We spent the last year and a half collecting data on over 8,000 PE investors in the US.
We analyzed their portfolios, and ranked the largest by EV managed.
Here are the leaders:
Blackstone (managing a total enterprise value of $156bn in the US)
KKR ($100bn)
Thoma Bravo ($81bn)
Other investors in the top 10 include Apollo Global Management, Inc. ($77bn), Hellman & Friedman ($65bn), Bain Capital ($59bn), Vista Equity Partners ($54bn), The Carlyle Group ($48bn), TPG ($45bn), and EQT Group ($44bn).
We recently analyzed deal data for entries and exits for private equity investments in Europe.
And we found that the holding periods of investments has reached an all time high of 5.8 years (up from 4.9 years in 2020).
A few other interesting data points:
1. 56% of assets that exited in 2023/24 stayed longer than 5 years in the portfolio up from 40% in 2020
2. Consumer assets have seen the largest jump in holding periods. On average it takes a Consumer asset 6.3 years to exit. Assets in Energy & Materials (6.3 years) and Industrials (5.8 years) are also characterized by long holding periods.
3. Assets with longest holding periods (7+ years and often unsold) tend to have slower growth rates and lower margins (by a third).
Today, we published the 2nd edition of the SaaS Benchmarks Report.
Based on data from over 2,100 SaaS businesses, this is the most comprehensive report we have ever published.
What does the data tell us?
First, SaaS growth was the slowest it has been in years, and while so far, it’s stabilized in 2023, we are starting to see some acceleration again in some segments.
Second, those who are growing, are relying more and more on expansion revenue, and retention has now become a key growth driver. Companies that were able to retain their customers in this tough climate grew at least 1.8x faster than their peers.
Third, new business ARR is finally ticking up and some green shoots are starting to emerge. Businesses with ARR over $1m saw an uptick in new business ARR growth in the first quarter of 2023. It’s hard to say if this is an outlier or part of a wider trend.
These insights only scratch the surface. I hope you get a chance to go through the full report. There are a ton of insights in there.
Over the past few weeks, we've been studying retention data from over 2,100 SaaS businesses. We’ve been digging for retention trends, patterns, and insights. Sharing some key takeaways from our research here:
1) Retention in 2022 was harder than ever. More than half of SaaS businesses had lower retention rates in 2022 when compared to 2021. This is in sharp contrast to 2021 during which we saw almost 70% of businesses having a higher retention rate vs. 2020.
2) Companies with best-in-class retention grow at least 1.5-3x faster than their peers. SaaS businesses with a net retention rate of over 100% grow 43.6% per year. Businesses with a net retention rate of less than 60% grow at just 13.1% per annum.
3) B2B SaaS businesses enjoy higher net retention than B2C SaaS. Only 2.7% of SaaS businesses with an avg. revenue per account (ARPA) less than $10/month have net retention over 100%. In contrast, 41.1% of businesses with an ARPA over $500/month have net retention of over 100%.
4) Retention becomes more important as SaaS businesses enter the post-PMF growth phase. Businesses with ARR in the range of $1-3m have a top quartile net retention rate of 94%. Those in the $3-15m ARR range have it at 99%, and those at scale ($15-30m ARR range) have it at 105%.
5) Best-in-class net revenue retention is in the ~110/120% range. High net retention is usually a result of a high gross retention + strong expansion loop. High retention also means better growth, a more capital-efficient business, and even higher valuations from investors.
6) Expansion is the key driver of higher net retention at higher ARRs. 37.1% of revenue added for SaaS business with ARR in the range of $15-30m comes from expansion. At scale, if you are not upselling or cross-selling to your existing customers you are missing out.
7) A net retention rate over 100% does not mean that you can organically grow forever. Retention starts to decay in year two. This is because of higher churn and lower expansion revenue in year two when compared to year one.
8) Best-in-class B2B SaaS businesses are not only able to retain new business revenue but also able to grow it from day one. The top quartile of SaaS businesses with an ARPA over $100/month have a 3 and 12 months new business net retention of over 100%.
Every week, I scour the web to pick the top SaaS reads for our weekly newsletter, the SaaS Roundup.
This year alone, I shared over 200 curated reads on leadership, growth, pricing, SaaS metrics, benchmarks, and much more. Here are the best reads of 2022; those articles and charts that resonated most with 19,000 weekly readers.
We analyzed their portfolios, and ranked the largest by EV managed.
Here are the leaders:
Blackstone (managing a total enterprise value of $156bn in the US) KKR ($100bn) Thoma Bravo ($81bn)
Other investors in the top 10 include Apollo Global Management, Inc. ($77bn), Hellman & Friedman ($65bn), Bain Capital ($59bn), Vista Equity Partners ($54bn), The Carlyle Group ($48bn), TPG ($45bn), and EQT Group ($44bn).