Key Takeaways on Growth Rate Benchmarks for SaaS Companies



SaaS Capital has been conducting the industry’s top benchmarking survey in Q1 of each year for nearly a decade. Here, we summarize the findings related to growth rates in our 2021 survey of private SaaS company owners and execs.

Growth is King

The following cannot be overstated:

The single largest determinant of your company’s value is revenue growth.

Growth, therefore, is the most important metric we track in our annual survey of private companies.  It’s not difficult to benchmark your private SaaS company’s performance against that of public SaaS companies, but due to the sheer size of companies within the public data set, the resulting comparison is less than ideal.  (Note: for more on the disparity between private and public company valuations, please see Public-Private Valuation Gap Widens for SaaS Company Multiples.)  Our analysis breaks down the latest trends in growth by company size, funding type, retention, and company age so you can draw more useful comparisons when thinking about your company’s valuation.

Growth Rate by Company Size

2021 Private SaaS Growth Rates

Overall, growth during the pandemic slowed (although growth rates were still strong as compared to other industries), and the results were more variable between companies, as might be expected in a year of unprecedented volatility.

  • Across all categories, the median growth rate decreased from 40% in 2019 to 29.6% in 2020. Thirteen percent of companies were flat or shrank, as compared to just 2% in 2019.
  • Generally, as ARR increases, growth rate decreases. This is due largely to simple math: the bigger the denominator, the tougher to maintain the same result.  In 2020, this relationship did not exist for the company growth rate medians.
  • Again, due to simple math – this time, dividing by a small number – we always see more variability in growth rates exists across very early (sub $1 million ARR) companies. In 2020, variability reached new heights.  The 25th to 75th percentile growth rates for the smallest companies in 2020 ranged from 9% to 173% versus 30% to 120% one year ago.

Growth Rate by Funding Type

In prior years, we have seen higher growth rates in equity-backed companies as compared to their bootstrapped counterparts.  This gap narrowed significantly in 2020 versus 2019.  We also found that bootstrapped companies maintained their year-over-year growth rates while equity-backed companies reported sizable growth rate decreases.

  • Bootstrapped companies grew at a median of 22% in 2020 versus 28% in 2019, while companies that have raised venture capital financing grew at a median of 33% in 2020 versus 55% in 2019. This gap narrowed even more – to within just five percentage points – for companies with greater than $5 million in ARR. Of this data set, the bootstrapped companies grew at approximately the same rate as the prior year, while the equity-backed category lost twenty percentage points from the 2019 median.
  • We think that bootstrapped companies tend to be more stable regardless of the macroeconomic environment, whereas equity-backed companies are more operationally levered, leading to higher variance in results, to both the upside and downside.

Growth Rate and Retention

Higher growth is generally associated with higher retention.  The higher a company’s retention, the easier it is to grow as resources aren’t wasted on replacing lost revenue, an impact that expands on itself year after year.  During the pandemic, companies with strong retention (critical applications) benefited even more, while the inverse was true for companies with weaker retention (less critical tools that could be easily canceled).

  • Median gross retention for all companies was 91%. Companies with less than median retention grew at 23.5%, while companies with greater than median retention grew at 35%.
  • Median net retention for all companies was 99%. Companies below the median grew at 17.4% while companies above the median grew at 42%.
  • Again, 2020 proved a year of particularly high variability among individual companies’ results. Last year, this same analysis showed a difference of just 5% in growth rate between the top half and bottom half of companies by retention.

Growth Rate by Company Age

Our data has shown that growth rates slow as companies get bigger and older.  2020 results show a revenue peak at year 7, likely due to larger companies being acquisition targets.  Related, the median age of a bootstrapped company was 10 years old versus 7 years for equity-backed companies.  Further, very few equity-backed companies are older than 12, probably due to VC fund lifecycles.

We explore these themes, and others, more robustly in 2021 Benchmarking Private SaaS Company Growth Rates, and invite you to download a copy.

Stephanie Fortener

Managing Director, SaaS Capital

SaaS Capital® pioneered alternative lending to SaaS. Since 2007 we have spoken to thousands of companies, reviewed hundreds of financials, and funded 80+ companies. We can make quick decisions. The typical time from first “hello” to funding is just 5 weeks. Learn more about our philosophy.


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