SAN FRANCISCO, Oct. 15, 2019 /PRNewswire/ -- KeyBanc Capital
Markets Inc. (KBCM), the corporate and investment banking unit of
KeyCorp (NYSE: KEY), today released results from its Technology
Group's 10th annual Private SaaS Company Survey
(formerly known as the Pacific Crest Securities Private SaaS
Company Survey), the benchmarking report by which the
Software-as-a-Service industry measures financial and operating
performance.
Overall, growth remains strong among private SaaS companies,
with survey respondents reporting a median of 40 percent
year-over-year organic annual recurring revenue (ARR) growth. That
being said, only one-in-five companies are operating at or above
"The Rule of 40%," a much-discussed key measure of best-in-class
SaaS company performance calculated by adding a company's growth
rate and free cash flow (FCF) margin. Interestingly, the survey
results found that "The Rule of 40%" performers do not necessarily
distinguish themselves with lower churn rates compared to those
that fall below the threshold—what sets them apart are
significantly lower customer acquisition cost ($0.51 vs. $1.26)
and capital consumption (0.7x vs. 1.5x) ratios.
"As the SaaS industry continues to become more sophisticated,
operators and investors are looking more closely at
performance-driving metrics," said David
Spitz, managing director of KBCM's Technology Group and
primary author of the survey. "This year's survey results show that
while strong retention is clearly a necessary component of
efficiency, the most elite performers differentiate themselves most
in terms of high sales productivity and low capital
consumption."
David Skok, investor at Matrix
Partners, author of the SaaS-focused blog forentrepreneurs.com and
active supporter of the survey for the past eight years, added:
"SaaS businesses continue to play a pivotal role in our economy. As
they've matured, it's become increasingly important to benchmark
and track core performance metrics so that they're maximizing
potential. The survey continues to be a yardstick for SaaS
companies, especially those striving for 'The Rule of 40%'
excellence."
The KBCM Private SaaS Company Survey establishes operational and
financial benchmarking data for executives and investors in SaaS
companies, from go-to-market selling strategies, customer retention
rates and customer acquisition costs, to operational management,
growth and margin structures. To view the full survey results,
visit us at www.key.com/saassurvey.
About the KBCM Technology Group Private SaaS Company
Survey
The KBCM Technology Group Private SaaS Company
Survey was first developed by Pacific Crest Securities in 2010 to
provide benchmark performance metrics for SaaS companies. Pacific
Crest was acquired by KBCM in 2014 and rebranded as KBCM Technology
Group, combining the technology specialist approach of Pacific
Crest with the expanded capabilities and broader resources of KBCM
and its parent, KeyCorp (NYSE: KEY). More than 400 senior
executives from SaaS companies around the world participated
anonymously and confidentially in the 2019 survey. Responses were
submitted online between June and July
2019. KBCM cannot verify accuracy of responses. Observations
and commentary contained herein relate solely to the survey results
and cannot necessarily be applied elsewhere. For more information
about the KBCM Technology Group, please visit us online.
About KeyBanc Capital Markets
KeyBanc Capital Markets
is a leading corporate and investment bank providing capital
markets and advisory solutions to dynamic companies capitalizing on
opportunities in changing industries. Our deep industry expertise,
broad capabilities and unique ideas are seamlessly delivered to
companies across the Consumer & Retail, Diversified Industries,
Healthcare, Industrial, Oil & Gas, Real Estate, Utilities,
Power & Renewables, and Technology verticals. With over 800
professionals across a national platform, KeyBanc Capital Markets
has more than $32 billion of capital
committed to clients and an award-winning Equity Research team that
provides coverage on over 600 publicly-traded companies.
About KeyCorp
KeyCorp's roots trace back 190 years to
Albany, New York. Headquartered in
Cleveland, Ohio, Key is one of the
nation's largest bank-based financial services companies, with
assets of approximately $144.5
billion at June 30, 2019. Key
provides deposit, lending, cash management, and investment services
to individuals and businesses in 15 states under the name KeyBank
National Association through a network of over 1,100 branches and
more than 1,500 ATMs. Key also provides a broad range of
sophisticated corporate and investment banking products, such as
merger and acquisition advice, public and private debt and equity,
syndications and derivatives to middle market companies in selected
industries throughout the United
States under the KeyBanc Capital Markets trade name. For
more information, visit https://www.key.com/. KeyBank is Member
FDIC.
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SOURCE KeyCorp