51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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When removing the smallest companies from the distribution, we find growth rates for companies using mainly Internet distribution lagged. Companies with mixed distribution strategies appear to be more agile and reported the highest growth. There was no distinguishable difference between growth rates for field sales vs. inside sales dominated companies. Rates are largely in line with last year’s survey.

More SaaS + Software Stats

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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

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

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

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

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

More Growth Strategy Stats

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

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

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

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

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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