Statistic Info

High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.

Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.

Tomasz Tonguz

More SaaS + Software Stats

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

SaaS IPOs have more than doubled over the last 12 years

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

How Often Should The Pricing Committee Be Meeting And Making Changes?

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

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

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

More Growth Strategy Stats

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

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

Improve Your Pricing Schedule And Turn More Profit

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

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

Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing