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

SaaS + Software
Statistic in Growth Strategy

Statistic Info

When we looked at the fastest growing SaaS companies in our study (those with a CAGR of over 50%) we found an average Quick Ratio of 3.9.

These SaaS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn. They are, in other words, exactly the type of SaaS startup that Mamoon looks for when deciding where to invest.

And, as their high Quick Ratio implies, they have a great chance to continue growing quickly and healthfully, and eventually become one of those fabled SaaS companies with a run rate of more than $10 million.

However, once we started digging deeper, the story became a little more complicated (and more interesting).

InsightSquared

More SaaS + Software Stats

56% treat “Existing Customer Renewals” as high priority

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

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

Internet Sales strategies have a significantly lower CAC of just $0.42

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

More Growth Strategy Stats

Internet Sales strategies have a significantly lower CAC of just $0.42

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

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.

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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

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

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

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

Looking for SaaS focused services?
SaaS Website Design
SaaS SEO Agency
SaaS PPC