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Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

There doesn’t appear to be any relationship between median contract size and growth other than a bump-up for the <$1K and $15K-$25K groups (though this could be skewed by sparse data in those groups). Last year, the bump-up occurred for companies in the $100K-$250K AVC range.

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More SaaS + Software Stats

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

Is your SaaS business viable?

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

Growing faster has twice as much impact on share price as improving margins

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

More Growth Strategy Stats

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

SaaS IPOs have more than doubled over the last 12 years

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

Negative Churn and Expansion Revenue

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.