OpenView 2019 SaaS Benchmarks Report PDF

2019
EXPANSION SAAS
BENCHMARKS
SEAN FANNING & KYLE POYAR
View the interactive report at saasbenchmarks.com
OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView Advisors, LLC. All Rights Reserved 1
TABLE OF CONTENTS
Features:
1 2 3 4
Participant Executive PLG Insights
Introduction
Overview Summary & Founder
Priorities
6 7 8
Financial &
5
Go-to-Market Pricing Operating Talent
Insights Insights Insights Insights
INTRODUCTION
Objective data is critical to making the right The 2019 survey revealed surprising insights about
strategic decisions that can propel your long-term the adoption of product led growth (PLG) - a go-to-
growth. For this reason, we’re releasing the results market strategy that underpins some of today’s most
of our third annual Expansion SaaS Benchmarks successful businesses. While most companies are still
survey. This report was designed specifically to in the experimentation phase, those who’ve
enable operators to compare themselves against mastered product led growth are exhibiting faster
their exact peers across the metrics that matter most growth at scale while maintaining efficient customer
in a SaaS business. This year’s survey was live from acquisition. We’ve also covered topics ranging from
May - June 2019. There were 639 respondents top concerns for founders, performance by
(~70% of participants were CEOs, CFOs, or VPs of company headquarter region, progress on
Finance at their respective company) across a executive diversity and much more.
range of geographies and software types.
THANKS TO OUR SURVEY PARTNERS
PARTICIPANT OVERVIEW
DISTRIBUTION BY ARR DISTRIBUTION BY GEOGRAPHY
9% 6%
7%
11% 26%
11%
13%
56%
14% 20%
27%
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M US Europe Canada APAC Other
Source: 2019 OpenView SaaS Metrics Survey, N=639.
DISTRIBUTION BY DISTRIBUTION BY
S O F T WA R E C A T E G O R Y TA R G E T C U S T O M E R S I Z E
5%
8%
Enterprise (>1,000 employees) 45%
38%
Midmarket (101-1,000 employees) 54%
SMB (20-100 employees) 36%

48%
Very small business

16%
(VSB, <20 employees)
We sell to a consumer market 6%

Vertical application Horizontal application
Infrastructure / developer software Other

EXECUTIVE SUMMARY
COMPANY PERFORMANCE BENCHMARKS
SIZE AND GROWTH
Employees Number of full-time equivalent employees at the end of 2018.
Funding Amount of equity capital raised to date.
Annual Recurring Revenue (ARR) Company annual recurring revenue (ARR) scale at the end of 2018.
YoY Growth Rate Change in annual recurring revenue at the end of 2018 vs. 2017.
FINANCIAL
Sales & Marketing Spend Spending on sales & marketing, including headcount, as a % of year-end 2018 ARR.
R&D Spend Spending on R&D, including headcount, as a % of year-end 2018 ARR.
Software Revenue Revenue derived from subscriptions as a percent of total 2018 revenue.
Monthly Burn Rate (in 000’s) Net monthly operating cash burn rate basis at the end of 2018 (total $ lost each month, negative values = profit).
SAAS VALUE DRIVERS
CAC Payback (months) Months of subscription gross margin to recover the fully loaded cost of acquiring a customer.
Logo Retention Annual logo retention seen in cohorts.
Net Dollar Retention Annual net dollar retention (after churn, upsells & expansion) seen in cohorts.
DIVERSITY
Women in Leadership % of female representation among employees Director-level and above.
HOW TO READ THESE SLIDES
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
SIZE AND GROWTH
Employees 8 (4-15) 25 (14-40) 47 (30-70) 100 (77-149) 180 (147-269) 555 (385-752)
Funding $3M ($1-3M) $3M ($3-9M) $8M ($3-15M) $28M ($15-43M) $63M ($31-88M) $88M ($28-100M)
YoY Growth Rate 80% (15-125%) 80% (30-165%) 50% (30-100%) 42% (22-78%) 40% (20-61%) 29% (10-40%)
FINANCIAL
Sales & Marketing Spend 30% (15-50%) 30% (20-46%) 35% (20-50%) 40% (24-58%) 42% (31-55%) 38% (15-48%)
Rows represent common KPIs across
R&D Spend 50% (30-80%) 48% (30-60%) 30% (20-41%) 30% (22-39%) 30% (20-40%) 20% (15-30%)
Subscription Revenue 90% (59-100%) categories

93% (85-100%)including size and growth,
90% (80-100%) 90% (80-95%) 94% (80-98%) 90% (80-98%)
Monthly Burn Rate ($ in 000s) $50 ($50-175) financial, value drivers,

$50 ($50-175) and diversity
$175 ($0-375) $375 ($50-625) $375 ($0-1,025) $50 ($<0-1,063)
SAAS VALUE DRIVERS
CAC Payback (months) 5 (2-11) 8 (5-11) 11 (8-15) 15 (11-21) 15 (8-15) 15 (3-15)
Logo Retention 90% (75-100%) 90% (78-98%) 90% (80-95%) 88% (80-95%) 89% (75-95%) 88% (80-94%)
Net Dollar Retention 100% (83-106%) 100% (82-113%) 100% (90-110%) 95% (90-105%) 102% (96-110%) 97.5% (89-101%)
DIVERSITY
Women in Leadership 10% (0-33%) 25% (0-40%) 20% (10-33%) 25% (19-39%) 25% (20-40%) 29% (16-43%)
Note: Companies are not in the top quartile for all metrics. A top quartile grower at a particular ARR scale may also be in the bottom quartile for that ARR scale in other financial, SaaS value drivers, or diversity metrics.
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
SIZE AND GROWTH
Employees 8 (4-15) 25 (14-40) 47 (30-70) 100 (77-149) 180 (147-269) 555 (385-752)
YoY Growth Rate 80% (15-125%) 80% (30-165%) 50% (30-100%) 42% (22-78%) 40% (20-61%) 29% (10-40%)
FINANCIAL Columns represent distribution of

Sales & Marketing Spend 30% (15-50%) 30% (20-46%) 35% (20-50%)from 40%
responses companies
(24-58%) varying
at 42% (31-55%) 38% (15-48%)
R&D Spend 50% (30-80%) 48% (30-60%) 30% (20-41%) 30% (22-39%) 30% (20-40%) 20% (15-30%)
levels of ARR, from <$1M to >$50M
Subscription Revenue 90% (59-100%) 93% (85-100%) 90% (80-100%) 90% (80-95%) 94% (80-98%) 90% (80-98%)
Monthly Burn Rate ($ in 000s) $50 ($50-175) $50 ($50-175) $175 ($0-375) $375 ($50-625) $375 ($0-1,025) $50 ($<0-1,063)
SAAS VALUE DRIVERS
Logo Retention 90% (75-100%) 90% (78-98%) 90% (80-95%) 88% (80-95%) 89% (75-95%) 88% (80-94%)
DIVERSITY
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
SIZE AND GROWTH
Employees 8 (4-15) 25 (14-40) 47 (30-70) 100 (77-149) 180 (147-269) 555 (385-752)
YoY Growth Rate 80% (15-125%) 80% (30-165%) 50% (30-100%) 42% (22-78%) 40% (20-61%) 29% (10-40%)
FINANCIAL
R&D Spend 50% (30-80%) Each

48% (30-60%) cell
30%represents
(20-41%) 30%median
the (22-39%) 30% (20-40%) 20% (15-30%)
performance of a company, as well as
the range (bottom quartile – top quartile) of
SAAS VALUE DRIVERS
CAC Payback (months) 5 (2-11) 8 (5-11)each metric at each respective

11 (8-15) 15 (11-21) ARR scale
15 (8-15) 15 (3-15)
Logo Retention 90% (75-100%) 90% (78-98%) 90% (80-95%) 88% (80-95%) 89% (75-95%) 88% (80-94%)
DIVERSITY
SAAS METRICS BY COMPANY ARR
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
SIZE AND GROWTH
Employees 8 (4-15) 25 (14-40) 47 (30-70) 100 (77-149) 180 (147-269) 555 (385-752)
YoY Growth Rate 80% (15-125%) 80% (30-165%) 50% (30-100%) 42% (22-78%) 40% (20-61%) 29% (10-40%)
FINANCIAL
R&D Spend 50% (30-80%) 48% (30-60%) 30% (20-41%) 30% (22-39%) 30% (20-40%) 20% (15-30%)
SAAS VALUE DRIVERS
Logo Retention 90% (75-100%) 90% (78-98%) 90% (80-95%) 88% (80-95%) 89% (75-95%) 88% (80-94%)
DIVERSITY
SAAS METRICS BY MOST RECENT FUNDING
Angel / Seed Series A Series B Series C Series D or Later
SIZE AND GROWTH
Employees 15 (7-33) 49 (30-79) 93 (57-121) 147 (120-194) 268 (140-440)
Funding $3M (0.5-3M) $8M (3-15M) $28M (15-42M) $43M (28-63M) $88M (48-100M)
Annual Recurring Revenue (ARR) $0.5M ($0.5-2M) $4M ($2-8M) $8M ($7-13M) $17M ($13-25M) $40M ($18-63M)
YoY Growth Rate 80% (36-150%) 75% (35-161%) 80% (50-104%) 45% (24-80%) 33% (21-44%)
FINANCIAL
Sales & Marketing Spend 33% (20-50%) 35% (20-59%) 45% (30-60%) 40% (30-54%) 42% (27-50%)
R&D Spend 40% (30-60%) 40% (25-59%) 30% (22-50%) 30% (21-40%) 30% (21-39%)
Subscription Revenue 95% (80-100%) 92% (80-100%) 95% (80-100%) 90% (80-97%) 91% (82-98%)
Monthly Burn Rate ($ in 000s) $50 ($50-175) $175 ($50-375) $375 ($375-750) $375 ($50-1,063) $375 ($50-1,250)
SAAS VALUE DRIVERS
CAC Payback (months) 7 (4-10) 10 (5-15) 15 (10-15) 15 (10-21) 15 (10-15)
Logo Retention 90% (75-97%) 90% (75-96%) 84% (80-95%) 88% (75-90%) 89% (80-92%)
Net Dollar Retention 100% (80-110%) 103% (95-114%) 100% (90-110%) 98% (88-106%) 100% (90-105%)
DIVERSITY
Women in Leadership 20% (0-33%) 20% (10-34%) 20% (15-40%) 25% (20-36%) 29% (14-35%)
PRODUCT LED GROWTH
INSIGHTS
WHAT IS PRODUCT LED GROWTH?
Product led growth (PLG) is a business strategy where product

usage serves as the primary driver of user acquisition,
conversion and expansion.
PLG is employed by many of the fastest growing software

companies including standout public companies.
PRODUCT LED GROWTH IS YOUR
SECRET WEAPON
E vo lutio n o f P ublic P LG C o mp a nie s S ince 2012
ADOPTION OF PRODUCT LED GROWTH
STRATEGIES
PLG All Most companies are
Companies Companies experimenting with PLG but
Free trial offering 74% 45% relatively few have gone ‘all in’
(just 33% of respondents report
Product analytics for decision making 67% 31%
PLG being fundamental to their
Self service buying experience 61% 28% business).
Bottoms-up sales 55% 31%
Free trials remain the most
Product qualified leads 53% 29%
popular product led growth
Referral programs 50% 31%
strategy. Freemium – while much
Dedicated growth FTEs 47% 27% discussed – has only been
Freemium offering 38% 18% adopted by 18% of companies.
Source: 2019 OpenView SaaS Metrics Survey, N=639. PLG Companies defined as those leveraging more than
three of the PLG strategies surveyed.
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18
PRODUCT LED GROWTH BY TARGET
CUSTOMER SEGMENT
% o f re sp o nde nts PLG Non-PLG Product led growth is especially
prevalent among companies
targeting VSB/SMB customers.
52%
58%
64% That said, 1 in 4 companies
75%
targeting large enterprises also
employ PLG tactics – PLG is for
the enterprise, too.
48%
42%
36%
25%
VSB SMB Midmarket Enterprise

Ta rge t S e gme nt
three of the 9 PLG strategies surveyed.

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PRODUCT LED BUSINESSES GROW FASTER
AT SCALE
Me dia n Gro wth Ra te PLG companies grow slowly in the
PLG Non-PLG very early days, as it takes time to
120% build a community of free users and
convert those users to paying
100%
customers.
80%
After $10M in ARR, the magic of
60%
PLG kicks in and these companies
can scale faster. They aren’t as
40%
limited by their ability to hire,
20% onboard and feed leads to
enterprise sales reps and they’ve
0%
built up significant goodwill from
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
their users.
three of the 9 PLG strategies surveyed.
ARR S ca le

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WHAT KEEPS FOUNDERS UP
AT NIGHT?
DISTRIBUTION OF FOUNDER AGE
P erce nta ge o f Re sp o nde nts Three-quarters of founders were

47% between 30-49 years old when
they founded their company.
It takes more reps and time at

28%
the helm to gain the experience
19% required to lead a software
company and confidence to
6%
make the right investments in
order to create shareholder
value.
Younger than 30 30-39 40-49 50 or older

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TOP FOUNDER CONCERNS
56% We learned that only two things

50%
really matter at the end of the
day: product execution and
37%
GTM execution.
26%
22% 23%
21%
19% These were founders’ top two
16%
concerns regardless of
company size with just one
exception (hiring was the #1
priority for those with $1-2.5M in
ARR).

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FOUNDER CONCERNS BY COST OF REGION
High Cost Low Cost Product and GTM execution

35%
33%
concerns persist regardless of
region, but founders in low cost
30%
28%
regions are able to commit
24%
25% more time towards these issues.
19%
20%
These founders are less worried
15%
about keeping the lights on –
10% they’re 32% less concerned
about fundraising and 27% less
5%
worried about cash burn.
0%
Fundraising Burning too much cash
Note: High cost regions include Bay Area, Seattle, Denver / Boulder, Austin, New York, Boston, and D.C. Metro area.
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GROWTH RATES BY FOUNDER AGE
Yo Y Gro wth Ra te Founders over 30 years of age

137%
140% operate companies that perform
better. They may not capture
120%
headlines, but these founders
100%
83%
see 65% higher growth and
80% 45% less monthly cash burn than
60% their younger peers.
40%
20%
0%
Younger than 30 30 or older

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GO-TO-MARKET INSIGHTS
GROWTH RATE BY COMPANY ARR
Gro wth Ra te (Annua l) SaaS companies grow rapidly in

Median Top Quartile 2018 Median the early stages – a typical
175% company doubles YoY and a top
150% quartile company nearly triples.
125%
Revenue growth tends to decrease
100%
as companies approach $10M in
75% ARR.
50%
Growth rates are relatively
25%
unchanged compared to 2018
0%
despite increased fundraising and
Less than $1M $1-2.5M $2.5-10M $10-20M $20-50M More than
$50M burn levels (more on that later).
ARR S ca le

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SALES AND MARKETING SPEND BY ARR
S a le s a nd Ma rke ting S p e nd (% o f ARR) Sales and marketing spend are

a SaaS company’s largest areas
Bottom Quartile Median Top Quartile
70% of spend after they hit $2.5M of
60% ARR, before that it is R&D.
50%
40% Sales and marketing spend
30% peaks when companies are
20% scaling through Series C / D –
10% watch out for inefficiency in
0% spend and rising CAC Payback

<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
without corresponding
ARR S ca le improvements in growth.

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SALES AND MARKETING SPEND BY
DOMINANT SALES CHANNEL
S a le s a nd Ma rke ting S p e nd (% o f ARR) Median sales and marketing
spend is highest for companies
primarily generating revenue
70%
through inside sales.
60%
50%
Best-in-class companies selling
40%
primarily through self service
30%
and freemium can bring sales
20%
and marketing spend below
10%
20% of ARR.
0%
Self service Freemium Inside sales Field sales Indirect
D o mina nt S a le s C h a nne l 1
1. Dominant sales channel accounts for >50% of ARR.
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DOMINANT SALES CHANNEL1 BY
CUSTOMER TYPE
S a le s C h a nne l Mix (% o f ARR) Inside sales is the most popular
sales channel in SaaS and is
16% 16% 16%
21% used to reach customers of all
sizes, even very small
15% businesses.
22% 32% 47%
16%
12%
Make sure sales channels are
supported by your average deal
38% 40% 42%
32% size (do you make enough to
pay competitive sales
VSB SMB Midmarket Enterprise commissions?) and how your
Inside sales Field sales Self service Freemium Indirect Mixed
customers prefer to buy.
Ta rge t C usto mer Typ e
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MONTHS TO RECOVER CAC (CAC PAYBACK)
C AC P a yba ck in Mo nth s 1
CAC payback lengthens when
Top Quartile Median Bottom Quartile companies achieve greater ARR
25 scale – watch out for worsening
your go-to-market efficiency as
20
you grow.
15
In our opinion, companies are
10 still under-reporting their true
CAC Payback period. Be sure
5 your payback is fully loaded
(including overhead like rent)
0
$1-2.5M $2.5-10M $10-20M $20-50M >$50M
and that it is gross margin
affected.
ARR S ca le
1. Excluded companies <$1M ARR because they don’t have enough data for predictable CAC payback..

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DISTRIBUTION OF AE QUOTAS
P erce nt o f Re sp o nde nts Median rep quota was between

$500k-750k, but there’s
26%
significant variance across
22% companies. See next page for
18%
summary of quota by target
15%
customer segment.
13%
5%
<$250k $250k-500k $500k-750k $750k-1M $1M-1.5M >$1.5M

AE Quo ta s

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DISTRIBUTION OF AE QUOTAS BY TARGET
CUSTOMER SEGMENT
Ta rge t C usto mer S e gme nt Reps’ quotas generally increase
with the size of a company’s
VSB 54% 26% 11% 7%
target customers.
1 in 3 enterprise AEs has a

SMB 36% 35% 15% 7% 7%
quota in excess of $1M,
compared to less than 1 in 10
Midmarket 19% 23% 21% 21% 17%
for VSB/SMB reps. Make sure
that reps are “paying for
Enterprise 13% 11% 22% 22% 32% themselves” – a quota of 5x OTE
is a safe rule of thumb per other
<$250k $250k-500k $500k-750k $750k-1M >$1M studies.
AE Quo ta

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PRICING INSIGHTS
PRIMARY PRICING METRIC
D istributio n o f Re sp o nde nts Charging based on users is still

the primary approach for
10% software companies.
16%
Company size
4%
Relative to last year, we’re
Usage-based
seeing an increase in the
Seats or user-based number of companies that
29% charge based on company size.

Performance-based
41%
Other

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PRIMARY PRICING METRIC
S o f twa re C a te go ry As with 2018, horizontal
Infrastructure / applications keep to the course

developer software 9% 34% 34% 13% 9%
of user-based pricing paved by
SaaS bellwethers like Salesforce.
Horizontal
application 16% 28% 44% 9%
Similarly, we’ve continued to

Vertical observe more openness to
newer pricing models (usage-
based) amongst infrastructure
Other 10% 30% 35% 10% 15%
software vendors, led by the
success of AWS.
Company size Usage-based Seats or user-based Performance or success-based Other
Re sp o nse s

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PRICING CHANGES
3 in 5 of companies surveyed
changed their pricing last year
Yes, multiple times with 1 in 5 changing pricing
20%
Yes, once multiple times.
No 40% Pricing changes are generally

extremely impactful to growth,
gross margin and profitability –
see next slide for more detail.
40%

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IMPACT OF PRICING CHANGES ON ARR
GROWTH
D istributio n o f Re sp o nde nts Among the companies that
1%
changed pricing, just 1%
Decrease
9%
0-9% increase expected ARR to decrease as a
17%
10-24% increase result.
25-49% increase 14%
50-99% increase
By contrast, the median impact
100%+ increase
of a pricing change was more
than 25% increase in ARR
23% growth.
36%

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ACV BY TARGET CUSTOMER TYPE
There’s a strong correlation

VSB 31% 45% 12% 9% between target customer size,
sales channel and ACV.
SMB 11% 50% 25% 7% 7%

Take a close look at your ACV
and target market to understand
Midmarket 20% 47% 26% 5% whether you’re on track to build
an enduring business (pro tip:
stop selling Enterprise deals for
Enterprise 8% 41% 40% 11%
<$25k).
<$1k $1k-10k $10k-50k $50k-250k Other
Re sp o nse s

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ACV BY DOMINANT SALES CHANNEL
D o mina nt S a le s C h a nne l 1 No-touch channels like self

service and freemium generally
Self service 27% 35% 17% 6% 15%
start with smaller initial ACVs as
Freemium 64% 14% 7% 14%

individual users or teams get
familiar with the product – once
Inside sales 39% 43% 14% companies get a “foot in the
door” there can be significant
Field sales 11% 31% 40% 15%
potential for expansion.
Indirect 29% 12% 29% 6% 24%
<$1k $1-10k $10-50k $50-250k >$250k
Re sp o nse s
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ACV BY SOFTWARE TYPE
S o f twa re C a te go ry As in prior years, infrastructure /
Infrastructure /
developer software companies
developer software 6% 13% 34% 47%
continue to achieve the highest
ACV levels – usage-based
Horizontal
application 8% 29% 34% 29% pricing models in particular can
drive further ACV expansion.
Vertical
Other 20% 10% 45% 25%
<$1k $1k-10k $10k-50k >$50k
Re sp o nse s

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FINANCIAL & OPERATING
INSIGHTS
PERCENT REVENUE FROM SUBSCRIPTION
BY TARGET CUSTOMER TYPE
Companies targeting smaller
customers earn a greater share
100%
of their revenue from
95% subscriptions.
90%
Companies selling to enterprise
85% customers generally layer
services on top of subscriptions.
80%
Per research on public SaaS
75% company valuation, revenue is
treated equal so long as more
70%
than 80% comes from
subscriptions.
Re sp o nse s
Source: 2019 OpenView SaaS Metrics Survey, N=639

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GROSS MARGIN ON SUBSCRIPTIONS
Gross margin is a key and often

overlooked lever in any business
11%
19% – more than half of companies
surveyed have gross margins in
excess of 70%. Best-in-class
6%
27%
companies across all ARR scales
see gross margins of at least
11%
80%.
As a reminder, gross margin

26%
should always include hosting,
<50% GM 50-59% GM 60-69% GM 70-79% GM 80-89% GM 90%+ GM

as well as any services and
customer onboarding costs.

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LOGO RETENTION RATES
Lo go Re te ntio n Ra te s (Annua l) Top tier companies see logo

retention rates of at least 85%.
11%
Be careful of accelerating your
6% sales and marketing spend if
35%
you have a churn problem!
21% Median retention rates do differ

depending on deal size:
• <$1k: 71%
• $1-5k: 83%
27% • $5k-25k: 90%
• $25k-100k: 90%
<65% retention 65-74% retention 75-84% retention
85-94% retention >=95% retention • $100-250k: 93%

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NET DOLLAR RETENTION RATES
N e t D o lla r Re te ntio n Ra te s (Annua l) About 1 in 3 companies

surveyed reported net dollar
10% 11%
retention over 105% and 1 in
9%
9% 10 reported NDR over 125%.
Net dollar retention tells the

15%
16% whole story about what is
happening within your customer
base and should be tracked at
the cohort level to visualize
31%
trends over time.
<75% 75-84% 85-94% 95-104% 105-114% 115-124% >=125%

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NET RETENTION BY TARGET CUSTOMER
TYPE
N e t D o lla r Re te ntio n Ra te s (Annua l) Net retention is considerably
Bottom Quartile Median Top Quartile higher for companies targeting
115%
midmarket or enterprise
110%
companies than for those
105%
targeting VSB/SMB companies.
100%
95% Regardless of segment, a

90% competitive NDR rate lies
85% between 100% and 110%.
80%
75%
Ta rge t C usto mer Typ e


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RETENTION RATES VS. GROWTH
Re te ntio n Ra te s (Annua l) The ability to expand new

Avg. Logo Retention Avg. NDR customers facilitates rapid
120
108%
growth. The fastest growing
94% 96% companies see >100% net

100
85%
82%
86% dollar retention.
80
60 For comparison, median net

dollar retention for public
40
companies was 107% (at the
20 time of S-1 filing).
0
<30% Growth 30-100% Growth >=100% Growth
Source: 2019 OpenView SaaS Metrics Survey, N=639. Annua l Gro wth Ra te
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48
RESPONSIBILITES OF CUSTOMER SUCCESS
P erce nt o f Re sp o nde nts Less than 1 in 10 of the

80% companies surveyed lacked a
73%
69%
70% customer success team – these
59%
60% teams are primarily tasked with
52%
50% managing retention.
40%
30% Upsell and expansion are less
20% common for CS to own and
10%
8% companies are split on whether
0%
CS, sales or a hybrid resource
N/A - we don't Upsell / expansion Engagement / Onboarding Retention / owns expansion.
have a customer product usage renewals
success team.
Re sp o nse s

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49
METHODS OF TRACKING CUSTOMER HEALTH
P erce nt o f Re sp o nde nts Most companies surveyed are

60%
utilizing product engagement
52%
50% data to track customer health –
43% 43%
this is beginning to become
40% 38%
table stakes when it comes to
29%
30% understanding your users.
20%
11%
Nearly 9 in 10 companies
10%
reported efforts to measure
0% customer health.
We don’t track In-app NPS One-off NPS Customer Customer Product
or measure surveys surveys satisfaction health scores engagement
customer health scores
Re sp o nse s

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50
EQUITY CAPITAL RAISED BY ARR
ARR S ca le Companies are raising more equity

capital at earlier stages – double
<$1M 79% 10% 6%
the number of companies between
$1-2.5M 55% 20% 18% 7%

$2.5-10M and $10-20M of ARR
have raised >$50M vs. 2018.
$2.5-10M 28% 25% 23% 17% 5%
This coincides with the rise of VC

$10-20M 10% 11% 13% 51% 15%
growth funds, mega-rounds and
$20-50M 6% 8% 32% 53% record-breaking VC fund sizes as
well as PE firms diversifying
>$50M 12% 12% 12% 65%
strategies in order to deploy
0% 20% 40% 60% 80% 100% capital. As companies raise more
< $5M $5-10M $10-20M $20-50M >$50M capital, it is no surprise burn has
increased (see next slide).
E q uity C a p ita l Ra ise d D ist.

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51
MONTHLY CASH BURN
Mo nth ly C a sh Burn ($000’s)
Armed with record amounts of
2019 Median 2018 Median
cash, SaaS companies are
$400
burning far more than last year.
$350
$300 For companies with $10-20M in

$250 ARR, median burn is $375k per
$200 month (up from $183k) and the
$150
highest quartile is now burning
$625k per month.
$100
$50
Burn rates have increased the
$0
most among companies with
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
$20-50M in ARR.
Source: 2019 OpenView SaaS Metrics Survey, N=639 ARR S ca le

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52
CASH BURN AND GROWTH BY COST OF
REGION
Companies headquartered
Average Growth Rate Monthly Operating Cash Burn
outside of tech meccas perform
105% $1,000
as well or better. In fact, the best
$900
Monthly Operating Cash Burn

$875k $800
companies are growing 20%
99%
Growth rate (annual)
$700 faster and realize 20-30%

95%
$600 greater sales efficiency at scale.
$500
$400 Startups in high-cost regions

85% $375k $300
84%
burn 133% more than their
$200
peers in low-cost areas.
$100
75% $0
Low Cost Region High Cost Region

Note: High cost regions include Bay Area, Seattle, Denver / Boulder, Austin, New York, Boston, and D.C. Metro area.
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53
TALENT INSIGHTS
NUMBER OF EMPLOYEES BY ARR SCALE
N umber o f E mp lo ye e s In the early stages, companies

Bottom Quartile Median Top Quartile have one employee for every
800 $100,000 in ARR. As companies
700 scale to $20M, that figure jumps
600 to $150,000. Best-in-class is
500
$200,000+.
400
On average, 31% of employees
300
are in Engineering and another
200
20% are in Sales. The next
100
largest functions are Customer
0
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M Success (15%) and Product
(11%).
ARR S ca le

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55
MIX OF EMPLOYEES BY FUNCTION, BY
ARR SCALE
ARR S ca le At the early stages, most startup
employees are in Product &
<$1M 40% 14% 10% 17% 9% 10%
Engineering roles.
$1-2.5M 36% 11% 10% 17% 15% 11%
As companies expand, they

$2.5-10M 29% 10% 8% 21% 17% 14%
need to rapidly grow Customer
$10-20M 26% 10% 9% 21% 17% 17% Success and specialized
functions, such as Recruiting and
$20-50M 24% 11% 9% 21% 18% 17%
Finance.
>$50M 29% 11% 8% 21% 14% 16%
Engineering Product Marketing Sales Customer Success Other
FT E Mix by Functio n
Source: 2019 OpenView SaaS Metrics Survey, N=420. Other includes Finance, Ops, HR, Talent.

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56
MIX OF EMPLOYEES BY FUNCTION,
BY DOMINANT SALES CHANNEL
ARR S ca le Companies leveraging self
service or freemium channels
Self service 34% 14% 14% 13% 15% 9%
commit a greater proportion of
Freemium 41% 21% 12% 10% 10% 6% their resources to engineering

and product – this is particularly
Inside sales 30% 10% 9% 22% 16% 12%
evident in PLG companies who
Field sales 33% 11% 7% 19% 14% 15% rely on organic strategies and
product awareness to drive
Indirect 34% 7% 6% 18% 17% 19%
inbound demand.
Mixed 32% 12% 10% 19% 14% 13%
Engineering Product Marketing Sales Customer Success Other
FT E Mix by Functio n
Source: 2019 OpenView SaaS Metrics Survey, N=420. Other includes Finance, Ops, HR, Talent.
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57
FEMALE-LED TEAMS PERFORM BETTER, BUT
RAISE LESS CAPITAL
While female-led teams
Growth Rate Equity Capital Raised
outperform their peers (faster
125% $20M
growth), they are doing so with
E q uity C a p ita l Ra ise d

Gro wth Ra te (Annua l)
$19M
115% far less capital ($11M vs. $19M)
115% $15M
and they’re 50% more likely to
105% report fundraising as a concern.
$11M $10M
95% 99%
$5M
85%
75% $0M
50% or more female Less than 50% female

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58
PROGRESS ON GENDER EQUALITY
Larger companies continue to fare

slightly better when it comes to
gender diversity within
management teams but after
notable progress in 2018, we’re
seeing stagnation this year.
38% of respondents had one or

more female BoD member, which is
nearly unchanged from last year
(albeit up from 2017). Meanwhile,
still 8% had gender parity on the
BoD and 14% had parity among
their leadership team.
ARR

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59
ABOUT THE AUTHORS
KYLE POYAR
VP, Market Strategy
Kyle helps OpenView’s portfolio companies

accelerate top-line growth through deep insights
into their market landscape and customers. He
leads segmentation, positioning, channel/partner
strategy, new market entry and packaging/pricing
initiatives, partnering closely with portfolio
leadership teams.
kyle@ov.vc @poyark /kyle-poyar
SEAN FANNING
Director of Corporate Development
Sean supports corporate development at

OpenView, including helping the firm’s portfolio
establish strategic relationships with potential
alliance partners and acquirers, advising on and
executing M&A and capital raise transactions,
supporting portfolio exit planning activities, and
communicating trends across M&A, PE, and public
markets. He also supports various projects for
OpenView's Go-To-Market team.
sean@ov.vc @seandougfan /seandfanning
THE EXPANSION STAGE SOFTWARE VC
Our mission is to improve people’s

working lives.
We do this by:
• Investing in the best software
companies
• Helping our portfolio companies
accelerate growth and become
market leaders
Learn more at ov.vc

THANK YOU!

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2019

View the interactive report at saasbenchmarks.com

Source: 2019 OpenView SaaS Metrics Survey, N=639.

SMB (20-100 employees) 36%

Very small business

We sell to a consumer market 6%

Infrastructure / developer software Other

Employees Number of full-time equivalent employees at the end of 2018.

Funding Amount of equity capital raised to date.

R&D Spend Spending on R&D, including headcount, as a % of year-end 2018 ARR.

SAAS VALUE DRIVERS

Logo Retention Annual logo retention seen in cohorts.

Women in Leadership % of female representation among employees Director-level and above.

SIZE AND GROWTH

Subscription Revenue 90% (59-100%) categories

Monthly Burn Rate ($ in 000s) $50 ($50-175) financial, value drivers,

SAAS VALUE DRIVERS

CAC Payback (months) 5 (2-11) 8 (5-11) 11 (8-15) 15 (11-21) 15 (8-15) 15 (3-15)

SIZE AND GROWTH

FINANCIAL Columns represent distribution of

SAAS VALUE DRIVERS

CAC Payback (months) 5 (2-11) 8 (5-11) 11 (8-15) 15 (11-21) 15 (8-15) 15 (3-15)

SIZE AND GROWTH

R&D Spend 50% (30-80%) Each

CAC Payback (months) 5 (2-11) 8 (5-11)each metric at each respective

SIZE AND GROWTH

SAAS VALUE DRIVERS

CAC Payback (months) 5 (2-11) 8 (5-11) 11 (8-15) 15 (11-21) 15 (8-15) 15 (3-15)

Source: 2019 OpenView SaaS Metrics Survey, N=639.

SIZE AND GROWTH

Employees 15 (7-33) 49 (30-79) 93 (57-121) 147 (120-194) 268 (140-440)

SAAS VALUE DRIVERS

CAC Payback (months) 7 (4-10) 10 (5-15) 15 (10-15) 15 (10-21) 15 (10-15)

Product led growth (PLG) is a business strategy where product

PLG is employed by many of the fastest growing software

E vo lutio n o f P ublic P LG C o mp a nie s S ince 2012

VSB SMB Midmarket Enterprise

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

P erce nta ge o f Re sp o nde nts Three-quarters of founders were

It takes more reps and time at

Source: 2019 OpenView SaaS Metrics Survey, N=639.

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

56% We learned that only two things

Source: 2019 OpenView SaaS Metrics Survey, N=639.

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

High Cost Low Cost Product and GTM execution

Yo Y Gro wth Ra te Founders over 30 years of age

60% their younger peers.

Source: 2019 OpenView SaaS Metrics Survey, N=639.

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

Gro wth Ra te (Annua l) SaaS companies grow rapidly in

150% quartile company nearly triples.

OV | 2019 EXPANSION SAAS BENCHMARKS Proprietary ©2019 OpenView

S a le s a nd Ma rke ting S p e nd (% o f ARR) Sales and marketing spend are

70% of spend after they hit $2.5M of

60% ARR, before that it is R&D.

40% Sales and marketing spend

30% peaks when companies are

20% scaling through Series C / D –

10% watch out for inefficiency in

0% spend and rising CAC Payback

Source: 2019 OpenView SaaS Metrics Survey, N=639.