Category: SaaS
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.
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
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…)
June 20, 2024 SaaS Capital : What’s Your SaaS Company Worth?
Valuation Multiple = -2.43 + (0.19 * SCI) + (6.21 * ARR Growth Rate) + (4.38 * NRR Rate) (read more…)
May 22, 2024 Emergence Capital : Beyond Benchmarks 2024
ARR growth rates decreased significantly in 2023, and growth stage companies were impacted the most. Fundraising is meaningfully harder today than it has been in the past few years. 60% of companies leveraged GenAI in a 2023 product release. Public Markets no longer reward "Growth at All Costs"; however, Public Markets still value Growth at 2-3x Profitability (read more…)
April 26, 2024 SaaS Capital : 2024 Benchmarking Metrics for Bootstrapped SaaS Companies
The median growth rate for bootstrapped SaaS companies with $3M to $20M in ARR is 30% while those in the 90th percentile are growing by 75%. The median Net Revenue Retention (NRR) for bootstrapped SaaS companies with $3M to $20M in ARR is 100% while those in the 90th percentile report NRR of 120%. (read more…)
April 11, 2024 SaaS Capital : 2024 Private SaaS Company Valuations
As of March 31, 2024, the SCI median valuation multiple stands at 6.8 times current run-rate annualized revenue (we believe run-rate revenue is the most accurate measure of the current scale of the business). While the multiple has stabilized in the 6-7x range, it is down roughly 60% from its peak achieved in 2021. (read more…)
April 1, 2024 SaaStr : The Most Important SaaS Metric of All: Net New Customer Growth
The leaders in SaaS and Cloud keep new customer count up in the double-digits … even at billions in ARR. The averages: + 14% new customer count growth + 23% ARR growth even at + 1.25B ARR on average But that’s the average. You want to do better than that, given that the average public SaaS company only trades at 6x ARR. So aim for 20%+ new customer growth at scale ($100m+), and 50%+ as you approach $50m ARR. Below that is just too low. Your present may be secure, but your future is at high risk. And try to keep your customer count growing at least 50% as fast as your NRR, higher if you are SMB. That ensures you have a future, and you aren’t overly reliant on upsells from the base. (read more…)
March 19, 2024 SaaStr : What Are The Odds You Get Acquired Within 5 Years for a Good Price? Around 1%-1.5%
So my educated guess from this data: 1%-1.5% of startups have a “good” exit in the first 5 years. That sounds pretty tough, and I guess it is. But it also means just plan on going longer. A number of my best “exits” had no great M&A offer the first 5 years, and a number of others had soft offers that fell apart in the end. Go long. If something great comes up first, maybe take it. And be optimistic, too. But realize it may be years 6-10+ where you build the real value. 5 is fast in SaaS and B2B. (read more…)
CATEGORY: resilience, SaaS
March 14, 2024 SaaS Capital : The Rule of 40 is Dead… Long Live the Rule!
For companies at least 2 years away from an exit transaction, grow as sustainably fast as your expected access to capital will allow you in your chosen market, and burn as much cash as you can access. For companies with an exit horizon within 2 years, get to breakeven to own your destiny. (read more…)
CATEGORY: growth, resilience, SaaS