Statistic Info

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

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More SaaS + Software Stats

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

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.

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

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

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

More Growth Strategy Stats

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

Companies with longer contracts (2+ years) reported the lowest annual unit churn

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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