YOY growth of 21%. Median and average YOY growth was 21% and 21% respectively. Given the size of these SaaS businesses, that is fantastic growth. However, note that growth is slowing: Q4, Q3, Q2, and Q1 medians were 27%, 29%, 30%, and 36% respectively, so growth is slowing.
Growing efficiently. Even though these companies generate a loss, they are adding new revenue at an efficient pace. On median the companies are adding $0.71 of new revenue for every dollar of loss. That means so long as net dollar retention is over 100%, the payback on median is 1.4 years. That’s good. So long as your payback period on new revenue is inside of 2 years and you’re retaining the client forever (100%+ NDR), your investors should be happy to see you burn cash to grow ARR. We do not quote the average because it is subject to skew.
62% report their NDR. Of the 64 SaaS companies we follow, 64% of them (39 companies) report their net dollar retention in their quarterly filing. Nearly none report gross dollar retention.
Comparison to historical data. Below we compare Q3’s median to historical medians we have collected. Note the drop in growth.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at sammy@blossomstreetventures.comhttps://blossomstreetventures.com/metrics/
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