This is how much VCs have lowered revenue expectations for seed via Series B – TechCrunch

Startups

New data from Kruze Consulting shows how much the venture capital fundraising market for startups has changed in recent quarters.

Kruze, which provides accounting, tax and venture capital related services to private technology companies, has access to hard data on startup performance. Healy Jones, vice president of financial planning and analysis at Kruze and a former venture capitalist, has put some of that information to work, using aggregated, anonymized data from startup funding rounds to describe how much revenue startups earn over time. reporting on various fundraising benchmarks.

We looked at how quickly revenue averages have fallen for startups approaching first-time fundraising events in the past nine months compared to previous years.

The results are simple: software startups generally increase early phases (via Series B) with lower revenue totals in recent quarters than in previous years. Data from hundreds of early-stage software (SaaS) fundraisers indicates that startup growth rates are not accelerating, although there is one important exception that we’ll discuss.

I don’t want the data behind the paywall, so before we get into what’s happening and why, here’s the raw information from Jones and Kruze. Note that the percentage changes in ARR levels have been recalculated by The Exchange from shared data to allow for a few more decimal places:

Data via Kruze. Numbers are averages. Data from over 200 SaaS fundraisers.

What does all that mean? Let’s talk about it.

Lower revenues and evolving growth rates

The data indicates that in the seed, Series A and Series B rounds, a recent and rapid drop in revenue has been reported by the SaaS startups. It also shows that seed and Series A software companies grew at slower growth rates from 2019 through Q1 2021.

Leave a Reply

Your email address will not be published.