Slingr Research

The Portfolio Software Tax.

Every portfolio company pays a recurring, compounding tax to per-seat SaaS — and almost half of it is waste. Across a portfolio, that's EBITDA leaking every quarter and enterprise value left on the table at exit. Here's how to size it for your portcos, and how to take it back.

The findings

What the benchmarks say

$4,830
Average SaaS spend per employee per year — up ~22% year over year. Across a 500-person portco, that's ~$2.4M a year in recurring software.1
~46%
of SaaS licenses sit unused or underutilized in a given month — spend that delivers no value but renews anyway.2
~7.2×
Average mid-market EBITDA exit multiple. Every dollar of that recurring spend you remove is worth roughly seven at exit.3

Size the software tax on one portco

A transparent model built on the public benchmarks above. Adjust any input to your portco — the "recoverable share" is the portion you can take back by cutting unused licenses and replacing rented core tools with software you own.

Est. annual SaaS spend
The software tax (recoverable EBITDA / yr)
Enterprise value at stake at exit

Modeled estimate, not a quote — your portco's real numbers depend on its stack and how much of it is core. Owning core software also removes the vendor-concentration and license-cliff risk that surfaces in diligence.

Three moves that convert the tax into multiple

Cut the dead licenses

The fastest win: reclaim the ~46% of seats nobody uses. Pure margin, no build required — and it tells you which tools actually matter.

Own what's core

The workflows that are the business shouldn't be rented per seat forever. Replace them with owned, AI-accelerated software — the recurring cost becomes a one-time asset.

Roll the pattern

What works at one portco ports to the platform and every add-on. The software tax is a portfolio-wide line item, so the recovery compounds portfolio-wide.

How we model it

1

Annual SaaS spend

Headcount × SaaS spend per employee. Default per-employee figure: $4,830/yr (Zylo, 2025), which skews lower in manufacturing (~$2,500) and higher in tech — adjust to your portco.

2

The recoverable share

The portion of spend you can take back. We default to a conservative 30%; the cited ceiling on pure waste alone is ~46% of licenses unused (Zylo, 2025), before any own-vs-rent gains.

3

Value at exit

Recovered spend flows to EBITDA and is valued at your exit multiple — default 7.2×, the 2025 mid-market average (GF Data). LMM deals run ~6–8×.

Sources: 1 Zylo 2025 SaaS Management Index (40M+ licenses analyzed). 2 Zylo 2025, license utilization ~54% / ~46% unused or underutilized. 3 GF Data via Middle Market Growth, 2025; lower-middle-market entry multiples ~6–8× EBITDA. This is a transparent model built on public benchmarks, not a survey of Slingr clients — figures are illustrative and vary by company.

The software tax, answered

What is the 'portfolio software tax'?

It's the recurring, compounding cost a portfolio company pays for per-seat SaaS - much of it for licenses that go unused - plus the lost opportunity of renting core software instead of owning it. Across a portfolio it represents real EBITDA leakage and enterprise value left on the table at exit.

How big is it?

Public benchmarks put SaaS spend at about $4,830 per employee per year, with roughly 46% of licenses unused or underutilized. For a 500-person company that's ~$2.4M a year in software, a meaningful share of it recoverable. Use the calculator to model a specific portco.

How do you recover it?

Three moves: reclaim unused licenses (pure margin), replace rented core workflows with owned AI-accelerated software, and roll the pattern across the portfolio so the recovery compounds. Recovered spend flows to EBITDA and is valued at your exit multiple.

Is this based on Slingr client data?

No - v1 is a transparent model built on cited public benchmarks (Zylo, GF Data), so the math is defensible and adjustable to your portco. We're collecting first-party portfolio data to publish a proprietary benchmark; contribute yours to get the full results.

Size it. Recover it. Bank it at exit.

Bring us one portfolio company and we'll turn the model above into a real plan — the dead licenses to cut, the core workflows worth owning, and a 30-day proof on the highest-value one.

Get a portfolio assessment →

Run the numbers across the portfolio first? See the value-at-stake math.