Forget everything you think you know about SaaS growth metrics, because 2023's data reveals a landscape where the median Series A company hit $1.8 million in ARR, top performers grew at a blistering 140%, and smart expansion strategies turned churn into negative revenue leakage.
Key Takeaways
- Median ARR for Series A SaaS companies in 2023 was $1.8 million
- Average ARR growth rate for bootstrapped SaaS companies reached 120% YoY in 2022
- Top quartile private SaaS companies achieved 140% ARR growth in 2023
- Median ARR for public SaaS companies in Nasdaq was $450M in 2023
- Public SaaS average YoY ARR growth was 28% in Q4 2023
- Top decile public SaaS NRR was 125% in 2023
- Global median NRR for SaaS companies was 107% in 2023
- Average expansion revenue as % of total ARR was 18% in 2023
- Top quartile NRR for enterprise SaaS reached 130% in 2023
- Median annual churn rate for SaaS companies was 7.2% in 2023
- Revenue churn averaged -2.5% monthly for SaaS in 2023
- Logo churn for enterprise SaaS median 5% annual 2023
- Global SaaS market ARR reached $195B in 2023
- SaaS ARR growth slowed to 18% YoY globally in 2023
- Enterprise SaaS ARR segment grew 22% to $85B in 2023
SaaS growth is thriving with high private company ARR and robust revenue retention.
Churn Rates
- Median annual churn rate for SaaS companies was 7.2% in 2023
- Revenue churn averaged -2.5% monthly for SaaS in 2023
- Logo churn for enterprise SaaS median 5% annual 2023
- SMB SaaS churn rate 12% annual median in 2023
- Churn reduction trend 1.5% YoY improvement 2023 SaaS
- Expansion revenue offset 60% of churn in 2023 SaaS
- Churn by contract length: monthly 18%, annual 4% 2023
- Top quartile churn <4% annual revenue 2023
- Churn correlation with NPS -0.68 in SaaS 2023
- Average involuntary churn 2.8% of total in 2023
- Churn for multi-year contracts 3.2% median 2023
- Year-over-year churn drop 0.9% for public SaaS 2023
- Churn by industry: fintech 6%, HRtech 9% median 2023
- 75% of SaaS churn preventable per CS teams 2023
- Churn spike post-onboarding 22% higher in 2023
- Average churn recovery via winback 15% in 2023
- Churn for low-usage customers 25% annual 2023
- Median churn by ACV: <$5K 14%, >$50K 4% 2023
- Competitive churn 35% of total incidents 2023
- Churn trend with economic downturn +1.2% in 2023
- AI-driven churn prediction accuracy 82% in 2023 SaaS
- Cohort churn year 1 10%, year 2 7% average 2023
- Churn from pricing changes averaged 2% uplift 2023
Churn Rates Interpretation
The 2023 data shows that while the median SaaS customer may vanish at a steady 7.2% clip, clever companies are fighting back by locking them into annual contracts, expanding their wallets, and listening to their complaints, turning the leaky bucket into a slightly more manageable colander.
Market and Growth
- Global SaaS market ARR reached $195B in 2023
- SaaS ARR growth slowed to 18% YoY globally in 2023
- Enterprise SaaS ARR segment grew 22% to $85B in 2023
- Number of SaaS unicorns with >$100M ARR hit 120 in 2023
- ARR per capita in US SaaS hubs $2.5K in 2023
- Projected SaaS ARR to $300B by 2026 at 20% CAGR from 2023
- 45% of SaaS ARR from usage-based models in 2023
- M&A ARR multiples averaged 7.8x in 2023 deals
- ARR growth leaders >50% captured 25% market share 2023
- Vertical SaaS ARR $45B growing 25% YoY 2023
- AI/ML SaaS ARR surged 35% to $12B in 2023
- Average time to $10M ARR shortened to 30 months in 2023
- 68% of Fortune 500 ARR spend on SaaS in 2023
- Public SaaS market cap to ARR ratio 9.5x average 2023
- Emerging market SaaS ARR growth 32% in 2023
- Low-code/no-code SaaS ARR $18B 28% growth 2023
- ARR from partnerships averaged 12% of total 2023
- SaaS IPOs raised $4.2B on $1.5B ARR in 2023
- Cybersecurity SaaS ARR $32B 24% YoY 2023
- Median ARR velocity 1.8x faster in AI era 2023
- 52% SaaS ARR from top 10 vendors in 2023
- HRtech SaaS ARR $25B 19% growth 2023
- Fintech SaaS ARR $22B 26% YoY 2023
- ARR market saturation in CRM 75% penetration 2023
- New SaaS startups ARR median $450K at 12 months 2023
- Overall SaaS efficiency improved Rule of 40 +5pts in 2023
Market and Growth Interpretation
The SaaS market, now a $195B titan, is maturing with its growth slowing to a still-healthy 18%, yet it remains fiercely dynamic, with AI-fueled companies racing to $10M in record time, vertical specialists and emerging markets booming, and efficiency finally catching up to the spending spree as the industry eyes its next $300B milestone.
NRR and Expansion
- Global median NRR for SaaS companies was 107% in 2023
- Average expansion revenue as % of total ARR was 18% in 2023
- Top quartile NRR for enterprise SaaS reached 130% in 2023
- Median cross-sell contribution to NRR was 15% in 2023
- NRR decline to 105% average for high-growth SaaS post-2022
- 112% median NRR for SMB-focused SaaS in 2023
- Expansion-only NRR averaged 118% for mature SaaS 2023
- NRR correlation with stock performance 0.75 in public SaaS 2023
- Average land-and-expand NRR uplift 22% in 2023
- Median upsell rate contributing to NRR 25% of base in 2023
- NRR for vertical SaaS averaged 110% in 2023
- 9% average increase in NRR from pricing optimization 2023
- Multi-product NRR premium 8% over single-product 2023
- Customer success driven NRR uplift 14% median 2023
- NRR by ACV tier: $10K+ 115% vs $1K 102% in 2023
- Average contraction impact on NRR -3% in 2023
- 120% NRR threshold for top growth sustainability 2023
- International expansion NRR variance +5% in 2023
- AI product NRR averaged 122% early adopters 2023
- Median renewal rate embedded in NRR 95% 2023
- Net retention from usage-based pricing 125% median 2023
- NRR segmentation by tenure: year 1 98%, year 3 115% 2023
- Average NRR impact from churn reduction 7% in 2023
- Enterprise NRR median 118% vs mid-market 109% 2023
NRR and Expansion Interpretation
While the average SaaS company is barely jogging ahead at 107% NRR, the true champions are sprinting past 120% by expertly milking their existing customers through expansions, upsells, and crushing churn, proving it’s far more profitable to nurture your garden than to constantly hunt for new seeds.
Private SaaS Benchmarks
- Median ARR for Series A SaaS companies in 2023 was $1.8 million
- Average ARR growth rate for bootstrapped SaaS companies reached 120% YoY in 2022
- Top quartile private SaaS companies achieved 140% ARR growth in 2023
- Median net ARR expansion for private SaaS was 110% in Q4 2023
- Private SaaS companies with ARR under $1M had median churn of 15% annually in 2023
- Average CAC payback period for private SaaS was 18 months in 2023
- Magic Number median for private SaaS firms was 0.85 in 2023
- LTV:CAC ratio for top private SaaS was 4.2x in 2023
- Median Rule of 40 score for private SaaS was 32% in 2023
- Average gross margin for private SaaS companies was 76% in 2023
- Private SaaS median NRR was 108% for companies over $5M ARR in 2023
- Churn rate for private SaaS expansion revenue was 5% annually in 2023
- Median ARR per employee for private SaaS was $175K in 2023
- 67% of private SaaS companies beat ARR growth targets in 2023
- Average FCF margin for mature private SaaS was 25% of ARR in 2023
- Private SaaS median logo churn was 8% in 2023
- Rule of 55 median for growth-stage private SaaS was 45 in 2023
- Average burn multiple for private SaaS was 1.8x in 2023
- 42% of private SaaS ACV was $10K-$50K in 2023 median
- Median time to $1M ARR for private SaaS was 22 months in 2023
- Private SaaS dollar churn median was -4% in 2023
- Average activation rate for private SaaS was 62% in 2023
- Median upsell rate in private SaaS was 22% of customers in 2023
- Private SaaS median quota attainment was 78% in 2023
- Average pipeline coverage ratio was 3.5x for private SaaS in 2023
- 55% of private SaaS revenue was recurring in early stage 2023
- Median ARR concentration risk was 15% top customer in 2023 private SaaS
- Private SaaS median viral coefficient was 0.45 in 2023
- Average sales velocity was 45 days for private SaaS in 2023
- Median operating expense as % of ARR was 92% for private SaaS 2023
Private SaaS Benchmarks Interpretation
The venture-backed SaaS world in 2023 revealed a high-stakes, high-reward reality where the most successful companies grew at a blistering 140% while the majority still struggled with churn, payback periods, and the delicate balancing act of the Rule of 40, painting a picture of an industry where hyper-growth and healthy unit economics remained tantalizingly just out of sync for most.
Public SaaS Benchmarks
- Median ARR for public SaaS companies in Nasdaq was $450M in 2023
- Public SaaS average YoY ARR growth was 28% in Q4 2023
- Top decile public SaaS NRR was 125% in 2023
- Public SaaS median gross retention was 92% in 2023
- Average Rule of 40 for public SaaS was 38% in 2023
- Public SaaS FCF as % of ARR averaged 18% in 2023
- Median churn for public SaaS over $100M ARR was 6% annual in 2023
- Public SaaS average ARR per FTE was $285K in 2023
- 72% of public SaaS beat ARR guidance in 2023 earnings
- Average CAC ratio to ARR growth was 35% for public SaaS 2023
- Public SaaS median EV/ARR multiple was 8.2x in 2023
- Net expansion rate median 115% for large public SaaS in 2023
- Public SaaS logo expansion averaged 12% in 2023
- Average burn rate for public SaaS was -5% of ARR in 2023
- 61% public SaaS multi-product ARR contribution in 2023
- Median time to double ARR for public SaaS was 3.2 years in 2023
- Public SaaS average dollar retention 105% in 2023
- 48% of public SaaS revenue from international in 2023 median
- Average sales & marketing % of ARR 42% for public SaaS 2023
- Public SaaS median activation to paid conversion 55% in 2023
- EV/ future ARR multiple averaged 6.5x for public SaaS 2023
- Public SaaS average upsell contribution to growth 35% in 2023
- Median RPO to ARR ratio 1.4x for public SaaS in 2023
- Public SaaS churn by cohort age 4-7% in 2023
- Average net ARR add from existing customers 65% in public SaaS 2023
- Public SaaS median gross profit % ARR 78% in 2023
- 29% YoY ARR growth median for mature public SaaS 2023
- Public SaaS average pipeline generation efficiency 1.2x in 2023
- Median customer concentration <10% ARR top 10 in public SaaS 2023
Public SaaS Benchmarks Interpretation
If you're not outperforming the median SaaS business in 2023—a mature, cash-generating machine with disciplined growth, sticky customers, and a stubbornly efficient engine—then you're not just behind, you're practically funding the competition's champagne.
Sources & References
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