In today’s SaaS landscape, optimizing capital and operating efficiencies is key. Financial models are wonderful tools for understanding how much capital you need to raise (and when) to stay afloat, but external benchmarking is also essential. That’s why the teams at Maxio, a subscription management platform, and SaaS Capital, a SaaS venture debt firm, have joined forces to analyze and present key data points on when private, B2B SaaS companies raise capital, where they get it from, and how much they raise. 

About the data 

The data presented here is primarily derived from original research conducted by SaaS Capital. The research comes from an annual survey of 1,400+ private SaaS companies conducted in Q1  and comprises approximately 20 questions about performance metrics, capital formation, and balance sheet. The annual survey is backward-looking, so the data presented here is based on 2019, pre-COVID-19 data. 

Maxio also presented its own customer data, straight from the platform, to further give context to SaaS Capital’s research. All customer data is completely anonymous and encompasses roughly 750 B2B SaaS companies. 

Finding # 1: 25% of companies surveyed have never raised capital. (SaaS Capital data)

Finding # 2: It takes the average company 4-6 years to reach the $1M in ARR mark (4-5 years if venture-backed). (SaaS Capital data) 

Equity funding proliferation by company age:

image

Finding # 3: Angel investors are the biggest funding source for companies under $1M in ARR. (SaaS Capital data)

Finding # 4: PEs don’t become prevalent until after the $10M in ARR mark, which begs the question, do PE firms have thresholds? (SaaS Capital data) 

Finding # 5: 75% of companies have raised capital fewer than 2.5 times, and 50% have raised fewer than 1.5 times (SaaS Capital data)

Finding # 6: 41% of Maxio customers have raised a Series B, but that represents only 26% of total capital raised  (Maxio data)

image

Finding # 7: Maxio customers raised $13.3 million on average in their Series B. (Maxio data)

Finding # 8: Of companies that have raised equity, 50% have runway for the foreseeable future, 50% have less than two years of runway, and ~25% have less than one year (SaaS Capital data) 

image

Finding # 9: 95% of Maxio customers are VC backed.

For additional findings and context on the data presented here, watch the joint webinar hosted by SaaS Capital Managing Director Rob Belcher and Maxio CEO Tim McCormick. 

For ongoing insights into SaaS capital and operating efficiency, check out  SaaS Capital’s 2020 Private SaaS Company Growth Rate Benchmarks.