For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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].

More Tech Services Stats

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

56% treat “Existing Customer Renewals” as high priority

In 2017, website sales amounted to approximately 300 billion British pounds.

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.

93% of CMOs who employ Agile practices say their speed to market for ideas, campaigns, and products has improved93% of CMOs who employ Agile practices say their speed to market for ideas, campaigns, and products has improved

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

At Facebook, 15 percent of tech roles are staffed by women

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

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

More Growth Strategy 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)

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

The average SaaS company spends just 6 hours determining their pricing strategy

Software and online services are in a period of dizzying growth

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%