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

Statistic Info

If a company were to maintain an aggressive 75% CAGR, it would take just over 5 years to hit that coveted milestone

Spend peaks during the expansion stage when companies rapidly build out their sales & lead generation teams

More SaaS + Software Stats

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%

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

80% of venture capital investments take place in the enterprise

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

Is your SaaS business viable?

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

How To Make Pricing A Constant Process In Your Organization

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

More Growth Strategy Stats

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

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

Negative Churn and Expansion Revenue

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

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

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues