for being here.