SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

Statistic Info

The median annual contract size (subscription component only) for the group was $25K per year. These results are somewhat above the previous survey medians of $21K, $21K, $20K in 2015, 2014 and 2013, respectively.

The median average contract length is 1.3 years. The median billing term is seven months in advance. These results are very comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing one month over 2015 to seven months.

More SaaS + Software Stats

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

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

Software and online services are in a period of dizzying growth

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

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

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

More Growth Strategy Stats

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

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

High-growth companies generate 60% fewer sales opportunities than low-growth companies

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months