Fresh Insights

Analyses, Musings & Observations

SaaS Learnings from Gitlab’s Q3

We’re review quarterly filings of successful SaaS businesses to understand what makes them successful. Below are observations from Gitlab’s Q3 report and earnings call which took place Monday (NASDAQ: GTLB). Much of it is verbatim. What they do. GitLab is The One DevOps Platform, a single application that brings together development, security, operations, IT, and…
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Enterprise sales trends in SaaS

Bridge Group is a sales consulting organization focusing on B2B SaaS exclusively. We hold them in very high regard and consider Bridge to be the source for all things enterprise sales. They do strategic assessments, write playbooks, and can also do management training and coaching. We did a Q&A with Kyle Smith at Bridge (ksmith@bridgegroupinc.com)…
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Non-recurring revenue in SaaS

While the value of any SaaS business is derived from recurring revenue (ARR), do not forsake non-recurring revenue streams. If you do, you’re ignoring free financing and a way to make the product stickier. Below is non-recurring data at the time of IPO for the last 73 SaaS companies. 27 out of the 73 broke…
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characteristics of SMB SaaS success – Weave

What does a successful SaaS business look like? Weave is an example (NYSE: WEAV). We dug through WEAV’s latest quarterly filing and below are some of the structural and business practices that make them valuable. What they do. Founded in 2011, Weave is a leading all-in-one customer communications and engagement software platform for small and…
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SaaS best practices for sales, onboarding, CS, and patents

We met with a SaaS business that in our view is operating using best practices. Below some of my notes which you may find helpful for your own SaaS business. Customer Success. At this company, customer success reps are specialized by industry so that they can speak the customer’s language and develop some real domain…
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R&D spend at 140 SaaS companies

Building out, maintaining, and upgrading a technology stack requires a constant commitment to developers and engineers. What is an appropriate level of development or R&D expense for a successful SaaS business? We looked at 140 SaaS IPOs at the time of IPO to get a sense for how successful SaaS businesses allocate to R&D. The…
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Attributes of a great SaaS business – UserTesting

What does a successful SaaS business look like? UserTesting is a great example (NYSE: USER). The company announced on October 27th that it was being acquired by Thoma Bravo for $1.3bln (7.5x LTM revenue). We dug through USER’s latest quarterly filing and below are some of the structural and business practices that make them valuable….
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SaaS Acquisition Multiples at 9x

UserTesting is being acquired by Thoma Bravo which means we have another software M&A comp. Alongside multiples of publicly traded SaaS companies, public SaaS acquisitions are some of the most relevant you can look at for deriving SaaS revenue multiples. These transactions are all cash, the financials are public and audited, and these are all…
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Attributes of a successful SaaS business – Forgerock

What does a successful SaaS business look like? Forgerock is a great example (NYSE: FORG). Market cap stands at $1.8bln and the stock is actually up year to date. We dug through Forgerock’s latest quarterly filing and below are some of the structural and business practices that make them valuable. What they do. Founded in…
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Strategic investors dont matter

Strategic investors, defined as corporations that make venture investments, can be a valuable source of capital but are they critical? No. We dug through the filings of 199 tech companies and found that only 31 of them had a strategic investor (16%). The list is below. Some industries have more prevalence of strategic investment than…
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