Tom Tunguz

APRIL 28, 2024

In 2014, 2016, 2020, 2021, these big mergers drove the figures into the tens of billions. Year Share Good Year 2012 18.4% - 2013 25.9% - 2014 65.5% Multi-billion dollar acquisitions, the blue bars, are the largest contributors to this swing. X 2015 20.1% - 2016 43.0% X 2019 23.4% - 2020 61.1% X 2021 43.8%

Acquisition 314

Acquisition Startup Venture Capital Software 314

Tom Tunguz

NOVEMBER 20, 2022

I set out to determine if fundraising seasonality had changed from this post I published in 2014 which suggested Q2 & Q4 were best for founders. The US software Series A market has become much less seasonal since that post in 2014. The answer is yes. I’ve plotted the data above & smoothed it to clarify the patterns.

Startup 311

Startup Software Data Marketing 311

Tom Tunguz

JANUARY 4, 2023

This change in the exit market parallels a surge in acquihires in 2014 when corporate development departments began to acquire seed-stage companies for talent rather than waiting for Series A businesses. During the 2013-2014, median acquisition prices increased by 50% in less than a year, from $36m to $54m.

Startup 327

Startup Marketing Acquisition Pricing 327

SaaStr

DECEMBER 19, 2019

HubSpot is a great one that IPO’d way back in 2014 ?? HubSpot has gone global with a fury since 2014, driving from 22% international revenue to 40%. 5 Interesting Learnings from Slack at $700m in ARR. 5 Interesting Learnings from Zoom. As it IPOs. 5 Interesting Learnings from Bill.com’s IPO. With a $10k ACV. RingCentral ).

Outsourcing Services 363

Outsourcing Services Scale SMB Pricing 363

Tom Tunguz

JANUARY 18, 2022

2014’s correction stalled and then reversed Series D round sizes for 2 years through the second correction in 2016. Three corrections in the last ten years have contracted multiples by 40% or more. These are marked in peachpuff orange rectangles above. The Series D mean round size is plotted in red.

Marketing 362

Marketing Startup Finance Technology 362

Tom Tunguz

DECEMBER 26, 2022

From 2003 to 2014, Constellation’s revenues compounded from $80m to more than $5b, an average of 25% annually. In 2014, Constellation grew revenues 40%, which today would place the company in the top quartile. But Constellation arrives at that growth in a very different way : they acquire to grow.

Software Review 295

Software Review Investment Software Acquisition 295

Tom Tunguz

APRIL 1, 2019

In 2014, I published a post called Do Startup Require Less Capital to Succeed than 10 Years Ago ? In 2014 we saw increasing efficiencies over time, which was very exciting because it reaffirmed the efficiency of SaaS go-to-market. It’s been five years and time to see how things have changed. The chart above updates that analysis.

Startup 279

Startup Software Review SaaS Acquisition 279

Tom Tunguz

FEBRUARY 9, 2020

It was March 2014. It’s a far cry from 20 people and sub-$100M valuation in 2014. The debate about partnering with Snowflake went back and forth during the investment committee meeting. My partners, Satish and John, had met the company and were proposing to lead the Series B. It grew 174% year on year at scale.

Technical Review 55

Technical Review Software Review Scale Investment 55

SaaStr

MAY 16, 2020

When I invested in Talkdesk in 2014, Five9 had a $150m market cap. That’s accelerated more Cloud leaders than it has harmed. It’s not just Zoom and Slack. Many other functions have quickly moved to the Cloud, e.g. call center like RingCentral and Five9. Today, six years later, it is $7 billion. Let that sink in a bit ??.

SaaS 364

SaaS Cloud Investment Marketing 364

Tom Tunguz

OCTOBER 7, 2019

The top left chart shows a $1M round had about 41% market share in 2010; that grew to about 54% in 2014; now it has fallen to 35%. Today, the first institutional round of capital is that $3-5M in 54% of cases, up from 39% in 2014. These numbers would be more extreme if benchmarked to 2014. But something changed.

Marketing 247

Marketing Benchmarks Trends Startup 247

SaaStr

JULY 21, 2024

Which is that we have literally 100x more quality content than 2011-2014. Organic Search remains our #1 source of SaaStr readers for 13 years straight: But, I can also tell you what our data says. Our content page ranks remain high. And we’ve actually increased our output.

Data 306

Data Social Media Content Marketing Engineering 306

The Daily Egg

FEBRUARY 8, 2021

The company initially launched back in 2012 but didn’t officially acquire its first customers until two years later, in 2014. Monday.com has become one of the most popular project management solutions available. Today, 115,000+ organizations worldwide rely on Monday.com.

Management 284

Management 284

SaaStr

JUNE 1, 2022

2014 $4.1B. 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 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 347

Sales Hiring Acquisition Enterprise Cloud 347

SaaStr

AUGUST 27, 2021

In 2014, it had 6 employees. Folks want to start startups because they have a chance to look like this: The true definition of a tech startup is probably one that if it truly achieves product-market fit, can scale almost infinitely. The above example is of my third venture investment, Talkdesk. Today, it has 2,000 employees and is worth $10B.

Startup 299

Startup Scaling Investment Product Marketing 299

Tom Tunguz

JANUARY 4, 2019

First, the science of building SaaS companies is better understood today than in 2014. To be fair, 22% of companies raised at $0 in ARR. But the average MRR has increased substantially from the last time I analyzed the data. note I’m switching from median to average here). That’s quite a growth rate.

Benchmarks 261

Benchmarks Startup SaaS Data Analysis 261

Tom Tunguz

MAY 23, 2021

2014: Alibaba. If we plot the annual growth rates for the 75th percentile Series A, we observe the expansion in valuations occurs in fits and starts. 3 of the 11 years recorded 40%+ growth. 3 of the years saw declining prices. Perhaps these prices are tied to blockbuster IPO markets. 2012: Facebook.

Software Review 364

Software Review Venture Capital Cloud Pricing 364

Tom Tunguz

JUNE 5, 2021

Over time, rates decline and then in the 2012-2014 era, they begin to surge upward culminating 6-8 years later at the top-left of the chart and $200b+ invested. The y-axis tracks enture capital investment by year and the year of the data point resides in the reddish circle. Do you remember this shape from high school math?

Venture Capital 363

Venture Capital Marketing Government Investment 363

Tom Tunguz

MARCH 1, 2020

It includes a basket of all the next-generation software companies since 2014.* Let’s double-click on the impact of last week on the valuation environment. This is our familiar forward multiples chart. You will see that multiples are still meaningfully above the median of 6X which is the thin blue line.

Software 327

Software Travel Startup Technology 327

SaaStr

MAY 19, 2021

Pretty incredible for a product that just launched in 2014. And that’s with direct and indirect competition from Asana, Atlassian, Clickup, Wrike, Smartsheet, Notion and so many others. 5 Interesting Learnings: #1. 121% NRR from 10+ seat customers, 107% overall, ~85% from smallest customers.

Scale 361

Scale SMB Government Enterprise 361

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 275

Management Finance Payment Features Subscription 275

SaaStr

OCTOBER 21, 2021

VC in Algolia back in 2014, and it’s now a $2B+ search API giant. CEO of Algolia, Bernadette Nixon. First up was a walk-and-talk with one of my favorite CEOs, Bernadette Nixon of Aloglia. I was lucky enough to be the first U.S. Casey did a deep dive on the future of APIs and more here: 2. Jeff Yoshimura, CMO at Synk.

Scaling 290

Scaling SaaS Marketing 290

SaaStr

APRIL 18, 2021

2014 $4.1B. Salesforce Growth: 2021 $20.8B Guidance 2020 $17.1B Thank you Ohana! — Marc Benioff (@Benioff) August 25, 2020. If you haven’t done a SaaS start-up before, it’s different. The reasons are many, but I think they can almost all be summed up in one key factor: SaaS compounds.

SaaS 331

SaaS Travel Churn Revenue 331

SaaStr

DECEMBER 8, 2020

IPO in 2014 at $1B. First product doesn’t work, no revenue for 3 years. 2013: first investment. 200m from Silver Lake. 2016: IPO at $1.15B market cap. 2020: Worth $7B today. Zendesk : Founded 2006. Raised $500,000 (!) in first angel round in 2007. Worth $2B by 2017. Crossed $1B in ARR in 2020. Today worth $16B.

SaaS 289

SaaS SMB Cloud Revenue 289

SaaStr

MAY 1, 2023

UIPath History 2005: Started as a tech outsourcing company 2014: $500k rev. 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 ! seed round 2015: $1m rev. 2016: $3.5m rev 2017: $30m rev. 2018: $155m rev.

Company Culture 290

Company Culture Innovation AI Enterprise 290

SaaStr

MARCH 17, 2022

#1 source of traffic to [link] : 2022: SEO 2021: SEO 2020: SEO 2019: SEO 2018: SEO 2017: SEO 2016: SEO 2015: SEO 2014: SEO 2013: SEO 2012: SEO. Even Year 1 pic.twitter.com/5FtzBG2v1O. — Jason BeKind Lemkin #???????????? jasonlk) March 15, 2022. So we’re coming up on Year 10 for SaaStr!

Engagement 278

Engagement Data Sales Marketing 278

SaaStr

APRIL 2, 2023

After the initial event exceeded our expectations, I decided to up my game for 2014. So at Pulse 2014, I became a “grown-up CEO.” Pulse 2014 was by far my worst keynote of all time. I hired a speaking coach (who was great in her own right, despite this story). Try writing out your speech and reading from a teleprompter.

Sales Hiring 331

Sales Hiring Scale Customer Success Scaling 331

Tom Tunguz

MARCH 27, 2022

Early businesses tend to create more instruments to hire, grow, and incentivize. tokens resemble equity in most ways, but possess one additional function: they can be used to pay for service. Trailing 2 Year Inflation Rate. Founded Year.

Startup 319

Startup Sales Hiring Government Outsourced Development 319

SaaStr

DECEMBER 22, 2023

I remember back in 2014, I was at an event with a CEO that was truly great. Every startup I’ve joined or startup has almost failed. Heck, SaaStr itself has almost failed. We lost $10,000,000 in March 2020, and half the team then quit. But: He couldn't raise any money from anyone. Quite a bit.

Social Media 319

Social Media Startup Revenue 319

SaaStr

JULY 14, 2022

This led to our first meet-ups in 2013 and 2014, the first SaaStr Annual in 2015 , the industry’s leading podcast in 2016, the first SaaS founder coworking space in 2017, and SaaStr Pro , the first learning management system for SaaS founders in 2018. But all this was pretty novel back in 2014.

Scale 312

Scale Sales Recruiting CTO Hire New CTO 312

SaaStr

MARCH 11, 2022

Put differently, if you look at multiples of revenue for top SaaS and Cloud companies above from 2014-2022, you could come to one of (at least) two conclusions today: Conclusion #1: Q2’20-Q4’22 Cloud Revenue Multiples Were a Covid Anomaly. This version of the BVP Nasdaq Index illustrates the question.

Scale 329

Scale SaaS Cloud Pricing 329

SaaStr

JANUARY 6, 2021

And when we wrote in 2014 that Box would surely cross $1B in ARR , many at the time didn’t quite get SaaS yet — or the power of recurring revenue. Box has been an important part of SaaStr almost since the beginning. Aaron Levie was kind enough to come to our first SaaStr Annual in 2015, just a week after their IPO.

Scale 312

Scale compliance Enterprise Scaling 312

SaaStr

JUNE 3, 2021

2014 $4.1B. It seems like every market in SaaS is even bigger than we expected, and importantly, able to not just hit $1B in ARR but accelerate afterwards. Seize the day. Salesforce Growth: 2022 $26B (guidance) 2021 $21.25B 2020 $17.1B Thank you Ohana! From 1st Earnings Call Inside. We’re all vaccinated!) pic.twitter.com/DQAwBNHm2A.

Cloud 306

Cloud Scaling SaaS Revenue 306

Tom Tunguz

JUNE 11, 2019

We analyzed the S-1 in 2014. Yesterday, Salesforce announced it would acquire Tableau for $15.7B. Tableau sells data visualization software and the team has built an incredible business. The company has grown since its public offering to generate about $1.1B in revenue, growing at 29%. Let’s put this acquisition in context.

Acquisition 271

Acquisition Pricing Startup Software 271

SaaStr

DECEMBER 9, 2019

(Note this is an update / refresh of our classic 2014 post). There are some real mysteries in SaaS. Even now that I understand them, I still see them as a bit of a mystery. Let me list a few: Why do customers buy a ton of seats up front , when they could start with a few and buy more later? Great for sales reps looking to hit their quota.

Sales 338

Sales Revenue Software SaaS 338

SaaStr

DECEMBER 2, 2021

. #13 SaaStr 222: Flexport CRO Ben Braverman on Why It Is Total Horseshit That The Best Sellers Don’t Make Good Managers, Why Specialisation Does Not Lead To The Best Customer Experience & Scaling Revenue From $18k MRR in 2014 to a $472m Year In 2018.

Scale 314

Scale Benchmarks Enterprise Leadership 314

SaaStr

SEPTEMBER 3, 2023

Previously, he served as Weber Shandwick’s Western Region president from 2014-2019, managing a staff of 200 people. Most recently, Penati was the founder and chief advisor at Penati and Partners, a marketing and communications consultancy that worked with startups and nonprofit organizations.

Consulting 274

Consulting Communication Startup Branding 274

Tom Tunguz

JUNE 11, 2017

A year later, those trends have continued to converge, and SaaS valuations have resurged, reaching their highs of the 2014-2015 boom. If the first six months of 2017 are any indication, then 2017 should be roughly similar to 2016 and 2014 in terms of total dollars raised by SaaS startups in seed rounds through Series C.

Venture Capital 203

Venture Capital SaaS Trends Startup 203