Statistic Info

The WSJ published a recent chart of the 49 startups with billion dollar valuations. According to their research, there have never been as many privately held companies with such high valuations ever. The absolute number of these massively valuable companies alone is amazing. Ten years ago, most of them would have gone public by now. But what other insights can we tease from the data about these very special businesses?

First, the Billion Dollar Club (BDC) is nearly evenly split between Consumer and Enterprise companies, as the table below shows. I’ve noted the median dollars raised, the median valuation and the valuation efficiency in the table. The valuation efficiency is the valuation divided by the capital raised. This metric tries to answer the question, how much capital did the startup need to raise to achieve that valuation? This is a somewhat flawed metric[1] but I’m going to use it to compare the relative attractiveness of sectors[2].

Tomasz Tonguz

More Tech Services Stats

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

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

Software and online services are in a period of dizzying 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

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

Three uses for the SaaS Guidelines

More Growth Strategy Stats

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.

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

Cloud-hosted applications have a 99% uptime

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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

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

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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14