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 continued to closely monitor data from the software index, given the steep declines in public software company multiples over the last few weeks. Consistent with last month, we are not seeing software company fundamentals map to a "SaaSpocalypse" narrative.
Both median and top quartile software growth ticked up compared to last year in our data, and retention has remained quite strong, with median at 90% gross and 100% net: unchanged from a year ago. Markers of sales efficiency, like payback periods and LTV: CAC have been trending up for a few months now; quite possibly enabled by AI efficiencies in GTM.
The big question: Are you seeing different trends in your data? We would love to hear from you.
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