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Upsells key to growth and scale
As shown in the chart below, companies that have made it past the $40MM revenue mark use upsells to drive a much higher percentage of their new Average Contract Value (ACV) than smaller companies. In fact, companies in the $40-75MM revenue range attribute twice as much new revenue to upsells as the median company.
Of course, it’s dangerous to imply causation here. There are a number of reasons why we might see this effect in later-stage companies. One unexciting possibility is that their overall growth in new business is slowing down and it’s skewing these percentages in favor of upsells. Let’s look at this data through another lens and explore how upsells are related to growth.
RJMetrics
More SaaS + Software Stats
High-growth companies offer a return to shareholders 5 times greater than medium-growth companies
When venture capitalists participate in seed rounds, the average round size is 3x larger
Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate
The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8