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The last 18 months have ushered in a sea of change for many early-stage SaaS companies. After the highs of 2020 and 2021, most have had to pivot from growth at all costs to focusing on sustainability and profitability instead. For many, it’s their first experience of a prolonged downturn.
That’s why we’re excited to announce that we’ve just published our second annual SaaS Benchmark Report. In it, we analyze the performance of over 900 early-stage B2B SaaS businesses with an ARR between $1m and $15m to better understand what good and great performance looks like in the current economic climate.
Understanding what SaaS excellence looks like in a downturn
When we published our first report just over a year ago, we wanted to provide young B2B SaaS companies with an understanding of how they compare to their peers so that they could fundraise more effectively and better position themselves for success in an increasingly crowded marketplace.
But since then, many have felt the adverse effects of the global downturn, with the news dominated by tech layoffs and worries about the potential of a bubble bursting. So this time around, we wanted to show what sustainable growth looks like and how businesses could chart a route to profitability even during the downturn.
Growth is still possible, but efficiency is key
The results from this report are encouraging: While the strongest businesses are focused on sustainability, they are still growing roughly three times as fast as their peers while maintaining high net margins.
In an uncertain economy, this gives them options: they can choose to double down on growth if the market improves or turn profitable should they need to do so.
Our analysis shows that companies are able to continue growing because they have a clear understanding of which channels and activities have the highest impact. As a result, they’re able to extract the maximum ROI on every dollar invested and cut expenses that aren’t driving performance.
Preparing for long-term success in the face of short-term uncertainty
The fact that SaaS businesses are still finding upside in the current environment is not surprising. The positive outlook for the industry is underpinned by long-term trends in both business and society that favor cloud-based solutions, from remote working to the rise of AI and its application to every facet of our private and professional lives.
This long-term potential for success despite the challenging times is why at Capchase, we’ve chosen to support B2B SaaS businesses through non-dilutive financial products that allow you to grow on your own terms.
It is unclear when the SaaS world will return to high-growth conditions; or whether the slowdown in venture funding is merely a dip, or marks a more permanent correction to a previously overheated market. But what is certain is that businesses that focus on sustainability and understand which levers drive the biggest impact are more likely to be around for the next tech bull market.
We hope that you'll be able to use this report to better understand how your performance stacks up against that of your competitors, and invest in those areas that will enable you to thrive today, and become a market leader tomorrow.
