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

Statistic Info

In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time.

High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.

Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.

More SaaS + Software Stats

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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

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

Is your SaaS business viable?

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

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

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

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

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

More Growth Strategy Stats

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

Software and online services are in a period of dizzying growth

54% treat upselling and add-on sales as high priority

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

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%)

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

At Facebook, 15 percent of tech roles are staffed by women

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