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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

54% treat upselling and add-on sales as high priority

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

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%

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

More Growth Strategy Stats

Negative Churn and Expansion Revenue

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

General Dynamics is a market leader in the aerospace and defense industry. In 2018, a total of 105,600 people were working at General Dynamics.

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

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

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

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)