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

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

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

Customer Segmentation analysis will help point out which are your most profitable segments

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

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

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

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

80% of venture capital investments take place in the enterprise

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

More Growth Strategy Stats

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

In 2018, the market size of information technology outsourcing amounted to 62 billion U.S. dollars.

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

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

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue