SaaS Capital Blog

Featured

AI Adoption Among Private SaaS Companies and Its Impacts on Spending and Profitability

Since the launch of ChatGPT in late 2022, AI has dominated both discourse and funding dollars in the SaaS industry. With opinions ranging from existential threat to limitless opportunity, we were keen to extend our annual survey to cover several questions on AI in order to glean just how it is being incorporated by private SaaS companies and what the impact has been to date on spend.

Breaking Down Committed Credit Facilities for B2B SaaS

If you’re newer to committed credit facilities, here’s a quick breakdown of how we typically structure them for SaaS companies. It’s not a one-size-fits-all model, but there are some consistent features that make the approach flexible and scalable for recurring revenue businesses.

2025 Benchmarking Metrics for Bootstrapped SaaS Companies

SaaS Capital works with both VC-backed and bootstrapped SaaS companies and has seen the advantages of both approaches. However, one situation that is especially interesting is bootstrapped SaaS companies with $3M to $20M in Annualized Run Rate Revenue (ARR). Growing from a pre-revenue startup to $3M (scale-up phase) marks a significant shift and bootstrapping from $3M to $20M creates enormous value for owners. To help support bootstrappers during their scale-up, we wanted to focus on 2025 benchmarking metrics for scale-up stage bootstrapped SaaS companies.

GRRumbling About Retention Metrics, or, Pitfalls in Measuring SaaS Churn

Revenue retention – whether Gross Revenue Retention (GRR) or Net Revenue Retention (NRR) – is the most prominent SaaS-specific metric in our industry. At its best, retention can quickly paint a picture of the health of a SaaS company and give a useful view of both relative and absolute performance. A major goal with SaaS retention calculations is for you and outside stakeholders to be able to compare your performance meaningfully with other comparables.

2025 Spending Benchmarks for Private B2B SaaS Companies

How much do SaaS companies spend on customer support or marketing? In day-to-day SaaS company operations, questions like the above are common. So, we asked survey takers what percentage of revenue is spent on cost of goods sold, customer support/success, selling costs, marketing costs, research & development, and general and administrative. This post summarizes the benchmarking data.

SaaS Capital AI Update for 2025 Q1

Each February SaaS Capital's annual survey of private B2B SaaS companies attracts more than a thousand responses. Respondents are typically CEOs, CFOs, or key execs. For 2025, we added a few questions about how companies are actually using AI. There was a striking result in AI usage based on the size of the company. Small and bigger companies are approaching AI very differently, in a “barbell” effect where smaller companies have a more extreme approach.

Interest Rates: More to Know Than Just the Headline Number

While private rates in the mid-to-high teens remain elevated compared to the past decade-plus, they are in line with rates for sector peers in the public market. Moreover, from a borrower’s perspective, these rates may actually be considered relatively attractive when one accounts for current US Treasury rates.

2025 Private SaaS Company Valuations

The SaaS Capital Index™ stands at 7.0 times current run-rate annualized revenue. Data for bootstrapped companies yields a predicted private SaaS company valuation multiple of 4.8x while data for equity-backed companies yields a predicted valuation multiple of 5.3x.

How to have a 95% Gross Revenue Retention Selling SaaS to Small Businesses

The article examines the methodology behind ServiceTitan's reported 95% gross revenue retention (GRR) in its IPO documentation, noting that the approach excludes downsells and only accounts for complete churns, which can result in a higher GRR figure. While the 95% figure is impressive, the analysis suggests that a more typical annualized GRR for small businesses in the building trades would likely be lower, aligning with industry norms.

What is the Average Deal Size for Private SaaS Companies?

Due to their compliance reporting requirements, there is plenty of data available about public SaaS companies. However, due to the size and funding of those companies, their metrics are typically not a good benchmarking metric for smaller, private SaaS companies. In order to provide peer-based benchmarking, SaaS Capital conducts a survey of private, B2B SaaS company metrics in the first quarter of each year. This post summarizes benchmarking data around the topic of Annual Contract Value (ACV).