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 IPOs have more than doubled over the last 12 years

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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

Companies with longer contracts (2+ years) reported the lowest annual unit churn

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

Software and online services are in a period of dizzying growth

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

There are around 3.8 million e-commerce sites in the USA

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

More Growth Strategy Stats

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

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

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

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

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

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

orecasts suggest that global blockchain technology revenues will experience massive growth in the coming years, with the market expected to climb to over 23.3 billion U.S. dollars in size by 2023.

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

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

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