Monitoring service New Relic this morning said it has agreed to be acquired by Francisco Partners and TPG for $6.5 billion in cash.

Shares of the company, which went public back in 2014, are up around 13.5% on the news.

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The deal is interesting because of its size, but we’re more interested in the insight it provides on the current state of the tech landscape as it pertains to valuations. Given the dry IPO climate, we are bereft of new data regarding exit values, so this deal is like a fresh, cool breeze on a sultry summer afternoon.

New Relic’s $87-per-share sale price gives it a valuation that’s less than seven times its current run-rate revenue. The question we have to answer is whether or not that price seems parsimonious, reasonable or indulgent given current market data and our valuation expectations based on recent private and public-market data.

This morning, we’ll start with a look at New Relic’s latest quarterly results, compare that information to its sale price, and then relate what we’ve learned back to everyone’s favorite corporate cohort: Richly-valued startups that have yet to leave their parents’ basements.

A business based on consumption

New Relic reported revenue of $242.6 million in the quarter ended June 30 (its fiscal first quarter), up 12% from a year earlier. The company has been shifting from a subscription model to a usage-based (consumption-based) pricing setup, and you can see that in the results: Consumption revenue increased 39% $213.9 million, while subscription revenue declined by 54% to $28.7 million.