Tom Tunguz

APRIL 28, 2024

In 2014, 2016, 2020, 2021, these big mergers drove the figures into the tens of billions. X 2015 20.1% - 2016 43.0% Multi-billion dollar acquisitions, the blue bars, are the largest contributors to this swing. It’s no surprise that in those years, the biggest acquisitions accounted for more than 53% of dollars on average.

Acquisition 259

Acquisition Startup Venture Capital Software 259

The Angel VC

MAY 31, 2016

So what does it take to raise money for a SaaS company in 2016? But they are exceptions, not the rule. According to this analysis of Tomasz Tunguz , the median SaaS company raises $88M before IPO.

SaaS 193

SaaS Finance Mobile Enterprise 193

Tom Tunguz

JANUARY 2, 2016

Which of the 16 major start of categories in information technology will reap disproportionate share of investment dollars in 2016? This may be a breakout category in 2016 for Series A investments. Given the amount of seed investor interest, I expect many of these marketplaces to raise series A dollars in 2016.

Startup 110

Startup Marketplace as a Service Social Media Advertising 110

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

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 351

SaaS Cloud Enterprise Software 351

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

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 322

B2C B2B Acquisition Cloud 322

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 293

Finance Product Marketing Investment SaaS 293

Tom Tunguz

OCTOBER 12, 2022

Enterprise-value-to-forward-revenue multiples are now below 2016 levels for the first time in 6 in years. It happened in Feburary 2016. The public software market continues to compress. The 25th percentile of companies trade at 3.3x today compared to 4.0x The median or 50th percentile trade at 4.9x Would it be crazy to see 3.3x

Banking 271

Banking Enterprise Software Revenue 271

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

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

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 247

SaaS SMB Pricing Marketing 247

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

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 359

Outsourcing Services Outsourced Development Payment Features Cloud 359

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

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 289

Sales Hiring Sales Startup Acquisition 289

Tom Tunguz

JUNE 1, 2024

In 2016, valuations fell 57%. MongoDB fell 24%; UIPath fell 36% ; Salesforce fell 15% ; Workday was down 11%. Weaker revenue projections tend to cause sell-offs. These large drops aren’t unprecedented. Is it different this time? Growth rates have changed meaningfully.

Software 268

Software Marketing Revenue Business 268

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

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 312

Scale Cloud Enterprise Scaling 312

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 327

SaaS Azure Cloud AWS 327

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 49

SaaS Scale Startup Scaling 49

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 247

SaaS Enterprise Startup Investment 247

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 324

Startup Pricing Revenue Development 324

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 236

Software Business Construction Government 236

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 247

Company Culture AI Innovation Enterprise 247

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 310

Cloud SaaS Trends Metrics 310

Tom Tunguz

AUGUST 4, 2024

For example, accounting graduates have fallen approximately 18% since 2016. Labor market shortages are a result of a mismatch between the supply of labor and the demand for it. Perhaps not enough graduates in a particular discipline. or too few applicants for a particular role like customer support.

AI 149

AI Software Review Marketing Systems Review 149

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 227

Management Finance Payment Features Subscription 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 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 252

CTO Retention Startup Scaling 252

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 210

Interviewing Investment SaaS Sales 210

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 189

CTO Finance SaaS 189

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 Enterprise Cloud 308

SaaStr

DECEMBER 8, 2020

2016: IPO at $1.15B market cap. And yes, no one could have predicted the run we’ve seen in Cloud in the past few years. But take a look at these examples: Marketo (and Hubspot): Founded 2006. Marketo IPO’s in 2013 at $700m market cap. Vista buys Marketo for $1.8B A little more than 2 years later, it was resold for $4.75B to Adobe.

SaaS 201

SaaS SMB Cloud Revenue 201

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 201

Scale Enterprise Churn Startup 201