YOY growth of 30%. Median and average YOY growth was 30% and 34% respectively. Given the size of these SaaS businesses, that is fantastic growth. However, note that growth is slowing: year over year growth in Q1 2022 was 36% and 41% respectively.
Growing efficiently. Even though these companies generate a loss, they are adding new revenue at a very efficient pace. On median the companies are adding $0.70 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 outstanding. 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 We do not quote the average here ($2.56) because it is skewed by outliers.
Only 53% report their NDR. Of the 67 SaaS companies we follow, only 53% of them (35 companies) report their net dollar retention in their quarterly filing. Nearly none report gross dollar retention.
Adjusted median NDR is 100%. Since only 53% of the SaaS companies we follow actually share their net dollar retention, this data is highly subject to reporting bias whereby some companies with poor net dollar retention simply may not be reporting it. As such, we believe the median net dollar retention of 125% needs to be adjusted down. We do this by assuming those that didn’t report net dollar retention are experiencing NDR of 100% (this may be generous). Assuming the 31 non-reporting companies have NDR of 100%, the median and average net dollar retention of the entire dataset is 100% and 110% respectively. Again, strong numbers.
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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