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
Tomasz Tonguz

More SaaS + Software Stats

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

Growing faster has twice as much impact on share price as improving margins

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

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

It’s 9x cheaper to retain existing customers than acquire new customers: costing $0.13 to acquire any additional dollar of revenue

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

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

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

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

More Growth Strategy Stats

At Twitter, 10 percent of tech roles are staffed by women

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

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

A 1% increase in pricing strategy yields an average 11% increase in profit

In 2018, the U.S. imported aerospace products worth about 53.98 billion U.S. dollars.

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses