Statistic Info

These businesses grow from 10k to 93k in MRR in their first year of commercialization and then to 413k of ending MRR in their second.

On average, they raise $9.5M in Series A, though there is a range from smaller rounds of $3M to rounds of greater than $20M. That range is more indicative of the breadth of different rounds the market calls Series As. The average is more representative.

The average round size has been increasing by 11% annually. And this growth parallels the overall startup Series A size which has reached similar highs to rounds in 2000.

As round sizes have increased, so too has MRR at the time of the series A. Companies in the set who raised in 2014 recorded $50k in MRR at the time of the A. That figure has grown each year by 80%, and for the investments that closed in early 2016, that figure reached $163k. The increase is driven both by larger seed round sizes enabling companies to raise later, hence more MRR, and also the greater expectations in the fundraising market given larger check sizes sought by founders.

Surprisingly, 27% of these companies raise Series A with $0k in MRR, before the business has commercialized the software. At this point, investors are betting on the team’s unique backgrounds, approach to the market or some other characteristic of the opportunity.

Unlike later rounds, Series A pricing has no correlation to MRR or next-twelve-months (NTM) revenue, which is a proxy for growth rate. This lack of a relationship indicates the Series A market pricing is more of a function of supply and demand and the ability of the founders to engender an active auction, than a mark-to-market pricing event.

Tomasz Tonguz

More Growth Strategy Stats

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

Improve Your Pricing Schedule And Turn More Profit

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

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

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 companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

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