New Data From KeyBanc Demonstrates SAAS Companies Poised to Power the Post-Pandemic Recovery in 2022

New Data From KeyBanc Demonstrates SAAS Companies Poised to Power the Post-Pandemic Recovery in 2022 by Louis Lehot

While the pandemic shutdowns of 2020 have led to supply chain disruptions, dampening growth across the physical universe, SAAS companies have rebounded strongly as the workforce relied on accelerated digital transformation to live, work, and play.

New data demonstrates that SAAS companies are poised for robust growth in 2022. A recent report from KeyBanc Capital Markets (KBCM) analyzes survey results of private SaaS companies conducted in June and July 2021. For this year’s survey, KBCM included responses from senior executives at more than 350 companies.

Below are some of the key findings from the survey analysis.

  • KBCM found a re-acceleration of growth as companies recovered from the economic disruptions caused by COVID-19.
  • Survey respondent forecasts for 2021 show growth levels increasing back to a median of 36% for companies with more than $5 million dollars in annual recurring revenue (ARR), as the disruptions from COVID-19 become less severe.
  • Like many industries, the global private SaaS sector experienced a slowdown in growth during 2020. Median growth slowed to 28%, notably below the pre-pandemic range of 35–40% which the survey has historically polled.
  • Median ARR historical growth of 28% aligns with Fall 2020 SaaS Survey COVID Edition results. Historically, median growth for participants in our surveys has been in the 35–40% range, underlining COVID’s impact on SaaS businesses in 2020.
  • Forecasted growth for 2021 was 36%, significantly higher than for 2020.
  • Exit expectations on public listings were so high that they nearly equaled those focusing on acquisition by both financial sponsors and strategic buyers.
  • Valuation statistics showed a median multiple of 8.4 times annual recurring revenue in a capital raise or change of control since January 2020.
  • As expected, companies anticipating an eventual public listing are growing significantly faster and burning more — specifically on Sales and Marketing. These companies are also able to drive more up sell and expansion revenue evidenced by strong net dollar retention.

The full survey results can be found here.

About the author:

Louis Lehot:

Louis Lehot is a partner and business lawyer at the international law firm, Foley & Lardner LLP. Louis operates from three of the firms’ offices based in Silicon Valley, San Francisco, and Los Angeles. Louis Lehot is a member of several teams and groups in the firm such as the Private Equity & Venture Capital, M&A and Transactions Practices, and also the Technology, Health Care, Life Sciences, and Energy Industry Teams. Louis Lehot assists and advises his clients at all stages of their career, guides them to achieve hyper growth, go public, and obtain optimal liquidity events through an array of legal and business instruments, processes, and strategies. He has experience in handling a number of high tech cases in different fields, and is known to be one of the leading corporate lawyers in the San Francisco and Silicon Valley area. He is likewise acclaimed by his peers and press. The Chambers of USA quoted “Louis Lehot is known for the high quality of his advice, his responsiveness and passion for his clients.”

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Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis

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Louis Lehot

Louis Lehot

Louis Lehot is a partner and business lawyer with Foley & Lardner LLP, based in the firm’s Silicon Valley office. Follow on Twitter @lehotlouis

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