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 companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

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

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

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

Customer Segmentation analysis will help point out which are your most profitable segments

56% treat “Existing Customer Renewals” as high priority

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

More SaaS & Tech Growth Strategy Stats

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

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues

When venture capitalists participate in seed rounds, the average round size is 3x larger

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

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