November 16, 2023 SaaS Capital : What is the Average Deal Size for Private SaaS Companies in 2023?
Deal size is correlated with company size. For example, companies with ARR $1 – $3 Million in ARR show a median ACV of $16,197 while companies with ARR of $10 – $20 Million show a median ACV of $35,831. For all but one company size (those with ARR $5 – $10 Million) ACVs generally declined vs. 2021. (read more…)
CATEGORY: growth, resilience, SaaS
November 8, 2023 Open View Partners : 2023 SaaS Benchmarks Report
- While growth is much harder to come by in 2023, there are pockets of resilience amid the doom-and-gloom.
- The North Star for many has become ARR per FTE, which reflects the productivity of your team. We’ve seen big increases in ARR per FTE year-on-year.
- Positioning yourself as “AI” doesn’t impact growth. But monetizing AI does.
- To drive productivity, companies need efficient product-led growth (PLG), expansion within the customer base, and improved operations.
CATEGORY: leadership, profitability, resilience, SaaS
October 5, 2023 SaaSletter : 2010 – 2021 SaaS Industry-wide Benchmarks
Positively, this speaks to:
- SaaS applications generating positive customer ROIs to earn land and expand within orgs
- Broadening of product suites, leading to larger “expansion surface areas”
- The increased revenue-generation emphasis of customer success as a function
- Installed base math: the early era of SaaS had definitionally a small installed base to expand upon. Whereas today’s SaaS vendors have decades of installed bases to expand from →that historic-to-new ratio imbalance mathematically will favor expansion as a driver.
- Challenges in winning new logos: CAC CAGR of 7%
- With field sales getting harder: CAC CAGR of 7% (vs 4% CAGR for inside sales)
CATEGORY: profitability, resilience, SaaS
August 29, 2023 Iconiq Capital : The New Era of Efficient Growth
2023 has seen continued deterioration in top-line performance as the macro environment continues to be challenging for SaaS businesses. While topline growth has fallen across the board, early-stage companies saw the biggest impact to ARR growth, falling from peak levels of 200%+ YoY growth to 111% YoY as of 1H 2023. Median net dollar retention has also been impacted, falling from peak levels of 130+% in 2017 to ~105% as of 1H 2023. As of June 2023, forward revenue growth is the primary driver of valuation in the public markets. Coefficients measure the slope of the linear relationship between different variables. From December 2021 to June 2022, the relative importance of profitability increased significantly. FCF margin had a larger impact on public multiples than revenue growth in June 2022, as shown by the greater coefficient in the table above. However, the balance has shifted back towards growth as the primary driver of valuation. As of June 2023 revenue growth once again had a larger impact on public multiples than FCF margin. (read more…)
CATEGORY: growth, profitability, SaaS, valuation
August 24, 2023 Pitchbook : Q3 2023 Allocator Solutions: Evaluating Persistence in Fund Performance
Overall, we found that strong performance in a family's prior funds was correlated with strong performance in successor funds to some degree, but that's when looking at the most recent available returns data. To be useful for the allocator's decision to invest, persistency must be predictive at the time a new commitment can be made. The issue―which we and others have found―is that early IRRs are notoriously unreliable indicators of where a fund's performance eventually ends up. At the time the next sequence in the family is fundraising, the predecessor fund is on average only 3.5 years old, leading to a high degree of drift from that time to its final IRR. We find that, after controlling for information on prior fund family returns that was available at the time a successor was fundraising, the predictive power of a GP's track record is near zero. (read more…)
CATEGORY: capital, leadership, VC
August 16, 2023 Superfluid : Why Mega Funds Exist
In 2013, the top decile threshold is 3.58x, meaning for every $1 invested, the best 2013 vintage funds, returned at least $3.58 back, if not more. As you can see, the disparity in TVPI between the top decile and the median is quite substantial between 2013 - 2016. (read more…)
CATEGORY: VC, winner take all
August 14, 2023 Pitchbook : Q2 2023 Public BDC Venture Lender Earnings
At the end of Q2, the 5 BDCs had $1.335BN in available liquidity via cash and credit facilities, a tick up of ~$175M from Q1. Hercules represents 50% of this dry powder, roughly the same share as at the end of Q1. The median investment yield of the 5 venture debt BDCs has increased from 12.4% in Q1 2022 to 16.2% in Q2 2023, an increase of 380 basis point (“bps”), or 3.8%. That’s an ~31% uptick in yield achievement in the span of 6 quarters. The bulk of this increase (290 basis points) occurred in 2022 with a further increase of 90 basis points in 1H 2023. (read more…)
CATEGORY: capital, debt, resilience
August 12, 2023 Pitchbook : Down rounds at a high for US VC since 2017
Dealmaking and valuation figures have stagnated or declined across nearly all VC stages, perpetuated by a lifeless IPO market that continues to trap value. About 15% of all funding rounds completed during the second quarter of the year have been down rounds, the highest quarterly figure since Q4 2017. (read more…)
August 8, 2023 Bessemer Venture Partners : The Cloud 100
The macro background has nonetheless hurt the average Cloud 100 company. For years we saw growth rates increase, but in 2023, the average growth rate for a Cloud 100 company – the 100 best private companies in the world – has been nearly halved. After years of defying gravity and reaching record highs, headwinds eventually caught up with Cloud 100 fundamentals. The average Cloud 100 revenue growth rate fell significantly to 55% within the year, with the growth rate of the top quartile companies falling to 70%, once again reinforcing the extremely challenging year that the world’s best cloud companies had to deal with. (read more…)
CATEGORY: growth, resilience, SaaS
July 26, 2023 SaaStr : What’s the Average Deal Size for SaaS Companies?
- Public SaaS companies that focus on SMBs have an ACV of about $4,800
- Public SaaS companies that focus on mid-market have an ACV of about $40k
- Public SaaS companies that focus on enterprise have an ACV of about $220k