Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

Statistic Info

When we looked at the fastest growing SaaS companies in our study (those with a CAGR of over 50%) we found an average Quick Ratio of 3.9.

These SaaS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn. They are, in other words, exactly the type of SaaS startup that Mamoon looks for when deciding where to invest.

And, as their high Quick Ratio implies, they have a great chance to continue growing quickly and healthfully, and eventually become one of those fabled SaaS companies with a run rate of more than $10 million.

More SaaS + Software Stats

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

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

The median annual unit churn for SAAS companies was 10% in 2016

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

When venture capitalists participate in seed rounds, the average round size is 3x larger

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

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

More Growth Strategy Stats

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

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

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

Software and online services are in a period of dizzying growth

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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