Friday Odds, Ends, And Startup Notes

It’s time for an irregular grab bag of news and notes that didn’t wind up in a post this week.

It’s been a busy week here on the News desk, including some news from Crunchbase itself that I’m sure you’ve seen by now. While we tidy up the weekend email draft, prep the final podcast episode of our first-ever mini-series, and compile startup financings into Last Week in Venture, I have a few more things to put on the site before we all break for a nap.

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And so for what I believe is on the second time ever, it’s time for a grab bag!

Progyny!

Last week I got on the phone with Pete Anevski, President, CFO and COO of Progyny, a company that went public that very day.

Progyny, as a reminder, is a venture-backed company that raised a known $99.5 million before going public. It priced its IPO at $13 per share. Today it’s up past $16. That’s a pretty good IPO cycle.

The company is fascinating in that it helps employers provide fertility services to employees. It works with employers (who pay), employees (who use), and medical professionals (who use) to deliver its service.

Chatting with Anevski, I asked about the changing face of society and how that may, or may not be impacting the company’s growth trajectory (read its S-1 here). He agreed that societal changes that make it more feasible to discuss fertility are changing the game. His company is right in the sweet spot of riding that trend.

And as people have children later in life over time, Progyny’s usefulness will probably only rise. It’s a company to watch, and a win for Kleiner Perkins, TPG Biotech, Mellon Ventures, and others.

The State Of SaaS!

I wanted to do a pretty deep dive into the KeyBanc 2019 SaaS report but only wound up mentioning it in this post. You can read the whole thing for yourself here (do, if you are in the SaaS world in any capacity), but let’s snag a few notes for the busy among us:

• SaaS companies as a cohort grow more slowly than you’d expect, even at modest ARR levels. This means that the percentage of SaaS startups that are venture capital-friendly is smaller than I expected. (Amongst survey respondees with over $5 million ARR, a 36.3 percent growth rate was the median.)
• In 2018, companies in the survey had blended CAC of $1.14 for a marginal dollar of ARR and burned $1.47 in capital for the same new $1 in annual recurring revenue. You can dig deeper into the figures, but having those top-line metrics are useful rubrics for your cranium.
• ACV has very little impact on a SaaS company’s growth rate, looking at all participants across all ACVs.
• SaaS companies of all sizes derive an average of just under 37 percent of new ARR from upsells and expansions; I can’t decide if that feels high or low, but, again, having a broad metric is useful.
• Expansion ARR is the cheapest to generate. Upsells are a close second. You knew that, but it’s nice to see it in chart format. Thanks, page 26.
• A working median for SaaS only ARR is 78 percent. That feels precisely correct and goes to show why companies in the 80s can generate such high revenue multiples. They’re exceptional.
• Nearly exactly one-fifth (20 percent) of companies surveyed met the Rule of 40 benchmark. Put another way, 80 percent of SaaS companies failed the Rule of 40.

There’s a lot more. Go read it if you want to get a better view of SaaS as it stands this year.

The State Of The Market!

The folks over at Silicon Valley Bank put out their Q4 2019 State of the Markets report, bringing its regular dose of data to our lives. As with most SVB reports, it’s worth reading. I want to highlight two small bits from it while we’re here, as I was slightly gripped by the pair.

First, observe this chart:

And then this one:

I’m sure you can see the risks. Sleep as well as you can.

A Crypto Boomlet!

Here at Crunchbase News we’ve only covered crypto only a bit lately. We did a pulse check of the industry and touched on Coinbase’s regular profitability (well done), and peeked at its venture scene.

But that’s been it, mostly because the wild price gyrations that make bitcoin and friends fun to watch have dried up to some degree. Until the other day, that is, when the entire crypto market rallied, creating tens of billions of value seemingly instantly.

It was a positive rejoinder to market prices for cryptocurrencies that had fallen in lockstep before. What to take away from the recent boost to crypto values? That while the rest of the world is busy watching the Astros lose at home (four times!), the crypto believers are still busy out there building the future that they see as best. And sometimes the price of their underlying assets wakes up to remind us of that fact.

Next Up:

Esports! Vindex is a new company from a passel of MLG alums (Sundance DiGiovanni, Mike Sepso) who are building out what appears to backend tech and services for the world of competitive gaming. With $60 million in the bank, we’re writing about them. I’ve touched-base with DiGiovanni, so prep up for words from us concerning esports on Monday.

Alright! That’s enough from me this week. Get some rest!

Illustration: Li-Anne Dias.