We track sales and marketing spend trends of all the SaaS companies that went public since October 2017, starting with MongoDB. The dataset encompasses 72 SaaS companies, of which 60 still trade. S&M spend trends and observations are below.
Unprofitable companies have much faster growth. Profitable companies grew only 9% in 2024 whereas unprofitable ones grew 22% on median. That’s a huge difference and it shows that profitability has a real cost in SaaS. As we’ll show below, there’s a stark contrast in S&M investment between profitable and unprofitable firms — and that investment directly correlates with growth.
Growing S&M spend. The median SaaS company in the data set spent $216mm on S&M in 2024, up slightly from $208mm in 2022. SaaS revenue has grown much faster over that period however; revenue on median was $473mm in 2022 versus $698mm in 2024.
That top-line growth has been driven largely by unprofitable companies which are faster growing; among them median S&M spend jumped from $208mm in 2022 to $298mm in 2024, whereas the S&M spend at profitable companies has actually declined over time ($223mm in 2022 versus $157mm in 2024). Again, profitability and allowing S&M spend to decline has a real cost when it comes to revenue growth.
Percent of revenue varies. For profitable SaaS, the percent of revenue spent on S&M in 2024 was only 28%, down slightly from 32% in prior years. For unprofitable and faster growing SaaS companies, S&M as a percent of revenue was 45% in 2024, down slightly from 50% in 2022. The difference between profitable and unprofitable SaaS companies is dramatic.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com or connect on LI. No AI was involved in the writing of this article.
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