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A report of more than 400 SaaS companies shows best-in-class startups are still growing

It is a fact that startups, regardless of industry, face more hurdles today than they did a year ago. Driven by inflation, the war in Ukraine and other economic headwinds, fears of a recession have strained funding sources that were previously easily accessible.

The consequence? Dramatic cost savings: 22,000 until the end of June workers in the US tech sector were laid off this year, according to a Crunchbase News Count

But not every startup hurts for capital. In a new report capchasea provider of non-dilutive financing instruments, analyzed more than 400 privately held Software-as-a-Service (SaaS) companies that generated between $1 million and $15 million in annual recurring revenue (ARR).


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After comparing their performance to 42 SaaS unicorns that went public in 2020 and 2021, the company concluded that best-in-class SaaS startups are still growing and that the unit economy is reliable predictor of future success.

“At today’s burn multiples, with current cash levels, SaaS companies of all sizes will find it difficult to accumulate rounds at the end of their runway,” Capchase CEO and co-founder Miguel Fernández told londonbusinessblog.com in an email. mail interview. †[But] the outlook for SaaS is still incredibly strong, and those who can weather this storm will turn out to be stronger on the other side.”

“Net retention can have a similar impact on combustion as growth and is usually much more efficient.” Capchase CEO and Co-Founder Miguel Fernández

According to the Capchase report, top SaaS companies handily beat the “rule of 40,” a maxim that suggests that the sum of a company’s ARR growth rate and net margin rate (i.e., profits are generated as a percentage of revenue) should be must be at least 40%. Capchase suggests that successful companies gain at least 80% and skyrocket to over 110% during the growth phase and maintain about 55% even after going public.

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