SaaSCanvas Publishes 2025 “State-of-Startups” Benchmark Report, Revealing Slower Growth but Record Efficiency Gains
SAN FRANCISCO – December 1, 2025 SaaSCanvas, the industry-standard analytics platform for private software metrics, today released its fifth annual State-of-Startups Benchmark Report, the largest survey of private B2B SaaS companies ever conducted. Drawing on audited financials from 847 software vendors across North America, Europe and Australia, the 42-page report delivers a data-driven snapshot of how startups are navigating a capital-constrained, efficiency-first market.
According to the findings, median year-over-year annual recurring revenue (ARR) growth slowed to 28 % in 2025, down from 47 % in 2024, as investors shifted from “growth-at-all-costs” to “growth-with-profitability.” While the deceleration was broad-based, companies with less than $1 M ARR re-accelerated in the top quartile, posting 300 % growth—triple the 2023 figure and the highest rate recorded since SaaSCanvas began tracking the cohort in 2021.
“Capital is no longer a substitute for efficient execution,” said Laura Kim, Chief Executive Officer of SaaSCanvas. “Our 2025 dataset confirms that founders who tightened sales cycles, narrowed ICP focus, and rightsized headcount in 2024 are now extending runway and, in many cases, reaching cash-flow positivity without new financing.”
The study arrives as venture funding remains 54 % below 2021 peaks and median time between Series B and C rounds has stretched to 27.4 months, a 61 % increase since 2022.
Against that backdrop, SaaS leaders are reallocating spend: the median sales-and-marketing multiple fell to 3.2× revenue in 2025—half the prior-year ratio—indicating that every dollar of marketing investment now generates 50 % less ARR than twelve months ago.
Additional highlights from the State-of-Startups report include:
- Rule of 40: Only 11 % of respondents meet the golden “growth + profit ≥ 40 %” threshold, yet those companies command a 121 % valuation premium—12.4× ARR versus 5.6× for the remainder.
- Gross-margin pressure: Median subscription gross margin slipped to 79 %, down from 85 % in 2024, driven largely by surging AI compute and data-ingestion costs.
- Churn creep: Median revenue churn ticked up to 12.5 %, with education-tech SaaS experiencing a 71 % spike in dollar churn as school districts re-tender contracts amid budget freezes.
- Workforce productivity: Later-stage startups produced $400 k ARR per full-time employee, a 50 % jump that outpaced wage inflation and suggests successful automation deployments.
SaaSCanvas compiled the report from confidential financial templates submitted by portfolio companies of 190 venture, growth and debt funds. Participants represent $11.3 billion in combined ARR and 135 000 employees across eleven verticals. The full dataset is interactive and freely available to founders who complete the 2026 survey.
About SaaSCanvas
SaaSCanvas operates the world’s largest private SaaS metrics repository, aggregating real-time data on 5 400 software companies in 23 countries. Investors, executives and lenders use the platform to benchmark growth, churn, CAC payback and runway. Headquartered in San Francisco, SaaSCanvas is backed by Mayfield, Bessemer Venture Partners and National Bank of Canada.
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