News
August 25, 2025 SaaS Capital : SaaS Capital Mid-2025 Review
- Despite a resilient economy and strong financial markets, SaaS revenue growth rates continue to decelerate. From our SaaS Capital Index™ data, the median public company growth rate as of July 2025 is 14%, the lowest since the Covid spending-driven boost. (This observation should be tempered by the fact that the median public company’s revenue size is also at an all-time high, and growth tends to slow with company maturity.)
- VC and PE capital investment has returned to 2021 levels on a dollar basis, but those investments are concentrated in larger, later-stage companies. Per Pitchbook, more than 30% of total VC dollars year-to-date have gone to just three AI companies.
- The median valuation multiple for public SaaS companies in the SaaS Capital Index remains in a tight range between 6-7x – levels similar to the 2016-2018 time period. However, unlike this prior period, the spread between valuation winners and losers is now much wider, with higher highs and lower lows. The same dynamics are occurring in the private SaaS financing market.
August 24, 2025 SaaStr : Winner-Take-All Has Taken Over Venture
The Top 1% of AI Start-Ups Are Now Valued at 3-10x ‘Normal’ Multiples. Seed rounds in the 99th percentile are hitting $161M valuations. That’s not a typo. That’s +123% higher than even the 95th percentile at $72M. The top tier really has discovered a new form of value creation that justifies infinite multiples We’re in the late stages of a bubble where “AI” has become the new “blockchain” or “metaverse” (read more…)
CATEGORY: VC, winner take all
June 18, 2025 SaaS Capital : 2025 Private B2B SaaS Company Growth Rate Benchmarks
- The median growth rate for all companies in the survey registered 25%. This is down from a population median of 30% in 2023 and puts growth closer to the pandemic levels seen in 2020.
- Growth rate is positively and exponentially correlated with net revenue retention. Increasing Net Revenue Retention (NRR) from the 90% to 100% range to the 100% to 110% range improves growth rate by 5 percentage points. Companies with the highest NRR report median growth that is 83% higher than the population median.
- Continuing a pattern we have observed over the years, overall average annual contract value (ACV) levels do not appear to have an overall correlation with growth rate
June 2, 2025 SaaStr : AI Startups Burn Through Cash 2x as Fast
#1. AI Companies Are Burning Through $100M in Half the Time It Used to Take #2. 68% of Enterprise Capital Now Goes to $100M+ Rounds #3. Series A Graduation Rates Have Collapsed to Historic Lows #4. The Middle in VC is Getting Hollowed Out #5. 40% of VC Fundraising Capital Now Comes from AI-Focused Funds #6. Revenue Per Employee Is Skyrocketing for AI Companies #7. The Rule of 40 Has Become the “Rule of 9” #8. Zombiecorns Are Multiplying (And It’s Getting Worse) #9. Half of Enterprise Software Startups Need to Raise Within 12 Months #10. M&A at Seed Stage Has Jumped 13 Percentage Points Since 2019 (read more…)
CATEGORY: risk, VC, winner take all
May 20, 2025 Silicon Valley Bank : State of Enterprise Software 2025
307 US VC-backed unicorns are enterprise software. This number accounts for 40% of all US VC-backed unicorns last year, up from 31% five years ago. A record 40% of capital raised from US VC funds closed in 2024 came from funds that target the AI vertical. US enterprise software startups are exiting at the seed stage nearly a quarter of the time, up 13 percentage points since 2019. (read more…)
April 24, 2025 The Value VC : The Least Obvious Winners Often Pay Off: Miami and the Marlins…
I tend to do deals across a spectrum of scores (on my scoresheet) - the most obviously good ones score higher than the more questionable (though still good) deals. While the highest scoring deals should theoretically have a higher probability of outsized returns, the opposite has been true. (read more…)
CATEGORY: resilience, valuation, VC
April 17, 2025 Carta via LinkedIn : Your cofounder won’t leave… right?
A higher share of startups founded in recent years had lost a cofounder in the early going (first 1-3 years). Typically founders have a 4-year vest on their shares. That means that about a quarter of founders will leave before their vest is complete (although it may be a higher if the vest didn't begin until the first VC round). (read more…)
CATEGORY: leadership, resilience
March 19, 2025 SaaStr : 34% of All Startup Acquisitions Are By Other Start-Ups. A New Record.
First, it’s not new. 20% of deals even in 2018 were start-ups buying start-ups. And the dollar value has gone up, it’s doubled since 2018, although down from a 2023 peak. But a lot of these deals may be sort of “better than nothing” deals. Better than shutting down. Better than running out of money. And they often are better than that. (read more…)
March 11, 2025 TechCrunch : Y Combinator founders raising less money signals a ‘vibe shift’
“People used to climb Everest and they needed oxygen. Today, people climb it without oxygen. I want to summit Everest and use as little oxygen (VC) as possible.” (read more…)
CATEGORY: leadership, VC
February 24, 2025 Kyle Westway via Forbes : The New Venture Playbook: The Data Every Founder Needs To Know
About 20% of all venture capital rounds in 2024 were down rounds, double the historical average of 10%. This high percentage reflects the ongoing correction from 2021's elevated startup valuations. The time between funding rounds has also shifted significantly, with the median now extending beyond the traditional 18-24 month window. 2024 saw the highest absolute number of startup shutdowns in Carta's history. However, the failure rate remains consistent at around 90% for seed-stage companies. The bar for startup funding has risen significantly since 2021. Where once $1 million in ARR might have been sufficient to raise a Series A, founders now often need $3 million or higher growth rates to attract venture capital interest. "If you take venture capital and don't grow at venture capital paces, you could kill your company," he warns. "It is incumbent on the founder to understand their own business and choose the right type of capital for their growth trajectory." (read more…)
CATEGORY: capital, leadership, VC