Investors always push their B2B portfolio companies to focus on enterprise accounts. They tend to be stickier, can pay more, upgrade more frequently, and can sign multi-year contracts. On the flip side, the sales cycle is longer and acquisition cost is higher. Do you need to be enterprise focused in order to achieve a great exit? The answer is no. Below are the last 77 SaaS IPO’s and the approximate contract values of their customers.
Median and average. The median contract value is $49k and the average is $227k. Palantir and C3 really skew the data as they have average contract values of $5.9mm and $2.4mm respectively. The median of $49k is thoroughly enterprise, however as you’ll see below, there are plenty of SMB focused firms.
68% are enterprise. We were able to determine SMB or enterprise status of 73 of the companies. We define SMB as any customer paying less than $12k annually. Of the 73 companies, 50 are enterprise focused (68%) and 23 are SMB focused (32%). The data shows that while it may be very attractive to go after enterprise clients, it’s not a pre-requisite to have a great exit.
Thank you for your readership. Visit us at blossomstreetventures.com for more SaaS metrics. Email the author at sammy@blossomstreetventures.com
Enjoyed this post?
Share it using the links below.