Note: SaaSForward is a biweekly in-depth analysis of global SaaS trends.
Billion-dollar ARR is the new $100 mn ARR: 00:07
Funding blitzkrieg: Big cheques and high-speed investments: 01:13
The Venture Investment world is no more like classical chess: 02:32
Salesforce announcement: Would you still call NFTs a fad? 03:17
Billion-dollar ARR is the new $100 mn ARR
Seven years ago, a hundred million dollar ARR was an elusive club. Adobe had just switched to SaaS and few other public software companies started making this switch. But today a hundred million in ARR, whether it is a new startup or a public tech company, is no more elusive. In fact, about 24 of them have reached the billion-dollar ARR stage. Correct, ARR not valuation.
In the last fiscal year, four more companies achieved near billion-dollar ARR, specifically MongoDB, Zscaler, CloudFlare and ZoomInfo. And among them ZoomInfo is the most exciting since from its founding till its IPO they had only raised about $7 million in funding. Vivo, Salesforce, Atlassian are other Value SaaS companies that are in the billion-dollar ARR club. ZoomInfo will soon join them.
Funding blitzkrieg: Big cheques and high-speed investments
In the last two years, the venture investment world has been operating at a blitzkrieg pace, way faster than the dot com era. In fact, it is the fastest in the last 40 years, and this does not even involve the craze that is pouring into web 3.0.
Markets go through boom-and-bust cycles. Therefore, some investors have started sounding the conch shell of ‘the bear cycle is near’ and that is a problem for companies that are hyper-inflated.
But what about those that are operating on top of solid fundamentals? What about those billion-dollar ARR companies with fat margins?
There are many who are convinced that we are not even scratching the surface of software and SaaS. Therefore, to corner the next decade-or-two outliers, they are changing the rules of the game when it comes to investment. Tiger Global, Insight Partners, in addition to writing big cheques, are moving at a speed that is unprecedented. From decision-making to money-in-the-bank for an investment is being done in two weeks. And this is good news for founders as it tilts the power of choice in their favour.
The venture investment world is no more like classical chess
Most founders, like the ZoomInfo team, found out that you don't need a lot of capital to get to a hundred million ARR or even a billion dollars in ARR. So, they are saying if investors can just support them and not come in their way of building their business, they would prefer to pick and work with them. This is why Tiger Global and Insight Partners are getting a lot of preference from founders.
So, the venture investment world is no more like classical chess; it is a lot more like blitz chess, and Tiger is really proving out to be like Hikaru Nakamura, the blitz’s world champion.
Salesforce announcement: Would you still call NFTs a fad?
Finally, in the last week, Salesforce had announced that it will be developing its own NFT platform. That should tell you something if you're still thinking that NFT and web 3.0 are a fad. It is true that marketing is always ahead of reality, as marketing should always be. However, no software when that campaign was launched in 2003, is also ahead of its reality. So, you should take some cues about whether web 3.0 is still a fad or not.
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