Statistic Info

~26% of respondents with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher – “The Rule of 40%”, a popular benchmark for top SaaS company performance.

The median results of those respondents meeting or exceeding “The Rule of 40%” showed that they tended to report lower churn and lower CAC ratios, be more enterprise-focused with larger contracts, rely more heavily on field sales and more often report a vertical focus.

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More SaaS + Software Stats

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

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

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

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

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

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

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

More Growth Strategy Stats

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

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

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

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

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

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

High-growth companies generate 60% fewer sales opportunities than low-growth companies

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