Introducing the benchmark calculator: A new tool to measure SaaS performance

The Capchase Team
The Capchase Team
Posted on
August 2, 2023
min read
Introducing the benchmark calculator: A new tool to measure SaaS performance

Building on the success of our recent Benchmark Report 2023, we’re excited to announce the launch of our new SaaS benchmark calculator. This interactive tool will show how your business compares to competitors in key performance metrics.

How to use the SaaS benchmark calculator

To use the benchmark calculator, simply enter a few of your most recent business metrics. You’ll receive a personalized report showing how your performance stacks up against industry standards in:

  • Annual recurring revenue growth year-over-year (ARR growth YoY %)
  • Rule of 40 (R40)
  • Net margin 
  • Net monthly recurring revenue retention (net MRR retention)
  • Runway 

Your results will show how your business stacks up against the performance of SaaS businesses in the top, median, and bottom quartile of performance.

How to use and interpret your results

You can use the insights you gain from this calculator to:

  1. Set realistic goals. Understanding how your performance stacks up to industry averages can help you identify performance gaps, areas for improvement, and areas your company excels in, which can help you set achievable goals.

  2. Increase your competitive advantage. Understanding where you excel or lag behind lets you differentiate your offerings and improve your value proposition to customers. Comparing performance against competitors helps businesses identify their unique selling points and competitive advantages.

  3. Raise capital more successfully. Investors and lenders evaluate your business based on your performance relative to industry standards. Understanding how you measure up against peers can give you more bargaining power, help you access more capital, or identify how to improve before raising capital.

  4. Identify potential risks. Use this tool to identify potential risks and vulnerabilities in your business operations and make informed decisions on how to mitigate potential pitfalls. 

Understanding B2B SaaS metrics

Here is a breakdown of how each of your results is calculated and what it means.

ARR growth YoY

Annual recurring revenue shows the amount of revenue your business generates from recurring subscriptions over the course of a year. 

ARR growth year-over-year is useful for helping you forecast future revenue potential. It can also help investors determine an accurate valuation for your business.  

Rule of 40 (R40)

R40 measures growth vs. burn for both VC-backed and bootstrapped SaaS businesses. VC-backed companies typically have high ARR growth but burn cash more aggressively, so they tend to have a negative net margin. On the other hand, bootstrapped businesses have a higher net margin but achieve moderate ARR growth. 

Because it balances growth against burn, R40 is a valuable metric to determine the health of a business at a glance. It’s generally believed that to be attractive to investors, you need to achieve at least 40% ARR Growth YoY + Net Margin—hence the “Rule of 40”. 

Net margin

Net margin is one of the most important metrics to track for overall business health. At the most basic level, it shows whether your business generates more revenue than you spend.

Unlike gross margin, net margin takes all of your business costs into account. 

Net MRR retention

Net monthly recurring revenue retention measures the proportion of earned revenue from repeat customers and predicts the potential for business expansion. When all active subscriptions for a given month are considered, MRR forecasts total revenue. 

Net MRR retention also shows you how well your business is doing at keeping your customers engaged and satisfied. 


Cash runway shows how long your company can stay in business based on your current cash reserves. 

If your business is venture-backed, it shows you when you’ll need to raise another round of external funding. 

Try out our SaaS benchmark calculator today

See how your business compares to competitors in ARR growth YoY, rule of 40, net MRR retention, net margin, and runway here.