Qubit: Iconiq Growth 5 Key Metrics of B2B SaaS
Back in September, Iconiq published a report on the 5 key metrics of top B2B SaaS companies.
Perusing through the slides, you will find that:
YoY ARR growth is 2.0-2.5x after $10m ARR, 1.3x-1.5x after $100m ARR until IPO
Scale ARR growth from $1m to $50m in less than 4 years
Revenue should exceed total spend as they scale to $250m+ ARR
Maintain median runway of 30 months as they scale
Maintain churn rate below 15% regardless of scale
“Through this research, we’ve identified five key metrics we believe are highly representative of a SaaS company’s overall growth and efficiency. While our quantitative evaluation of software businesses is always tailored to the nuances of a company’s industry, product, sales motion, and more, we’ve found the ‘ICONIQ Growth Enterprise Five’ to be consistently strong indicators of a company’s long-term success.”
“YoY ARR growth reveals how quickly and consistently a company is growing and has historically been one of the top two metrics most correlated with SaaS valuations.
We consistently see top-performing SaaS companies double or triple ARR in each of the first two to three years after reaching $10M ARR. These companies also maintain double-digit growth in years four through six as they approach IPO (typically around $200M+ ARR).
This ARR growth is primarily driven by new logos until companies reach about $200M ARR, when customer expansion begins to make up more than half of gross new ARR, making early-stage new logo velocity critical to sustainable growth.”
Source:
The ICONIQ Growth Enterprise Five
Topline Growth & Operational Efficiency
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