SaaS Company Benchmarks - Cash Runway

The Capchase Team
The Capchase Team
Posted on
August 31, 2022
min read
SaaS Company Benchmarks - Cash Runway

Understanding growth benchmarks is key for setting company goals. Companies that grow faster are typically able to better raise capital, hire, and get press. Below, we both define cash runway and explain how long of a runway you need to have to be considered in the top quartile of same-stage SaaS startups.

Cash Runway Defined

Before analyzing how your company’s cash runway compares to that of other similar-stage SaaS companies, it is important to understand how cash runway is calculated:

Cash runway shows how long a VC-backed business can stay in business for, given its current monthly expenditures. Monitoring cash runway is important to understand when to invest in opportunities needed to reach a higher valuation at your next round.

Comparing Cash Runway by Company Stage

When comparing your company’s cash runway to that of peer companies, there are a few trends to be aware of:

  • Companies with $5 - $10m in ARR often have the longest cash runway - that is because at this stage, many companies raise another funding round (either venture capital or debt) which increases runway
  • At around $10 - $15 in ARR, companies often have competing dynamics affecting their cash runway
  • Many companies increase their burn rate by hiring, developing new products and expanding geographically to accelerate growth
  • Also at this stage however, sales and marketing efficiency often falls as the company grows - new hires take time to get up to speed, while new products and geographies take time to start generating revenue
A comparison of cash runway from a private analysis of over 200 VC-backed SaaS companies with $1 - $15m in Annual Recurring Revenue.

About Our Data & SaaS Company Benchmark Report

Whether you’re planning to raise funding or preparing your worst-case scenario, it’s more important than ever to have a razor-sharp understanding of what good performance looks like and which metrics are the markers of a healthy SaaS business. You can view the entire benchmark report, including which companies we analyzed, here.

For this report, we analyzed 439 private SaaS companies with $1 - 15m Annual Recurring Revenue. The data reflects actual financial performance, sourced directly from companies’ own records. We believe it is the largest dataset of its kind that is based on financial actuals, rather than survey data. When specifically analyzing Cash Runway, however, our data is based on information from over 200 VC-backed SaaS companies with $1 - $15m in Annual Recurring Revenue.

We then compared the performance of these private companies against 43 SaaS businesses that went public in 2020 and 2021. Data on public SaaS performance was sourced from their S-1 filings.

Or, for more analyses of important SaaS benchmarks, see our findings on: