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

From Tomasz Tonguz
Quote in SaaS & Tech Growth Strategy

In other words, the typical round size for SaaS companies hasn’t changed materially over the past 16 years but the number of rounds has doubled, which has doubled the amount of capital a startup raises in aggregate before IPO. At least on the surface, the data indicates SaaS companies aren’t more efficient.

That pattern may be driven by an increasingly friendly financing environment or because of increased capital needs of the business or many other reasons. So the next question to answer is capital efficiency. In a future analysis, I’ll calculate the ratio of revenue dollars to VC dollars invested to get a sense of the reality of cloud capital efficiency per revenue dollar.

More SaaS + Software Stats

The global cloud computing market size is expected to grow from USD 371.4 billion in 2020 to USD 832.1 billion by 2025

How to Reduce Churn

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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

56% treat “Existing Customer Renewals” as high priority

80% of venture capital investments take place in the enterprise

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

More SaaS & Tech Growth Strategy Stats

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

More than 1/2 of SAAS companies increased their spending on customer retention last year

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%

How To Make Pricing A Constant Process In Your Organization

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

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