SaaS IPOs have more than doubled over the last 12 years

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

SaaS & Tech Growth Strategy Articles

• Organization Structure Planning
  In this Insivia insight, Andy points out how important organization structure planning is to your long term goals. Unless you are a sole proprietor working alone, you team will be a vital part of your growth and success. Incorporating them into your plan will not only help them see how all of the pieces fit […]
• What The Smart Home Means For Marketing
  This is the reality that we are on the cusp of...
• What Is MRR
  The simple answer is that MRR is your Monthly Recurring Revenue and one of the key metrics that SaaS companies use to evaluate success.
• The Importance of a Business Plan
  Before you can begin putting together an effective marketing plan, it’s important to make sure you have a business plan in place. Today Andy talks about understanding the long term and short term goals and objectives of your business, before you start planning your marketing. One of the things I wanted to talk about today […]
• How Technology Companies Can Leverage Focused Niche Markets
  How B2B SaaS Companies Can Leverage Focused Niche MarketingAs the world advances more and more toward consistent innovation, B2B SaaS companies are finding it harder to survive in the market. The market is so competitive that technology companies are at each other's throats all the time for survival. It's all about 'survival of the fittest. […]
• Blue Ocean Strategy
  Today, Andy shares with us what a "Blue Ocean" strategy is and how to implement it in your business and marketing strategies. Blue Ocean StrategyA Red Ocean is an ocean where there's a lot of competition, a lot of people fighting and a lot of blood in the water, which makes it really hard to sell […]
• Everything You Need to Know About SaaS Affiliate Programs and How to Implement it Into Your Product-Led Growth Strategy.
  SaaS Affiliate Programs: Everything You Need to Know About and How to Implement it Into Your Product-Led Growth Strategy.Generating trial users and acquiring customers for your SaaS business can be a frustrating challenge. If you're looking for new ways to grow your business, you may have heard of affiliate marketing and wondered how it can […]
• Blue Ocean Strategy Developing Value Propositions
• How to Determine a SaaS Marketing Budget
  Determining a marketing budget for a SaaS or Software company can be a challenging exercise.  Often there is no one right answer for everyone but there are ways to help you attack the problem.Below, read our expanded article and watch our video with Andy Halko as he shares some helpful tips on how to create […]

SaaS + Software Stats

• The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%
• Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate
• Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added
• The best place to hide a dead body is page 2 of Google search results.
• More than 1/2 of SAAS companies increased their spending on customer retention last year
• Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.
• Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing
• As SaaS companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth
• Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

SaaS & Tech Growth Strategy Stats

• Increases in revenue growth rates drive twice as much market-capitalisation gain as margin improvements for companies with less than $4 billion in revenues
• The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%
• More than 1/2 of SAAS companies increased their spending on customer retention last year
• If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business
• 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
• Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts
• Companies with longer contracts (2+ years) reported the lowest annual unit churn
• 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
• Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015