Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

From HubSpot
Statistic in SaaS & Tech Growth Strategy

The SaaS landscape is ever changing, and its crucial for businesses to evolve their strategies and tactics -but without objective data on what works and what doesn’t, shifting strategies would be mere conjecture.

More SaaS + Software Stats

SaaS solutions have the highest security features with 95% security failures due to human error

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

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

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

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

More than 1/2 of SAAS companies increased their spending on customer retention last year

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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

SaaS IPOs have more than doubled over the last 12 years

After $10M in ARR, the median growth rate slows to just under 50%

More SaaS & Tech Growth Strategy Stats

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

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

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

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

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

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less