RAC’s Private Software Growth Index: January 2026

Every year, we have the privilege of meeting with hundreds of software companies, many of them in our ‘sweet spot’ of $2.5-$15 million in annual revenue. From those conversations and screens, we’ve assembled the RAC Private Software Growth Index, a set of key performance indicators aggregated across the 400+ companies we’ve reviewed in detail.

We update this Index each month on a rolling Last Twelve Month basis and use it as a benchmark to help drive priorities within our portfolio, and we hope you’ll find it useful as well. The data set is differentiated as it comes from data calculated directly from a company’s financial statements and exclusively tracks growth-stage, business-to-business software companies.

Here's what's that Index looks like for last month:

To learn more about the Private Software Growth Index and how it was constructed, please see the disclosure at the bottom of this post.

What stands out in the data?

We have been closely monitoring the data from this month’s software index given the steep declines in public markets over the last few weeks. 

If we are indeed witnessing "the end of software as we know it", it's not yet showing up in our data…ARR growth is actually accelerating according to our data, and software retention rates are a bit higher compared to last year. This is aggregate data from our proprietary data set, based on primary sources that we use internally, with what we think is a robust/representative sample of enterprise software companies. The idea that software pricing and gross margins are coming under intense pressure is also not evident so far in our data - gross margins are in fact a bit higher compared to a year ago, as is net retention.

The big question: Are you seeing specific examples of the "AI apocalypse" manifesting now, with actual software companies, in the real world? Or is the market reacting to a potential future reckoning, which is not tied to fundamentals today? We would love to hear from you.

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