26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

SaaS + Software
Statistic in SaaS & Tech Growth Strategy

Statistic Info

art 1 of the survey results focuses on growth rates, go-to-market trends and cost structure. A new highlight in this year’s survey is data on balancing growth and profitability in SaaS companies,commonly known as The Rule of 40%.

You can findPart 2 results here. Part 2 compares application delivery methods, covers more on operational costs, and offers data on gross margins, contract terms, churn rates, capital requirements and accounting methods.

We’ve also created theforEntrepreneurs 2016 SaaS Infographic. The infographic pulls together major takeaways from the SaaS Survey and ties in advice and insights on keymetrics.

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

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.

Forentrepreneurs

More SaaS + Software Stats

80% of venture capital investments take place in the enterprise

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

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

After $10M in ARR, the median growth rate slows to just under 50%

Cloud-hosted applications have a 99% uptime

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

73% of organizations indicated nearly all their apps will be SaaS by 2021

More SaaS & Tech Growth Strategy Stats

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

Google only has a 30 percent female workforce

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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

Internet Sales strategies have a significantly lower CAC of just $0.42

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

A 1% increase in pricing strategy yields an average 11% increase in profit

At Twitter, 10 percent of tech roles are staffed by women

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