SaaS IPOs have more than doubled over the last 12 years

Quote Info

1. The number of SaaS IPOs has more than doubled in the past 12 years. t
2. The number of rounds of financing each company raises before IPO has nearly doubled from 2.5 to 4.5, i.e. Series B/C to Series D/E. These figures exclude seeds, which I’ve defined as rounds less than $1.5M.
3. The total amount of cash raised before IPO has doubled from the ‘98 cohort, adjusted for inflation.
4. The median round sizes across the life of the company have remained relatively constant.
5. IPO offerings have increased by about 40% in size

More SaaS + Software Stats

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

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

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

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

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

More Growth Strategy Stats

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

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

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

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

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

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