SaaS Benchmark Report 2020

Loading ...
Techceler...
Other
SaaS and Business Software
2020
EXPANSION SAAS 
BENCHMARKS
View the interactive report at saasbenchmarks.com
SEAN FANNING & KYLE POYAR
2
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
Go-to-Market 
Insights
TABLE OF CONTENTS
Enterprise 
Software is 
Recession 
Proof
Introduction
Participant 
Overview
Executive 
Summary
Talent 
Insights
Product 
Led Growth 
Insights
Financial & 
Operating 
Insights
1
2
3
4
5
6
7
8
3
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
INTRODUCTION
Objective data is critical to making the right 
strategic decisions that can propel your long-term 
growth. For this reason, we’re releasing the results 
of our fourth annual Expansion SaaS Benchmarks 
survey. This report was designed specifically to 
enable operators to compare themselves against 
their exact peers across the metrics that matter most 
in a SaaS business. This year’s survey was live from 
June to September. This 2020 benchmark report 
incorporates data from more than 1200 
respondents aggregated across prior surveys as 
well as more than 400 this year alone. 
Data from our 2020 survey answered the burning 
question on everyone’s mind: “What was the 
impact of COVID on enterprise software?” The 
answer: enterprise software is recession 
proof. 
This year’s benchmarks report also explores topics 
including executive diversity and founder attitudes, 
in addition to our usual insights on product led 
growth, go-to-market, and other data key to 
operating and growing a successful expansion 
stage software business.
4
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
THANKS TO OUR SURVEY PARTNERS
PARTICIPANT
OVERVIEW
6
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
DI S TR I B U T I O N B Y  G E O G R A PHY
DI S TR I B U T I O N B Y  A R R
Source: 2020 OpenView SaaS Metrics Survey, N=409.
46%
30%
5%
7%
12%
US
Europe
Canada
APAC Other
21%
15%
27%
15%
12%
10%
<$1M $1-2.5M $2.5-10M $10-20M $20-50M >$50M
7
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
38%
29%
3%
10%
4%
16%
CEO / Founder / Co-Founder
CFO / VP Finance
CMO / VP Marketing
COO / VP of Operations
CRO / VP of Sales
Other
DI S TR I B U T I O N B Y  
TA R G E T  C U S TO ME R  S I Z E
DI S TR I B U T I O N B Y  
RE S PO ND E NT  RO LE
Source: 2020 OpenView SaaS Metrics Survey, N=409.
2%
9%
21%
33%
35%
Consumer
Very small business
(VSB, <20 employees)
SMB (20-100 employees)
Midmarket (101-1,000 employees)
Enterprise  (>1,000 employees)
EXECUTIVE
SUMMARY
9
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
COMPANY PERFORMANCE BENCHMARKS
S I Z E  A N D  G R O W T H
Employees
Number of full-time equivalent employees at the end of Q2 2020.
Funding
Amount of equity capital raised to date.
Annual  Recurr ing Revenue (ARR)
Company annual recurring revenue (ARR) scale at the end of Q2 2020.
YoY Growth Rate
Change in annual recurring revenue at the end of Q2 2020 vs. Q2 2019.
F I N A N C I A L
Sales & Market ing Spend
Spending on sales & marketing, including headcount, as a % of ending ARR as of Q2 2020.
R&D Spend
Spending on R&D, including headcount, as a % of ending ARR as of Q2 2020.
Gross Margins
Subscription revenue less cost of goods sold divided by subscription revenue at the end of Q2 2020.
Monthly Burn Rate ( in 000’s)
Net monthly operating cash burn rate at the end of Q2 2020 (total $ lost each month, negative values = profit).
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
Months of subscription gross margin to recover the fully loaded cost of acquiring a customer.
Gross Dol lar Retent ion
Annual gross dollar retention (after churn, exclusive of upsells & expansion) seen in cohorts.
Net Dol lar Retent ion
Annual net dollar retention (after churn, inclusive of upsells & expansion) seen in cohorts.
D I V E R S I T Y
Women in Leadership
% of female representation among employees Director-level and above.
Underrepresented Minori t ies in Leadership
% of underrepresented minority representation among employees Director-level and above.
10
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
HOW TO READ THESE SLIDES
Source: 2020 OpenView SaaS Metrics Survey, N=409.
<$1M
$1-2.5M
$2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
10 (5-19)
25 (18-40)
52 (33-82)
93 (75-161)
220 (135-300) 495 (249-1054)
YoY Growth Rate
100% (12-177%) 60% (31-100%)
41% (22-84%)
46% (25-71%)
50% (18-75%)
21% (14-40%)
F I N A N C I A L
Sales & Market ing Spend
20% (13-37%)
30% (21-41%)
30% (20-41%)
35% (19-56%)
31% (20-40%)
29% (10-46%)
R&D Spend
68% (33-80%)
40% (30-60%)
32% (22-45%)
28% (20-40%)
27% (10-32%)
22% (10-30%)
Gross Margins
67% (23-80%)
75% (56-85%)
78% (70-85%)
79% (66-84%)
79% (72-84%)
75% (63-79%)
Monthly Burn Rate ($ in 000s)
$50 ($0-175)
$50 ($0-175)
$175 ($0-375)
$200 ($0-500)
$375 ($13-1,719)
[N/A]
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (3-11)
10 (5-15)
11 (8-15)
11 (11-15)
15 (11-30)
15 (11-21)
Gross Dol lar Retent ion
90% (55-95%)
90% (59-95%)
90% (85-97%)
87% (80-93%)
87% (80-95%)
90% (86-95%)
Net Dol lar Retent ion
99% (70-110%)
100% (82-105%)
103% (92-111%)
102% (92-110%)
105% (97-113%) 105% (96-111%)
D I V E R S I T Y
Women in Leadership
10% (0-33%)
20% (3-49%)
25% (19-34%)
29% (13-40%)
20% (10-30%)
15% (10-20%)
Underrepresented Minori t ies in Leadership
10% (0-25%)
0% (0-0%)
0% (0-20%)
0% (0-25%)
0% (0-20%)
0% (0-20%)
Rows represent common KPIs across 
categories including size and growth, 
financial, value drivers, and diversity 
11
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
HOW TO READ THESE SLIDES
Source: 2020 OpenView SaaS Metrics Survey, N=409.
<$1M
$1-2.5M
$2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
10 (5-19)
25 (18-40)
52 (33-82)
93 (75-161)
220 (135-300) 495 (249-1054)
YoY Growth Rate
100% (12-177%) 60% (31-100%)
41% (22-84%)
46% (25-71%)
50% (18-75%)
21% (14-40%)
F I N A N C I A L
Sales & Market ing Spend
20% (13-37%)
30% (21-41%)
30% (20-41%)
35% (19-56%)
31% (20-40%)
29% (10-46%)
R&D Spend
68% (33-80%)
40% (30-60%)
32% (22-45%)
28% (20-40%)
27% (10-32%)
22% (10-30%)
Gross Margins
67% (23-80%)
75% (56-85%)
78% (70-85%)
79% (66-84%)
79% (72-84%)
75% (63-79%)
Monthly Burn Rate ($ in 000s)
$50 ($0-175)
$50 ($0-175)
$175 ($0-375)
$200 ($0-500)
$375 ($13-1,719)
[N/A]
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (3-11)
10 (5-15)
11 (8-15)
11 (11-15)
15 (11-30)
15 (11-21)
Gross Dol lar Retent ion
90% (55-95%)
90% (59-95%)
90% (85-97%)
87% (80-93%)
87% (80-95%)
90% (86-95%)
Net Dol lar Retent ion
99% (70-110%)
100% (82-105%)
103% (92-111%)
102% (92-110%)
105% (97-113%) 105% (96-111%)
D I V E R S I T Y
Women in Leadership
10% (0-33%)
20% (3-49%)
25% (19-34%)
29% (13-40%)
20% (10-30%)
15% (10-20%)
Underrepresented Minori t ies in Leadership
10% (0-25%)
0% (0-0%)
0% (0-20%)
0% (0-25%)
0% (0-20%)
0% (0-20%)
Columns represent distribution of 
responses from companies at varying 
levels of ARR, from <$1M to >$50M
12
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
HOW TO READ THESE SLIDES
Source: 2020 OpenView SaaS Metrics Survey, N=409.
<$1M
$1-2.5M
$2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
10 (5-19)
25 (18-40)
52 (33-82)
93 (75-161)
220 (135-300) 495 (249-1054)
YoY Growth Rate
100% (12-177%) 60% (31-100%)
41% (22-84%)
46% (25-71%)
50% (18-75%)
21% (14-40%)
F I N A N C I A L
Sales & Market ing Spend
20% (13-37%)
30% (21-41%)
30% (20-41%)
35% (19-56%)
31% (20-40%)
29% (10-46%)
R&D Spend
68% (33-80%)
40% (30-60%)
32% (22-45%)
28% (20-40%)
27% (10-32%)
22% (10-30%)
Gross Margins
67% (23-80%)
75% (56-85%)
78% (70-85%)
79% (66-84%)
79% (72-84%)
75% (63-79%)
Monthly Burn Rate ($ in 000s)
$50 ($0-175)
$50 ($0-175)
$175 ($0-375)
$200 ($0-500)
$375 ($13-1,719)
[N/A]
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (3-11)
10 (5-15)
11 (8-15)
11 (11-15)
15 (11-30)
15 (11-21)
Gross Dol lar Retent ion
90% (55-95%)
90% (59-95%)
90% (85-97%)
87% (80-93%)
87% (80-95%)
90% (86-95%)
Net Dol lar Retent ion
99% (70-110%)
100% (82-105%)
103% (92-111%)
102% (92-110%)
105% (97-113%) 105% (96-111%)
D I V E R S I T Y
Women in Leadership
10% (0-33%)
20% (3-49%)
25% (19-34%)
29% (13-40%)
20% (10-30%)
15% (10-20%)
Underrepresented Minori t ies in Leadership
10% (0-25%)
0% (0-0%)
0% (0-20%)
0% (0-25%)
0% (0-20%)
0% (0-20%)
Each cell represents the median 
performance of a company, as well as 
the range (bottom quartile – top quartile) of 
each metric at each respective ARR scale
13
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SAAS METRICS BY ARR
Source: 2020 OpenView SaaS Metrics Survey, N=409.
<$1M
$1-2.5M
$2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
10 (5-19)
25 (18-40)
52 (33-82)
93 (75-161)
220 (135-300) 495 (249-1054)
YoY Growth Rate
100% (12-177%) 60% (31-100%)
41% (22-84%)
46% (25-71%)
50% (18-75%)
21% (14-40%)
F I N A N C I A L
Sales & Market ing Spend
20% (13-37%)
30% (21-41%)
30% (20-41%)
35% (19-56%)
31% (20-40%)
29% (10-46%)
R&D Spend
68% (33-80%)
40% (30-60%)
32% (22-45%)
28% (20-40%)
27% (10-32%)
22% (10-30%)
Gross Margins
67% (23-80%)
75% (56-85%)
78% (70-85%)
79% (66-84%)
79% (72-84%)
75% (63-79%)
Monthly Burn Rate ($ in 000s)
$50 ($0-175)
$50 ($0-175)
$175 ($0-375)
$200 ($0-500)
$375 ($13-1,719) $0 ($0-375)
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (3-11)
10 (5-15)
11 (8-15)
11 (11-15)
15 (11-30)
15 (11-21)
Gross Dol lar Retent ion
90% (55-95%)
90% (59-95%)
90% (85-97%)
87% (80-93%)
87% (80-95%)
90% (86-95%)
Net Dol lar Retent ion
99% (70-110%)
100% (82-105%)
103% (92-111%)
102% (92-110%)
105% (97-113%) 105% (96-111%)
D I V E R S I T Y
Women in Leadership
10% (0-33%)
20% (3-49%)
25% (19-34%)
29% (13-40%)
20% (10-30%)
15% (10-20%)
Underrepresented Minori t ies in Leadership
10% (0-25%)
0% (0-0%)
0% (0-20%)
0% (0-25%)
0% (0-20%)
0% (0-20%)
14
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SAAS METRICS BY ARR (2020 vs. 2019)
Source: 2020 OpenView SaaS Metrics Survey, N=409.
<$1M
$1-2.5M
$2.5M-10M $10-20M
$20-50M
>$50M
S I Z E  A N D  G R O W T H
Employees
10 (↑ 2)
25 (0)
52 (↑ 5)
93 (↓ 7)
220 (↑ 40)
495 (↓ 60)
YoY Growth Rate
100% (↑ 20%)
60% (↓ 20%)
41% (↓ 9%)
46% (↓ 4%)
50% (↓ 10%)
21% (↓ 8%)
F I N A N C I A L
Sales & Market ing Spend
20% (↓ 10%)
30% (0%)
30% (↓ 5%)
35% (↓ 5%)
31% (↓ 11%)
29% (↓ 9%)
R&D Spend
68% (↑ 18%)
40% (↓ 8%)
32% (↑ 2%)
28% (↓ 2%)
27% (↓ 3%)
22% (↑ 2%)
Gross Margins
67% (↓ 3%)
75% (↑ 2%)
78% (↓ 2%)
79% (↑ 4%)
79% (↑ 4%)
75% (0%)
Monthly Burn Rate ($ in 000s)
$50 ($0)
$50 ($0)
$175 ($0)
$200 (↓ $175)
$375 ($0)
$0 (↓ $50)
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (↑ 3)
10 (↑ 2)
11 (0)
11 (↓ 4)
15 (0)
15 (0)
Gross Dol lar Retent ion
90% (0%)
90% (0%)
90% (0%)
87% (↓ 1%)
87% (↓ 2%)
90% (↑ 2%)
Net Dol lar Retent ion
99% (↓ 1%)
100% (0%)
103% (↑ 3%)
102% (↑ 7%)
105% (↑ 3%)
105% (↑ 8%)
D I V E R S I T Y
Women in Leadership
10% (0%)
20% (-5%)
25% (+5%)
29% (+4%)
20% (-5%)
15% (-14%)
Underrepresented Minori t ies in Leadership
10% (N/A)
0% (N/A)
0% (N/A)
0% (N/A)
0% (N/A)
0% (N/A)
15
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SAAS METRICS BY MOST RECENT FUNDING
Angel / Seed
Series A
Series B
Series C
Series D+
S I Z E  A N D  G R O W T H
Employees
16 (8-27)
46 (25-88)
109 (53-195)
120 (74-196)
272 (173-557)
Funding
$3M ($0.5-3M)
$8M ($8-15M)
$28M ($15-43M)
$43M ($28 -63M)
$88M ($43-100M)
Annual  Recurr ing Revenue (ARR)
$2M ($0.5-2M)
$6M ($2-6M)
$15M ($6-15M)
$15M ($6-35M)
$50M ($35-50M)
YoY Growth Rate
60% (26-100%)
60% (30-105%)
44% (27-74%)
35% (14-64%)
27% (19-50%)
F I N A N C I A L
Sales & Market ing Spend
25% (13-40%)
30% (20-44%)
40% (26-60%)
31% (20-43%)
37% (20-47%)
R&D Spend
50% (30-80%)
30% (20-50%)
30% (23-44%)
29% (15-35%)
29% (12-40%)
Gross Margins
76% (40-85%)
75% (62-86%)
75% (67-85%)
75% (63-81%)
78% (73-81%)
Monthly Burn Rate ($ in 000s)
$50 ($0-175)
$175 ($50-375)
$375 ($50-625)
$375 ($50-750)
$375 ($0-1,531)
S A A S  V A L U E  D R I V E R S
CAC Payback (months)
8 (5-14)
11 (8-15)
15 (11-15)
13 (11-21)
15 (11-28)
Gross Dol lar Retent ion
90% (78-95%)
90% (76-96%)
90% (80-96%)
86% (79-90%)
90% (83-96%)
Net Dol lar Retent ion
100% (87-110%)
103% (91-113%)
103 (98-112%)
103% (92-110%)
105% (96-113%)
D I V E R S I T Y
Women in Leadership
23% (0-38%)
22% (6-38%)
25% (15-40%)
28% (11-36%)
16% (10-36%)
Underrepresented Minori t ies in Leadership
0% (0-29%)
0% (0-15%)
1% (0-10%)
3% (0-15%)
6% (0-20%)
Source: 2020 OpenView SaaS Metrics Survey, N=409.
ENTERPRISE 
SOFTWARE
IS RECESSION 
PROOF
17
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
17
Proprietary ©2020 OpenView Advisors, LLC. All Rights R served
ENTERPRISE SOFTWARE IS RECESSION PROOF
Public SaaS is more valuable than ever 
before – after falling nearly 50% from 
all-time-highs in March, SaaS valuations 
have rallied on the back of persistent 
long-term tailwinds. Plus, as investors 
mature in their evaluation of B2B 
markets, unit economics & defensibility, 
the future price uncertainty of the assets 
seems to be reduced. These factors 
have created exuberance in the 
market.
Despite the uncertainty of the COVID-
induced economic recession enterprise 
software is largely proving to be 
recession proof as enterprise digital 
transformations continue.
% Change in Index
Source: Pitchbook as of 9/10/2020. SaaS index multiples calculated as enterprise value / revenue and represent 
median value as of each date for the ~70 public SaaS companies OpenView tracks.
-50%
0%
50%
100%
150%
200%
SaaS
NASDAQ
S&P
1/1/20
10/30/20
18
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
18
Proprietary ©2020 OpenView Advisors, LLC. All Rights R served
PUBLIC MARKET DEMAND FOR SAAS REMAINS ROBUST
Investor demand for public software 
equities remains incredibly strong.
And the companies that are going 
public in 2020 are extremely 
impressive. They’re largely growing 
faster and sustaining high growth 
longer, growing more efficiently, 
raising less capital at scale, and getting 
to be on average older compared to 
previous IPO cohorts. 
These summary data are even more 
impressive when you exclude outliers 
like Zoom in 2019 and Snowflake in 
2020.
Source: Pitchbook as of 9/10/2020
IPOs
Capital
TTM Financials (per S-1)
Count Age @ 
IPO
Raised
Revenue Growth Gross 
Margin
Net Dollar 
Retention
CAC 
Payback
2018
16
12.2
$300.8
$168.1
39.2%
71.2%
115%
30.0 
months
2019
12
11.3
$220.0
$250.3
57.7%
74.9%
131%
19.2 
months
2020
11
12.9
$283.5
$155.1
51.0%
76.6%
120%
18.5 
months
IPO Data
19
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
19
Proprietary ©2020 OpenView Advisors, LLC. All Rights R served
CUSTOMER DEMAND FOR SAAS REMAINS STRONG
Source: 2020 OpenView SaaS Metrics Survey, N=409. 
Enterprise SaaS has been recession 
proof and the buying environment 
for software remains robust. Roughly 
~2/5 of respondents to our 2020 
survey reported less than a 10% 
decrease in expected 2020 ARR 
while ~1/5 of respondents saw no 
impact to budget at all.
Even after aggressive expense cuts 
and revenue reforecasts many 
companies maintained aggressive 
topline revenue targets.
21%
18%
34%
18%
7%
2%
No impact / positive impact 0 to -9% impact
-10 to -24% impact
-25 to -49% impact
-50 to -99% impact
N/A / impact is unknown
% Impact from COVID on Expected Budget
20
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
20
Proprietary ©2020 OpenView Advisors, LLC. All Rights R served
SO, IT’S TIME FOR COMPANIES TO HIT THE GAS AGAIN
2018
2019
2020
Growth Rate
54%
48%
43%
Net Dollar Retention
100%
99%
102%
Payback Period 12 months
11 months
11 months
R&D Spend as % of Revenue
30%
30%
30%
Sales & Marketing Spend as % 
of Revenue
40%
35%
30%
Source: 2020 OpenView SaaS Metrics Survey, N=409. 
Note*: Excludes companies <$1M ARR.
Companies reacted aggressively to COVID, 
but our data suggests companies are 
acquiring and retaining their customers as 
efficiently as ever. They’re just not spending 
nearly enough on acquisition to reach 
those customers (sales & marketing 
expense fell 14% YoY) who have 
demonstrated they still want to invest in 
digital transformation! As a result, median 
growth rates have dropped from 2019.
The buying environment remains 
strong, so it is time to get back to 
acquiring customers… or get left 
behind!
Historical SaaS Benchmarks by Year* (Median)
GO-TO-MARKET
INSIGHTS
22
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
0%
25%
50%
75%
100%
125%
150%
175%
200%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Median
Top Quartile
GROWTH RATE BY COMPANY ARR
Growth rate is highly correlated with 
SaaS valuations. Software companies 
grow rapidly in their early stages – a 
typical company doubles YoY and a 
top quartile company nearly triples. 
Except for at the very earliest stages, 
growth rates have fallen vs. 2019 but 
as noted, growth (likely) didn’t slow as 
a result of stunted customer demand 
except in the hardest hit industries (i.e. 
hospitality and retail). Rather, 
companies lost their confidence 
investing in revenue generating 
activities.
ARR Scale
Growth Rate (Annual)
2019 Median
Source: 2020 OpenView SaaS Metrics Survey, N=409.
23
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SALES AND MARKETING SPEND BY ARR
Sales and marketing expenses 
are normally a SaaS company’s 
largest areas of spend after they 
hit ~$2.5M of ARR (before which 
point product & engineering 
dominates).
ARR Scale
0%
10%
20%
30%
40%
50%
60%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Sales and Marketing Spend (% of ARR)
Source: 2020 OpenView SaaS Metrics Survey, N=409.
2019 Median
24
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SALES AND MARKETING SPEND BY 
DOMINANT SALES CHANNEL*
Best-in-class companies selling 
primarily through self service 
and freemium can bring sales 
and marketing spend well 
below 20% of ARR.
As you look to reach your 
customers where they work, you 
need to reach them where they 
live. Leveraging an “always 
open” self serve model can 
drive more efficient acquisition.
Source: 2020 OpenView SaaS Metrics Survey, N=409.
Note*: Dominant sales channel is sales channel with greatest ARR contribution per account
Dominant Sales Channel
0%
10%
20%
30%
40%
50%
60%
Self Serve
Inside
Field
Indirect
Bottom Quartile
Median
Top Quartile
Sales and Marketing Spend (% of ARR)
25
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
DOMINANT SALES CHANNEL* BY 
CUSTOMER TYPE
Inside sales is the most popular 
sales channel in SaaS and is 
used to reach customers of all 
sizes, even very small 
businesses.
Make sure sales channels are 
supported by your average deal 
size (do you make enough to 
pay competitive sales 
commissions?) and how your 
customers prefer to buy.
Target Customer Type
Source: 2020 OpenView SaaS Metrics Survey, N=409.
Note*: Dominant sales channel is sales channel with greatest ARR contribution per account
13%
9%
4%
50%
62%
50%
33%
13%
18%
32%
53%
24%
11%
14%
13%
VSB
SMB
Midmarket
Enterprise
Self Serve
Inside
Field
Indirect
Sales Channel Mix (% of ARR)
26
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
0
5
10
15
20
25
30
35
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Top Quartile
Median
Bottom Quartile
MONTHS TO RECOVER CAC (CAC PAYBACK)
ARR Scale
CAC Payback in Months*
CAC payback lengthens when 
companies achieve greater ARR scale 
– watch out for worsening your go-to-
market efficiency as you grow. We’re 
encouraged by this year’s CAC 
payback data, which suggests 
companies have adapted messaging 
and are still reaching their customers 
effectively.
In our opinion, companies are still 
under-reporting their true CAC Payback 
period. Be sure your payback is fully 
loaded (including overhead like rent) 
and that it is gross margin affected.
Source: 2020 OpenView SaaS Metrics Survey, N=409.
Note*: Excluded companies <$1M ARR because they don’t have enough data for predictable CAC payback..
2019 Median
PRODUCT LED
GROWTH
INSIGHTS
28
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
WHAT IS PRODUCT LED GROWTH?
Product led growth (PLG) is an end user-focused growth model 
that relies on the product itself as the primary driver of customer 
acquisition, conversion and expansion.
PLG is employed by many of the fastest growing software 
companies including standout public companies.
29
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
PRODUCT LED GROWTH IS YOUR 
SECRET WEAPON
30
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
NOT ALL ENTERPRISE SAAS IS 
CREATED EQUAL; THE CASE FOR PLG
Product-led companies are 
always “open for business”, and 
their lower entry prices are less 
susceptible to budget cuts. In 
fact, the SaaS companies in our 
PLG Index trade at a nearly 50% 
premium to the broader SaaS 
index, proving that product led 
revenue is more valuable.
% Change in Index
Source: Pitchbook as of 9/10/2020. SaaS index multiples calculated as enterprise value / revenue and represent median 
value as of each date for the ~70 public SaaS companies OpenView tracks.
-50%
0%
50%
100%
150%
200%
250%
300%
PLG
SaaS
1/1/20
10/30/20
31
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
ADOPTION OF PRODUCT LED 
GROWTH STRATEGIES
Despite our best efforts at evangelizing 
PLG, most companies are still 
experimenting, but relatively few have 
gone ‘all in’ (just 27% of respondents 
report PLG being fundamental to their 
business).
Free trials remain the most popular 
product led growth strategy, but a free 
trial is not enough to be PLG –
companies need to rally their entire 
organizations – from sales, marketing, 
product, engineering and success –
around product led growth strategies.
PLG 
Companies
All
Companies
Free trial offering
90%
46%
In-product onboarding
71%
29%
Product analytics for decision making
69%
32%
Self-service buying experience
67%
26%
Bottoms-up sales
67%
38%
Dedicated growth resources (FTEs)
53%
28%
Freemium offering
52%
25%
Product Qualified Leads
47%
19%
Source: 2020 OpenView SaaS Metrics Survey, N=409. PLG Companies defined as those leveraging more than three of the PLG 
strategies surveyed. 
32
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
PRODUCT LED GROWTH BY 
TARGET CUSTOMER SEGMENT
Product led growth is especially 
prevalent among companies 
targeting VSB/SMB customers.
That said, 3 in 10 companies 
targeting large enterprises also 
employ PLG tactics – PLG is for 
the enterprise, too. 
42%
37%
34%
27%
58%
63%
66%
73%
VSB
SMB
Midmarket
Enterprise
PLG Non-PLG
Target Segment
% of respondents
Source: 2020 OpenView SaaS Metrics Survey, N=409. PLG Companies defined as those leveraging more than three of the PLG 
strategies surveyed. 
33
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
PRODUCT LED GROWTH ACVs 
BY ARR SCALE
85%
89%
50%
50%
62%
33%
15%
11%
36%
43%
13%
22%
14%
7%
25%
45%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
<$25k
$25-100k
>$100k
% of respondents
Source: 2020 OpenView SaaS Metrics Survey, N=409. PLG Companies defined as those leveraging more than three of the PLG 
strategies surveyed. 
PLG companies land with a lower 
CAC at more digestible ACVs to 
start, but can drive significant 
expansion in accounts over time as 
the product spreads throughout 
large organizations.
These companies can be much less 
specific in their ideal customer 
profile as they search for product 
market fit, and over time target high 
value customers specifically and 
more efficiently.
34
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
0%
20%
40%
60%
80%
100%
120%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
PLG
Non-PLG
PRODUCT LED BUSINESSES 
GROW FASTER AT SCALE
PLG companies grow slowly in the 
very early days, as it takes time to 
build a community of free users and 
convert those users to paying 
customers. 
After $10M in ARR, the magic of 
PLG kicks in and these companies 
can scale faster. They aren’t as 
limited by their ability to hire, 
onboard and feed leads to 
enterprise sales reps and they’ve 
built up significant goodwill from 
their users.
ARR Scale
Median Growth Rate
Source: 2020 OpenView SaaS Metrics Survey, N=409. PLG Companies defined as those leveraging more than three of the PLG 
strategies surveyed. 
FINANCIAL &
OPERATING
INSIGHTS
36
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
GROSS MARGIN ON SUBSCRIPTION REVENUE
Gross margin is a key and often 
overlooked lever in any business 
– 7/10 companies surveyed 
have gross margins in excess of 
70%. Best-in-class companies 
across all ARR scales see gross 
margins of at least 80%.
As a reminder, gross margin 
should always include hosting, 
as well as any services and 
customer onboarding costs.
15%
14%
16%
15%
19%
11%
10%
<50% 50 to 70% 70 to 75% 75 to 80% 80 to 85% 85 to 90% >90%
Source: 2020 OpenView SaaS Metrics Survey, N=409.
Gross Margin on Subscription Revenue Distribution
37
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
GROSS DOLLAR RETENTION RATES
12%
4%
6%
25%
53%
<60%
60 to 70%
70 to 80%
80 to 90%
>90%
Gross Dollar Retention Rates (Annual)
Top tier gross retention rates are 
consistent (~85-90%) regardless 
of last round or ARR scale. 
Similarly, these rates are 
consistent regardless of bull or 
bear market conditions. Across 
all segments, GDR was within +-
2% from 2019 to 2020. 90%+ 
Gross dollar retention is now 
“table stakes” in enterprise 
SaaS.
Source: 2020 OpenView SaaS Metrics Survey, N=409.
38
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
17%
11%
11%
19%
23%
7%
6%
6%
<85%
85 to 95%
95 to 100%
100 to 105%
105 to 115%
115 to 125%
125 to 135%
>135%
NET DOLLAR RETENTION RATES
2 in 5 companies surveyed 
reported net dollar retention 
over 105% and 1 in 10 
reported NDR over 125%.
Net dollar retention tells the 
whole story about what is 
happening within your customer 
base and should be tracked at 
the cohort level to visualize 
trends over time. 
Net Dollar Retention Rates (Annual)
Source: 2020 OpenView SaaS Metrics Survey, N=409.
39
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
NET RETENTION BY TARGET CUSTOMER TYPE
Regardless of segment, a 
competitive NDR rate lies 
between 100% and 110%. 
However, VSB and SMB 
segments introduce greater 
variance. As SMBs become 
smaller and smaller, net 
retention can start to mimic B2C 
software.
Target Customer Type
Net Dollar Retention Rates (Annual)
60%
70%
80%
90%
100%
110%
120%
VSB
SMB
Midmarket
Enterprise
Bottom Quartile
Median
Top Quartile
Source: 2020 OpenView SaaS Metrics Survey, N=409.
40
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
EQUITY CAPITAL RAISED BY ARR*
With the rise of VC growth funds, 
mega-rounds and record-
breaking VC fund sizes as well 
as PE firms diversifying strategies 
in order to deploy capital, 
companies have access to more 
and more cash.
Even more modest companies 
($10-$20M ARR) can raise large 
amounts of equity capital (~2/3 
have raised >$20M)
Equity Capital Raised
79%
48%
30%
7%
14%
36%
23%
10%
8%
9%
29%
17%
6%
8%
3%
16%
57%
71%
25%
7%
3%
2%
10%
24%
58%
0%
20%
40%
60%
80%
100%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
< $5M
$5-10M
$10-20M
$20-50M
>$50M
ARR Scale
Source: 2020 OpenView SaaS Metrics Survey, N=409.
Note*: Excludes companies that haven’t raised capital
41
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
MONTHLY CASH BURN
Burn was subject to two forces. 
Companies’ responses to COVID 
would intuitively decrease burn. 
Large amounts of investor 
capital would intuitively raise it. 
As both customer and investor 
demand for software assets 
remains strong, burn remained 
consistent with last year’s report.
Source: 2020 OpenView SaaS Metrics Survey, N=409. $0 burn implies breakeven or profitable.
ARR Scale
Monthly Cash Burn ($000’s)
$0
$50
$100
$150
$200
$250
$300
$350
$400
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
2020 Median
2019 Median
TALENT
INSIGHTS
43
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
NUMBER OF EMPLOYEES BY ARR SCALE
In the early stages, companies 
have one employee for every 
$100,000 in ARR. As companies 
scale to $20M, that figure jumps 
to $150,000. Best-in-class is 
$200,000+. 
On average, 35% of employees 
are in Engineering and another 
20% are in Sales. The next 
largest functions are Product 
(12%) and Customer Success 
(11%). 
ARR Scale
0
200
400
600
800
1000
1200
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Bottom Quartile
Median
Top Quartile
Number of Employees
Source: 2020 OpenView SaaS Metrics Survey, N=409.
44
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
MIX OF EMPLOYEES BY FUNCTION, BY 
ARR SCALE
At the early stages, most startup 
employees are in Product & 
Engineering roles. However, as 
companies expand, they need to 
rapidly grow Customer Success and 
specialized functions to sustain 
rapid revenue growth. 
We notice that Engineering tends to 
be the main tradeoff as companies 
scale – once the product is built, 
commercial activities take priority.
FTE Mix by Function
45%
30%
33%
31%
32%
27%
13%
13%
12%
11%
10%
13%
9%
10%
10%
9%
10%
10%
12%
19%
17%
21%
22%
21%
9%
14%
12%
12%
11%
11%
12%
15%
15%
16%
16%
18%
<$1M
$1-2.5M
$2.5-10M
$10-20M
$20-50M
>$50M
Engineering
Product
Marketing
Sales
Customer Success
Other
ARR Scale
Source: 2020 OpenView SaaS Metrics Survey, N=409.
45
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
MIX OF EMPLOYEES BY FUNCTION, 
BY DOMINANT SALES CHANNEL
Companies leveraging self 
service or freemium channels 
commit a greater proportion of 
their resources to engineering 
and product – this is particularly 
evident in PLG companies who 
rely on organic strategies and 
product awareness to drive 
inbound demand.
32%
35%
34%
39%
12%
11%
12%
18%
8%
9%
10%
17%
17%
18%
20%
8%
10%
12%
12%
7%
21%
14%
13%
12%
Indirect
Field
Inside
Self Serve
Engineering
Product
Marketing
Sales
Customer Success
Other
FTE Mix by Function
ARR Scale
Source: 2020 OpenView SaaS Metrics Survey, N=409.
46
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
FEMALE-LED TEAMS PERFORM BETTER, BUT 
RAISE LESS CAPITAL
While female-led teams 
outperform their peers (faster 
growth), they are doing so with 
far less equity capital ($8M vs. 
$15M).
Although diversity has been a 
trend in this report for years, it’s 
important to remember you 
can’t just talk the talk and work 
still needs to be done.
46%
43%
$8M
$15M
$0M
$18M
40%
50%
50% or more female
Less than 50% female
Median Growth Rate
Median Equity Capital
Growth Rate (Annual)Equity Capital RaisedSource: 2020 OpenView SaaS Metrics Survey, N=409.
47
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
PROGRESS ON GENDER EQUALITY
Larger companies continue to fare 
slightly better when it comes to 
gender diversity within 
management teams, and, after 
stagnation in 2019, we’re seeing 
slight progress. 
42% of respondents had one or 
more female BoD member, which is 
an uptick from last year. 
Meanwhile, 6% had gender parity 
on the BoD and 14% had parity 
among their leadership team. 
2017
2018
2019
2020
1+ female BoD 
member
29%
37%
38%
42%
Gender parity 
in leadership
12%
13%
14%
14%
Gender parity 
on BoD
4%
8%
8%
6%
Source: 2020 OpenView SaaS Metrics Survey, N=409.
ABOUT THE
AUTHORS
49
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
SEAN FANNING
Sean supports corporate development at 
OpenView, including helping the firm’s portfolio 
establish strategic relationships with potential 
alliance partners and acquirers, advising on and 
executing M&A and capital raise transactions, 
supporting portfolio exit planning activities, and 
communicating trends across M&A, PE, and public 
markets. 
Read Sean’s weekly Capital Markets Roundup 
here!
sean@ov.vc
@seandougfan
/seandfanning
Director, Corporate Development
50
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
Kyle helps OpenView’s portfolio companies 
accelerate top-line growth through deep insights 
into their market landscape and customers. He 
leads segmentation, positioning, channel/partner 
strategy, new market entry and packaging/pricing 
initiatives, partnering closely with portfolio 
leadership teams.
ky le@ov.vc
@poyark
/ky le-poyar
VP of Growth
KYLE POYAR
51
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
Dan works with OpenView’s portfolio companies to 
achieve and sustain best-in-class growth. He’s 
supported OpenView’s Growth, Capital Markets, 
and Investment teams to work with the world’s best 
expansion stage software companies. 
kn ight@ov.vc
@danknightnews1
/dan-c-kn ight
DAN KNIGHT
Analyst, Growth Team
52
O V |  2 0 2 0  E X P A N S I O N  S A A S  B E N C H M A R K S
Proprietary ©2020 OpenView Advisors, LLC. All Rights Reserved
Our mission is to improve people’s 
working lives.
We do this by: 
•
Investing in the best software 
companies
• Helping our portfolio companies 
accelerate growth and become 
market leaders
Learn more at ov.vc
THE EXPANSION STAGE SOFTWARE VC
THANK
YOU