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Reported median annual unit churn (by customer count) is 10% for the group. This median has remained relatively consistent with 2015 findings.

Not surprisingly, companies with longer contracts (2+ years) reported the lowest annual unit churn.

Median annual gross dollar churn (without the benefit of upsells) is ~8%. This result is comparable to past survey results (7% in 2015, 6% in 2014, 8% in 2013).


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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%

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

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

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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”

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.

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