Tom Tunguz

DECEMBER 12, 2021

Since 2016, public software has witnessed four corrections. Also, 2014 to 2016 saw a 57% reduction in multiples and of course after 2008. In fact, the 75th percentile multiple has appreciated 25% annually since 2016 and the median has increased by approximately 20%. Today, we’re in the midst of the fifth. Correction Year.

SaaS 360

SaaS Cloud Enterprise Software 360

Tom Tunguz

JANUARY 18, 2022

Only the 2016 reduction of 57% surpasses it. 2014’s correction stalled and then reversed Series D round sizes for 2 years through the second correction in 2016. The public software sector is weathering the second deepest multiple contraction in the last decade. These are marked in peachpuff orange rectangles above.

Marketing 362

Marketing Startup Finance Technology 362

SaaStr

JULY 29, 2021

So Microsoft announced that LinkedIn, which it bought in 2016, has now crossed a stunning $10 Billion in ARR — and growing 27% year-over-year. Revenue tripled since Microsoft acquisition in 2016. Members “only” up 70%, while revenue up 300% since 2016. LinkedIn sold to Microsoft in 2016 for $26B.

B2C 318

B2C B2B Acquisition Cloud 318

Tom Tunguz

NOVEMBER 29, 2015

In 2016, I believe they will enjoy a very active acquisition environment. If there are to be massive acquisitions of software companies in 2016, this list of roughly 20 companies are likely to be buyer. In 2015, startups benefitted from a vibrant fund raising market.

Software 100

Software Acquisition Startup Investment 100

SaaStr

FEBRUARY 4, 2021

What began as a blog post in 2016 has evolved into a yearly exploration and survey to founders and investors to discover what it really takes to raise capital for SaaS companies. The Evolution of SaaS Funding From 2016 to 2021. Originally, in 2016, Point 9 measured MRR, but they have since changed their focus to ARR).

Finance 289

Finance Product Marketing SaaS Investment 289

Tom Tunguz

APRIL 21, 2024

For a period from December 9, 2009, to approximately March of 2016, technology companies produced nearly 5% free cash flow yields on average. Software companies top the charts at 3% over the last 20 years, according to data from New Constructs , a financial research firm. There are times when other sectors yield more.

Software 193

Software Business Construction Government 193

Tom Tunguz

JULY 28, 2016

Through the end of July in 2016, $70B worth of SaaS companies sold. In 2016, these PE firms aren’t following that playbook. The 2016 software buying spree hasn’t benefitted private startups or unicorns yet, and that reflects the different strategies of the buyers.

Payment Solutions 100

Payment Solutions Payments SaaS Acquisition 100

Tom Tunguz

NOVEMBER 6, 2016

Artificial intelligence is to be a big trend in the SaaS world, a theme that matured in 2016 but will very much continue through 2017. 17% of SaaS companies who have raised so far in 2016 employ machine learning. And investors are excited to support them.

Artificial Intelligence 100

Artificial Intelligence Trends Marketing SaaS 100

Tom Tunguz

JANUARY 14, 2016

In 2016, the question that will immediately follow, “What is your annual growth rate?” When seed and Series A investors consider an investment in 2016, they will be asking themselves, “How much capital will this company need to raise before an exit?” ” will be “What are your unit economics?”

Startup 100

Startup Metrics Transportation Marketplace as a Service 100

Tom Tunguz

OCTOBER 29, 2022

Since 2016, the average public software witnessed its sales efficiency winnowed from 52% to 47%, a decline of about 10%. Third, those lows touch the highs of the next rung down; i.e., the current levels of the 75th percentile companies’ sales efficiency is equal to the 50th percentile companies in 2016. What happened?

Sales Hiring 314

Sales Hiring Sales Startup Acquisition 314

SaaStr

DECEMBER 14, 2022

Let’s go back in time … to early 2016. At SaaStr Annual 2016, in February, all the VCs were discouraged. “Unicorns are over,” they said. Just like Marketo was in the 2016 downturn. A sign many of those with the biggest checkbooks in SaaS think things will get substantially better. No way, you say?

SaaS 243

SaaS SMB Pricing Marketing 243

Tom Tunguz

JANUARY 25, 2016

As the cost of capital increases in 2016, these winner take all rounds will become less and less common. It’s not that fundraising will not remain a critical skill in 2016. So the disparity across competitors’ balance sheets will contract. Rather, fundraising will no longer be exclusively sufficient.

Startup 100

Startup Investment Technology Strategy 100

SaaStr

MARCH 31, 2021

from 2015 to 2016 … and then exploded: UIPath History. 2016: $3.5m Top 50 customers grew bookings 81x since 2016, and all 2016 customers together grew 57x. These 2016 customers really leaned in on UiPath. And then after a decade … it started to come together. 2014: $500k rev. seed round. 2015: $1m rev.

Outsourcing Services 360

Outsourcing Services Outsourced Development Payment Features Cloud 360

Tom Tunguz

APRIL 25, 2016

As the overall venture market environment evolves in 2016, so too does the SaaS and Software segment. In Q1 2016, SaaS rounds increased a modest 10%. But early 2016 pace still exceeds the best quarters of 2010-2012. The SaaS fundraising has slowed in parallel to the rest of the market.

Marketing 100

Marketing SaaS Investment Startup 100

Tom Tunguz

MARCH 6, 2016

The startup fundraising market in 2016 has been difficult to characterize. VCs invested about $2B in January and February 2016. Punctuated by a concentrated decline in public tech stocks, the sentiment in Startupland has changed from resolute ebullience to a calmness approaching caution.

Marketing 100

Marketing Finance Investment Startup 100

Tom Tunguz

MARCH 24, 2024

In 2016, the question was easy to answer : sell Ironman not Robocop. Should software assist humans or act on their behalf? Technology hadn’t reached the level of sophistication we have attained today where AI is 90% as capable as a high-school student, the MMLU benchmark for AI is precisely this.

AI 158

AI Software Engineering Benchmarks Startup 158

SaaStr

NOVEMBER 10, 2021

100k+ customers have gone from 50% of revenue in 2016 to almost 80% today: #2. From 2 $1m ARR customers in 2016 to 145 today. $100k+ customers are key to ARR growth. Datadog isn’t leaving the smaller customers behind, but they are increasingly a smaller percentage of revenue. More product, more products, more products.

Scale 314

Scale Cloud Enterprise Scaling 314

Tom Tunguz

NOVEMBER 8, 2015

What does this mean for 2016? A path to short term profitability will be much more important in 2016 than before. And with the number of superfast growing, capital efficient software companies in the private market, I expect 2016 to be healthy year for software IPOs and exits - much better than 2015.

Startup 100

Startup Software Data Acquisition 100

SaaStr

MAY 6, 2022

January 2016, SaaS stocks were riding high. It was called 2016: * Everyone panicked * Seemed like multiples would never recover * LinkedIn sold to Microsoft for 7x ARR. That revenue multiples should rise from where they were in 2019. But I’m hardly sure this will happen in practice. And remember, we’ve seen this all before.

SaaS 326

SaaS Azure Cloud AWS 326

Tom Tunguz

MARCH 10, 2022

In 2016, each company recorded less than $50m in revenue. Both have grown very fast. In fact, their revenue trajectories through 2020 are nearly identical. Both companies employ a usage-based pricing model: pay for what you use. In two years, both would near $200m in revenue. They would both exceed $400m in 2020.

Startup 337

Startup Pricing Revenue Software 337

SaaStr

MAY 10, 2022

2016 was tough, too. But the markets also dropped 50% at the start of 2016, and VCs panicked. It was called 2016: * Everyone panicked * Seemed like multiples would never recover * LinkedIn sold to Microsoft for 7x ARR. There are enough good investors out there. — Jyoti Bansal (@jyotibansalsf) May 6, 2022. #6. And then ….

SaaS 243

SaaS Enterprise Startup Investment 243

SaaStr

NOVEMBER 3, 2023

When we raised the first SaaStr Fund in 2016, this concept was still fairly new. Harry Stebbings was kind enough to invite us back to 20VC’s latest roundtable on a niche but very interesting topic — Founder-Led VC Funds. Fast forward to today, it’s blow up.

Investment 247

Investment Communication SaaS Management 247

FastSpring

APRIL 17, 2024

Since 2016, SaaStock has helped more founders, investors, and operators connect, learn, and grow than any other SaaS conference globally. We’d love to talk with you in person! Join us at the Palmer Events Center, in Austin, TX, from May 13th to 15th, for an extraordinary event dedicated to all things SaaS.

Payment Services 133

Payment Services Merchant Services SaaS Payments Payment Solutions 133

Kellblog

SEPTEMBER 13, 2019

I’ll be speaking at the APPEALIE 2019 SaaS Conference and Awards in San Francisco on September 25th and I noticed that in their promotions the folks at APPEALIE had assembled their own Kellblog’s Greatest Hits album from 2016 to 2019, complete with its own cover art. It means greatest of all time.” ” Cool, indeed.

SaaS 43

SaaS Scale Startup Software 43

Tom Tunguz

JUNE 14, 2022

During the dotcom crash in 2001, the Global Financial Crisis of 2008, and the SaaS corrections in 2014, 2016, and 2018, Lee was either COO/CFO or CFO at Twilio, SAY Media, and Ofoto. Lee Kirkpatrick is no stranger to downturns.

Management 262

Management Finance Subscription Payment Features 262

SaaStr

MAY 1, 2023

2016: $3.5m UiPath has had an incredible history, taking 10 years to get to that first $1m in ARR … and then turning into one of the fastest growing software companies to $1 Billion in ARR ever ! UIPath History 2005: Started as a tech outsourcing company 2014: $500k rev. seed round 2015: $1m rev. rev 2017: $30m rev. 2018: $155m rev.

Company Culture 244

Company Culture AI Innovation Enterprise 244

SaaStr

MARCH 16, 2021

Cloud has been on an incredible tear since 2012 or so, and then even more since about 2016, and then as you can see above, went into hyperdive in about 2018 … and then into true warp speed after Covid. Yes, the markets have retreated a bit from their all-time highs. But does it even matter? SaaS and Cloud are up +1000% since 2013.

Cloud 305

Cloud SaaS Trends Metrics 305

SaaStr

MAY 7, 2023

Ray Wang of Constellation Research and Vala Afshar, Chief Digital Officer, had me back after a long time on DisrupTV.

Interviewing 204

Interviewing Investment SaaS Sales 204

SaaStr

JUNE 3, 2022

2016: Dharmesh joined us for the first time, with one of the most engaging and highly-rated SaaStr Annual session on ever: their journey to IP O. In the run-up to SaaStr Annual 2022 on September 13-15 , we wanted to look back at some of the highest-rated SaaStr sessions of all time, since the first SaaStr Annual in 2015.

CTO 247

CTO Retention Startup Scaling 247

SaaStr

MARCH 19, 2023

Check out this week’s top blog posts, podcasts, and videos: Top Blog Posts This Week: The Three Valuation Lows in SaaS: 2013, 2016, and 2022 5 Interesting Learnings from Doximity at $450,000,000 in ARR Is Cold Calling Dead? Each week, we round up our most popular content so you can catch up on anything you may have missed.

Scale 199

Scale Enterprise Churn Startup 199

SaaStr

MAY 12, 2022

Karim previously built and sold Y Combinator-backed Paribus to Capital One in 2016. Ramp is a leading finance automation platform. Founded just in 2019, they were valued at $8.1 billion two years after launch. The second-timers see things differently.

CTO 191

CTO Finance SaaS 191

SaaStr

JUNE 27, 2022

In April 2016, Shippo had only 22 employees and was just beginning to scale. As of 2016, when this recording took place, customers’ expectations around free shipping grew, with 63% of all eCommerce shoppers hoping to see free shipping at checkout. To celebrate 10 years of SaaStr, we’re revisiting some classic podcast episodes.

Sales Hiring 190

Sales Hiring Startup Scale Content Marketing 190

SaaStr

NOVEMBER 22, 2023

10 years later, they hit $100m ARR in 2016 and growth just compounded from there. Let’s dig in. 5 Interesting Learnings: #1. Steady, Strong Growth — Since 2006 Appfolio was founded way back in 2006, and they never quit. Today, at a $660m run-rate, they are growing 29% a year, with substantial free-cash flow. #2.

Payment Services 227

Payment Services Payment Solutions SaaS Payments Payments 227

CloseSaaS

MAY 12, 2017

If you're an entrepreneur running a self-funded startup, here's the full recording of a Q&A session with Hiten Shah & Steli Efti at Microconf 2016.

Startup 52

Startup Sales 52

SaaStr

JUNE 1, 2022

It’s not slowing down Salesforce, Snowflake, or almost any other SaaS or Cloud leader. Salesforce Growth: 2023 $31.8B (guidance) 2022 $26.5B 2021 $21.25B 2020 $17.1B 2014 $4.1B. Thank you Ohana! pic.twitter.com/CMhrBXgHSF. — Marc Benioff (@Benioff) May 31, 2022. We may be headed for a big downturn, we’ll see.

Sales Hiring 308

Sales Hiring Acquisition Cloud Enterprise 308

Tom Tunguz

JANUARY 12, 2022

BTC and ETC moved more or less in synchrony from 2016 to 2018. Economics students would argue the discounted cash flow model predicts this behavior. Companies with profits in future years should be less valuable during times of higher interest rates. Three years ago, they went their separate ways.

Software 333

Software Marketing Trends Startup 333

SaaStr

JANUARY 11, 2023

But importantly, it’s raised its ACV 4x since 2016. Docebo’s pricing is on the “corporate” side of LMS. It doesn’t compete at the bottom of the market, and targets top logos with a reasonably priced product. Without that, the company would likely be a fraction of its current ARR. #3.

Scale 328

Scale Pricing Scaling Enterprise 328