Private SaaS retention rates are nearly impossible to find. We analyzed private SaaS companies so you understand what companies are the best at retaining their customers while offering them more value over time and what you should expect by taxonomy, revenue levels, and funding round stages.
Some of these SaaS founders retain customers and expand customers better than others. The median? 116%. These revenue retention rates are even more valuable when analyzed next to expansion revenue and churn rates. It is important to remember that net revenue retention captures the negative impact of lost customers, but also the positive impact of increases in prices, up- sells, cross-sells or usage or seat expansion. Would you be surprised to see a customer churn software near the top of the list? If you’re a SaaS founders who is deciding whether or not to take outside capital, your retention rate will be one of th e most scrutinized SaaS metric. For established SaaS companies, net revenue retentions can range between 60% (yikes) to 150% (really good). Early-stage SaaS companies can see even higher numbers. Not all these businesses are treated the same so check out the data to see where you stand.
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83 of the fastest growing companies that also have the most revenue have a clear expansion revenue strategy. On average, sales reps are selling plans where starting contract value is $4,606.
Those same companies employ 1,678 sales reps that carry a quota. The most common compensation plan used by these companies is a 1:5 ratio of sales rep on target earnings (OTE) to quota. Meaning if a rep can earn $200k in base and commissions, quota target for that year is set at 5x, or $1m in new ARR closed.
If you’re going to build a high growth SaaS company, you need to figure out how to scale with quota carrying sales reps.
We can measure this a variety of ways. Which company has the most revenue per employee? What about dollars in revenue compared to dollars raised? What about time, which founder went from $0 to $10m the fastest?
Looking deeper at dollars in revenue compared to dollars raised, bootstrappers take the cake because they self fund (denominator zero). When we look at companies that have raised at least $1m, Actito is the clear winner generating $21m in revenue, growing 100% yoy, on just 1m raised ($.05 dollars raised for every $1 of revenue).
Omnisend comes in a close second with $.08 dollars raised for every dollar of revenue. Doing $19m as of December 2020. Proposify gets honorable mention with $0.46 dollars raised (3.25m) for every dollar of revenue ($7m).
The worst performers here are companies like YayPay with $3.68 dollars raised ($14m) per dollar of revenue ($3.8m). Many of the worst performers just did a round of funding and haven’t had a chance to deploy to drive growth yet. That makes this data less valuable but still illustrative.