Slack’s shares are set to fall sharply this morning, down around 16% in pre-market trading. As the company beat analyst expectations last quarter and guided within range, the selloff might feel a little surprising.
Perhaps it shouldn’t.
I spoke with a VC last week about what the new benchmark results are for private SaaS companies, and to my surprise, he said software startups don’t have to grow at 100% to be fundable in today’s market. Given what I’d heard from other venture capitalists about how so much of their portfolios had found a COVID-19 growth bump, the perspectives felt incongruous.
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Startups wanted to grow at a pace of more than 100% pre-pandemic, and some have accelerated since. So how could a startup growing less than three
Is 5% a good monthly SaaS Churn Rate? Read on to learn the answer…
As a consultant to SaaS and Cloud providers that are looking to grow, I get asked what an acceptable SaaS churn rate is all the time.
This article was originally written in 2013 and has been updated several times over the years. The lessons are accurate even in 2020.
As I stated in 2013, the answer to “What is a good SaaS Churn rate,” was, “you want a churn rate to be ‘as low as possible.'”
In 2020 I just say, “let’s make churn a non-issue.” It will vary depending upon your market and your position therein. And it likely will never be zero. And that’s okay. Just make it a non-issue.
So, before you continue reading this article, if you’re in a position where you’re trying to figure out what an acceptable SaaS
After a heated run, SaaS and cloud stocks dipped sharply during regular trading on Monday.
According to the category-tracking Bessemer cloud index, public SaaS and cloud stocks dropped around 6.5% today, a material blow to the value of some of the world’s most highly valued companies, measured by sector-averaged revenue multiples.
After recovering all their COVID-19-related losses earlier this year, SaaS and cloud stocks kept on rising, reaching new all-time highs with regularity. But earnings season is starting, meaning that the value of modern software and digital infrastructure companies will soon be tested against Q2 results — results that were recorded fully during the global pandemic.
To hear bulls — both private and public — tell the story, COVID-19 and its ensuing workplace disruptions have provided software companies with a huge boon. Namely, that customers current and future have radically changed their procurement models and will need Continue reading "SaaS and cloud stocks finally give back ground"
When Dell bought EMC in 2016 for $67 billion it was one of the biggest acquisitions in tech history, and it brought with it a boatload of debt. Since then Dell has been working on ways to mitigate that debt by selling off various pieces of the corporate empire and going public again, but one of its most valuable assets remains VMware, a company that came over as part of the huge EMC deal.
The domestic stock market is advancing today on the back of some better-than-anticipated economic recovery data in the United States. While retail spending is still lower compared to the year-ago period, gains in May from April were better than anticipated.
In both the private and public markets, valuations for B2B software companies continue to climb. The average publicly traded cloud company trades at nearly 12x forward revenue, while in the private markets, investors are considerably more aggressive. With record levels of private capital, continued outperformance in the public markets and a zero interest rate environment, it can be hard to imagine an impetus for slowing down this runaway software train (even the COVID-19 pandemic has not yet been successful!).
Yet, only four or five years ago, outsized exits in the enterprise sector were outliers. In 2016, we built the slide below (showing value at the time of IPO/acquisition) to demonstrate the
Earlier this week, TechCrunch covered a grip of earnings reports showing that some companies helping other businesses move to modern software solutions are seeing accelerated growth. Inside the Software as a Service (SaaS) world, this is known as the digital transformation. Based on how many software companies are talking about it, the pace of change is only picking up.
But since we published that first entry, a number of SaaS companies that have posted financial results seemed to disappoint investors. Seeing some companies in the high-flying sector struggle made us sit back and think. What was going on?Today we’re going to explore how the digital transformation’s acceleration seems real enough, but how it’s not landing equally. We’ll start by going over a short run of earnings results, talk to Yext CEO Howard Lerman about what his B2B SaaS company is seeing, and wrap with notes on what could be Continue reading "The accelerating digital transformation, redux"
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Yesterday after the bell, Zoom and CrowdStrike reported earnings. The two technology shops, members of the SaaS cohort of public companies that has performed so well this year, had high expectations to meet.
This column noted on Monday that both companies could help set market sentiment regarding SaaS valuations at firms thought to enjoy a strong updraft from COVID-19 and its related market disruptions; working from home means that many companies needed new, better video conferencing abilities and more security tooling, the two things that Zoom and CrowdStrike provide.
If the pair failed to detail strong recent performance, their share prices, long rising, could have dramatically corrected.
But, in a huge boon to public SaaS companies — and, therefore, late-stage private SaaS valuations and early-stage SaaS investment — Zoom Continue reading "Zoom and CrowdStrike hang onto 2020 gains despite huge earnings expectations"
It’s always interesting to dig into a company’s IPO documents and decks after they’ve debuted, as with the benefit of passed time we can learn quite a lot. This is especially true in the case of Atlassian, a company that has seen its share price multiply since its 2015 public offering; outliers are always more interesting than pedestrian results, and Atlassian’s IPO-era materials are fascinating.
In this companion post we continue our dive into the firm’s IPO deck, this time parsing the document from a financial perspective. Ron got the first-person story and the context; here we’ll dig into the company’s reported financial results, with a focus on how well-prepared to grow and profit the firm appeared at the time of its public Continue reading "Ahead of its 2015 debut, Atlassian’s IPO deck detailed a financial rocketship"
BetterCloud gives IT visibility into its SaaS tools providing the means to discover, manage and secure those tools. In the middle of a crisis that has forced most companies to move workers home, being able to manage SaaS usage in this way is growing increasingly significant.
Today the company announced a $75 million Series F. Warburg Pincus led the way with participation from existing investors Bain Capital Ventures, Accel, Greycroft Partners, Flybridge Capital Partners, New Amsterdam Growth Capital and e.ventures. Today’s round brings the total raised to $187 million, according to the company.
While CEO David Politis acknowledges the gravity of the current situation, he also recognizes that giving companies a way to manage their SaaS usage is more pertinent than ever. “What has happened in the last two months has been terrible for the world, but in some crazy way it has just made what we do a Continue reading "BetterCloud scores $75M Series F as SaaS management needs grow"