2021 Private SaaS Company Growth Rate Benchmarks
It’s not difficult to benchmark your SaaS company’s performance against that of public SaaS companies, but it’s also only slightly useful. The sheer scale of public companies makes for an apples-to-oranges comparison to smaller, private companies that do not reveal actionable performance insights.
In the Research Brief linked below, SaaS Capital provides growth rate data from our survey of more than 1,500 private SaaS companies. Top takeaways include:
- SaaS company growth rates slowed from 40% in 2019 to 29.6% in 2020. Thirteen percent of companies were flat or shrank, versus only 2% in 2019.
- Venture capital-backed companies continue to show higher growth than bootstrapped companies but the gap narrowed considerably in 2020, driven by far larger decreases in growth from equity-backed companies than their bootstrapped peers. For example, equity-backed companies with ARR greater than $5 million grew at 29% in 2020 (down from 42% in 2019) while their bootstrapped peers grew at 25% (flat versus 2019).
- Retention proved its value during the pandemic. Companies with gross retention above the median reported growing nearly 50% faster than companies with gross retention below the median.
- SaaS companies targeting a horizontal market are growing slightly faster than companies attacking a vertical industry: 29.4% growth versus 26.1%, respectively.
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