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R&D spend at SaaS companies

by

Sammy Abdullah

The latest IPO’s spend a little more. The latest IPO’s from 2018 to 2020 on average and median spend 28% of revenue on R&D.

The range of spend is wide. Hortonworks and Castlight spent more on R&D than they generated in revenue, with R&D/revenue of 110% and 117% respectively. On the other end, Paycom software spent only 2% of revenue on R&D, and that business did $108mm in revenue prior to IPO. Similarly, Tabula Rasa spent only 2% of revenue on R&D.

sammy@blossomstreetventures.com

Sammy Abdullah

Managing Partner & Co-Founder

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