HomeAnalysisSapphire Ventures and KeyBanc Capital Markets Private SaaS Company Survey Reveals Pivot...

Sapphire Ventures and KeyBanc Capital Markets Private SaaS Company Survey Reveals Pivot to Efficient Growth and Profitability

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KeyBanc Capital Markets (KBCM), the corporate and investment banking unit of KeyCorp, and Sapphire Ventures, a global software venture capital firm, released results from KBCM’s Technology Group’s 14th annual Private SaaS Company Survey, the benchmarking report by which the SaaS industry measures financial and operating performance.

This year’s survey revealed trends of decelerated growth and a transition towards profitability in 2023. In addition, the report surfaced that sales and marketing could potentially see some lagging effects although, in the near term, there is an overall feeling of optimism in more productive go-to-market (GTM) teams after industry wide-adjustments.

Key trends identified in this year’s report include: 

Among private SaaS companies, only 15 percent of this year’s respondents operated at or above The Rule of 40, a key benchmark of “best-in-class” SaaS company performance, which is calculated by adding a company’s growth rate and profitability margin. Last year, more than one third of respondents noted that they operated at or above The Rule of 40 in 2021, an indication that companies were less efficient with their spending and/or did not achieve their growth targets in 2022.

This year’s survey polled senior executives at more than 100 privately held global SaaS companies with a median 2022 ARR of $25.5 million in several sectors including infrastructure management, fintech, cybersecurity, communications, data infrastructure, vertical market application and horizontal application. To view the full survey results, methodology and to see a deeper analysis of the findings, visit us at http://www.key.com/saassurvey.