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

A 1% increase in pricing strategy yields an average 11% increase in profit

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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

47% of millennials want to work at diverse companies, according to a recent study.

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.

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

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

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