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

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

80% of venture capital investments take place in the enterprise

55% of SaaS companies rate Customer Retention as the key metric to measure

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

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

More Growth Strategy Stats

54% treat upselling and add-on sales as high priority

The average SaaS company spends just 6 hours determining their pricing strategy

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

Is your SaaS business viable?

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

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

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

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

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

Three uses for the SaaS Guidelines