In today’s digital age, even if you’ve never heard of the term “SaaS,” there’s a good chance you’ve interacted with an SaaS company. Think of your favorite apps and online services; many run on the “Software as a Service” (SaaS) model. At its core, SaaS is all about delivering software over the Internet rather than through physical installations.
The numbers behind this industry speak volumes about its growth, potential, and the evolving ways we use technology. Here, we’ve gathered more than 50 intriguing and unique statistics and trends about the SaaS industry and SaaS startups to give you a clearer view. Let’s get into it!
General SaaS Stats
1. The SaaS Market Will Be Valued at $273.55 Billion by the End of 2023
The worldwide SaaS industry, which stood at around USD 237.48 billion in 2022, is expected to reach approximately USD 273.55 billion by the end of 2023. Moreover, projections suggest it could even soar to nearly USD 908.21 billion by 2030!
This growth indicates an annual rate of about 18.7% over the forecasted years.
2. There Are More than 30,000 SaaS Companies Worldwide
There’s an estimated total of over 30,800 SaaS businesses around the world, as highlighted by a Statista study. A significant number of these companies are based in the United States.
Among the major US-based SaaS players are names like HubSpot, Google Workplace, Slack, Zoom, GitHub, and Figma.
3. The Majority of SaaS Firms Operate in the Customer Service Solutions Domain
The largest chunk of SaaS businesses, around 17,000 of them, focus on Customer Service Solutions, with Salesforce being a prime example. Marketing Software is next, with about 15,000 firms. This is followed by 14,000 in eCommerce, 12,000 specializing in Data and Analytics, and 11,000 centered on Sales.
4. The Most Significant Number of SaaS Businesses Were Established in 2015 and 2017
In 2022, 344 SaaS businesses emerged, with 334 focusing on profit-making and the others being non-profit. 2015 and 2017 witnessed the highest surge in the creation of new SaaS companies, numbering 1,469 and 1,460, respectively.
The momentum of launching new SaaS firms slowed down in the years 2018, 2019, and 2020.
5. Adobe is the 5th Largest SaaS Company
As of August 2023, Adobe boasted a roughly $246.8 billion valuation. Not far behind, Salesforce was valued at about $208.03 billion, while Intuit took the third spot with a market value close to $152.07 billion.
6. SaaS Is Vital for Business Success in the Modern Age
A recent poll highlighted that out of ten tech options, SaaS topped the list as the prime enabler for reaching business objectives. Of the 1,724 participants, 73% viewed SaaS as somewhat important. 38% labeled it “crucial,” while another 35% rated it as “quite important” for their business growth.
7. Leading Sectors in the SaaS Arena: IT, Analytics, and Finance
SaaS has made a significant impact across various industries, but it’s predominantly seen in the fields of information technology, data analytics, and financial services. Beyond these, sectors like communication, project management, and security are also tapping into SaaS. Among these, the IT sector stands out with a whopping 37 billion users globally, thanks to giants like Google, Microsoft, and Salesforce.
SaaS Location Stats
8. The United States Is Home to Most SaaS Companies in the World
With a staggering count of nearly 17,000 SaaS firms, the United States leads the pack. These companies collectively cater to an impressive 59 million users worldwide. The UK and Canada come next, each with around 2,000 SaaS firms. Close behind, Germany and France each boast about 1,000 of these businesses.
9. India Has More SaaS Companies Than Any Other Country in Asia
India stands out in Asia with the highest number of SaaS firms, totaling 994, while China closely follows with 702 businesses in the same sector.
10. Germany’s SaaS Industry Is Growing the Fastest in Europe
Europe has seen steady growth in its SaaS sector since 2020. However, Germany stands out, with its market size rising from $7.56 billion in 2020 to an anticipated $18 billion by 2025. This number is projected to climb to nearly $18.83 billion in 2027.
11. U.S. Firms Lead in SaaS Expenditure
On average, businesses in the U.S. allocate about $20,000 annually for SaaS services. In contrast, UK companies typically spend roughly $17,500. A study revealed that French companies have an average outlay of about $15,400.
Meanwhile, Asian nations, especially China, spend the least, with businesses averaging around $7,500 yearly on SaaS services.
12. Most SaaS Unicorn Companies Are Based in the US
The US leads the world with the highest number of unicorn SaaS companies. Currently, the US boasts 300 such companies, while China has 28.
Recent data suggests that more than 100 SaaS companies are valued at over a billion dollars each. As more companies use these software services, this number is set to rise.
13. The SaaS Industry Is Growing Fastest in Latin America and Africa
Latin America tops the chart with the world’s quickest expansion in the SaaS and cloud sector, with an annual growth rate of 28%.
Following closely, Africa’s software and cloud services sector is growing at a rate of 25% annually, making it the second-fastest after Latin America.
14. SaaS Requirements in China: Local Server Mandate
China’s SaaS market has been on an upward trajectory, with an impressive gain of CNY53.8 billion in 2020, and this growth trend shows no signs of slowing down. However, there’s a crucial regulation for SaaS providers in China: they must host their servers locally. If not, offering a SaaS service becomes unlawful in the country.
SaaS Funding Stats
15. B2B Companies Get the Most Funding in the SaaS Industry
Venture capital increasingly favors SaaS, with nearly half its global funds directed towards these firms. Interestingly, 90% of the funds allocated to SaaS are invested in business-to-business companies.
16. Average SaaS Startup in Europe Raised €2.2 Million in 2022 in Funding
In 2020, average SaaS startups in Europe secured funding of €1 million during their initial stages. By 2021, this amount had increased to €2.2 million.
17. European SaaS Investment Tripled in 2021
In 2020, Europe’s SaaS industry secured investments between $9 and $9.5 billion. However, this amount surged to about $30 billion the following year. Notably, private SaaS startups in Europe received three times more funding ($11 billion) than those going public.
18. Funding for SaaS Businesses in India Jumped Significantly by 170%
In 2021, these Indian SaaS firms attracted an impressive $4.5 billion in funding, marking a substantial rise from the previous year.
19. Sequoia Capital Leads SaaS Investments with Stakes in over 1,200 Firms
Established in 1972 by Dona Valentine, Sequoia Capital is a major player in the SaaS funding landscape. They’ve poured resources into a whopping 1,222 businesses.
20. Funding for SaaS Companies Hit a Record $90 Billion in 2021
SaaS firms secured a whopping $90 billion in funding. This amount surpassed the total funds raised across 2018, 2019, and 2020, setting an unprecedented benchmark.
21. Record $34 Billion Funding Boost for Early Stages SaaS Companies
In 2022, emerging SaaS firms attracted an unparalleled $34 billion from venture capitalists. This was the most substantial surge in funding ever recorded in the SaaS industry.
22. 2023 Sees Robust Funding for SaaS Enterprises
Capital inflows into SaaS businesses remain strong this year. Fresh data reveals that from January to May 2023, about 119 SaaS firms successfully secured funding through various investment rounds.
23. AI Will Bring Disruptive Change to the SaaS Industry
As with many different industries, SaaS will be affected by AI. Artificial intelligence is a pivotal tech innovation with the potential to transform the SaaS industry. One standout advantage it offers is in-depth customization, ensuring that needs across B2B, B2C, or D2C markets are met seamlessly.
24. Machine Learning Is the Next Big Thing After AI in the SaaS World
Machine learning is another innovation made possible through AI, which is changing how platforms operate and serve their users. By understanding and adapting to the habits and preferences of customers, SaaS companies are making their offerings more user-friendly.
Additionally, the ability to sift through vast amounts of relevant data gives companies a unique edge to fine-tune their market presence.
25. Integrations Are Becoming More Frequent than Ever
In the SaaS world, integration options were sparse. But today, many SaaS providers offer enhanced integration features, appealing to businesses wanting a mix of cloud and on-site systems. Such integrations reduce human errors by automating certain tasks. Platforms like Zapier exemplify this streamlined automation.
26. Low-Code Apps Will Bring Desired Results
Low-code and no-code development tools have gained traction recently, and the SaaS world has taken note. Since these platforms cater to a broader audience, including those without a tech background, they pave the way for a broader range of startups and users.
SaaS Companies Stats
27. SaaS Companies Spend 50% of Their Revenue on Marketing and Sales
For SaaS businesses, the bulk of their costs go into sales and marketing. They typically use up to half, sometimes even more, of their income on these efforts. This trend is primarily due to the nature of their business model, where returns come after hefty initial investments.
28. Microsoft Is the Largest SaaS Company in the World
In 2021, Microsoft held a commanding position in the SaaS industry, claiming close to 17% of the market. Salesforce and IBM trailed as the subsequent major contenders in this domain.
29. The Top 15 SaaS Firms Reached $1.4 Trillion in Market Value in 2020
In 2020, the collective market value of the 15 front-runners in the SaaS arena touched a staggering $1.4 trillion, with earnings hitting $80 billion. This elite group includes giants like Microsoft, Salesforce, SAP, Oracle, Google, and WordStream, among others.
30. 90% of SaaS Startup Companies Fail
Data indicates a challenging landscape for budding SaaS companies. Research reveals that a whopping 90% of these startups don’t reach their anticipated success markers or produce significant income.
31. Average SaaS Firm Serves 36k Clients
SaaS enterprises vary widely, with clientele ranging from mere hundreds to several hundreds of thousands. Yet, on average, a standard SaaS business caters to 36,000 clients. This figure jumps to 85,000 when looking at publicly traded SaaS entities primarily serving small to medium-sized businesses.
32. Zoom’s Revenue Skyrocketed Amid the Pandemic in 2019-2020
During a time when numerous businesses faced dwindling revenues due to COVID-19, Zoom’s earnings soared. They witnessed a growth of 148%, jumping from $90 million in the first quarter of 2019 to $225 million in the same period of 2020.
Furthermore, by their 2022 fiscal year, Zoom had an impressive turnover of $4.1 billion.
SaaS Usage And Adoption Stats
33. By 2025, 85% of All Business Apps Will Be SaaS-based
The 2023 State of SaaSOps survey anticipates that by 2025, a dominant 85% of all enterprise applications will belong to SaaS.
34. App Usage Surges Based on Company Size
Businesses with a workforce under 500 typically utilize roughly 253 applications. Meanwhile, those housing up to 1,000 staff members operate with around 335 apps. Impressively, large-scale corporations with more than 10,000 employees have, on average, 473 applications.
35. Software Deployment Now Takes 7 Hours
Setting up SaaS tools has become incredibly efficient. While a new software setup once demanded 57 hours around ten years back, today, it can be done in merely 7 hours. This swift implementation aids in quicker market entry and enhanced value realization.
36. Healthcare’s SaaS Usage Surges by 20% Annually
The medical sector is showing keen interest in integrating SaaS solutions, witnessing a steady annual growth of 20% in its adoption rate.
37. Almost 9 in 10 Companies Use a Cloud Solution
Close to 90% of businesses have adopted at least one cloud-based service. Moreover, many of these companies anticipate adding more SaaS services in the upcoming year.
SaaS Challenges Stats
38. About a Third of Companies Fix SaaS Security Issues in a Day
Roughly 28% of businesses reported resolving a SaaS security flaw within a day. On the other hand, a small 1% mentioned they need over six months to address such issues, though such prolonged challenges are infrequent.
39. Nearly Half Struggle with SaaS App Overload
A recent poll targeted IT leaders from companies with over 500 employees, asking about their main hurdles in overseeing SaaS applications. The findings revealed that 49% saw the proliferation of too many apps as their primary concern.
Meanwhile, 26% were troubled by identifying unregulated applications. 14% cited concerns over unchecked expenditures, and 11% stressed the need for better guidelines and management strategies.
40. Former Employees Cause 1 in 5 SaaS Security Issues
Internal security threats within SaaS-using organizations can be surprisingly high. In fact, ex-employees who still have access to company SaaS tools contribute to roughly 22% of all security breaches.
This underscores the necessity of promptly deactivating accounts of those no longer with the company to prevent potential risks and save time and costs.
41. Too Much Departmental Access Causes 35% of SaaS Errors
One major culprit behind SaaS misconfigurations that can compromise security is excessive access by various departments. Additionally, not being aware of alterations in security settings ranks as the second leading cause of such errors.
SaaS Workforce Stats
42. More Than 70% of SaaS Companies Have Fewer Than 50 Employees
A mere 6% of SaaS companies are giants in this industry. And approximately 20% employ between 50 to 1,000 people, positioning them in the mid-market category. Meanwhile, the bulk of them, at 74%, are small businesses with a workforce of fewer than 50.
43. Salesforce Has More Than 79,000 Employees
In 2023, Salesforce, a major player in the SaaS industry, boasts a workforce of 79,390. This marks an almost 8% growth from the year before.
44. SaaS Professional Services Revenue per Employee Was $145,000 in 2022
In 2022, each employee in the professional services sector of SaaS companies generated an average revenue of about $145,000. Interestingly, the revenue per employee in 2015 was $170,000. So, SaaS professional services revenue was $16,000 less in 2022 than in 2015.
45. Peak Revenue for SaaS Professional Services in 2019
In 2019, every worker within the SaaS professional services domain brought in an average of around $199,000. This marked the pinnacle in revenue generation in the years since the SaaS sector became prominent.
46. The Average SaaS CEO Salary in the USA Is Around $322,000 in Base Wages
CEOs of SaaS companies earn money from many different revenue streams, including salary, dividends, and bonuses. When just looking at the salaries of SaaS CEOs, the average is around $322,000. That said, many earn more than double this, and some earn much less as well.
47. CTOs of SaaS Companies Earn Up to 1M Pesos in Mexico
In Mexico, the annual salary of a Chief Technology Officer (CTO) can be up to one million pesos. Meanwhile, senior software engineers typically earn about 900 thousand pesos, and those just starting as junior software engineers make close to 144 thousand pesos.
SaaS Pricing Stats
48. 44% of Firms Lean on Sales-Negotiated Pricing
In the B2B SaaS world, 44% of firms lean on sales-negotiated pricing as their go-to strategy. This is followed by set pricing at 34% and fluctuating pricing, which stands at 24%. However, a significant 64% anticipate adopting different pricing structures in the future, with a tilt towards variable pricing methods.
49. 42% of SaaS Firms Offer Both Monthly and Annual Plans
Over 40% of SaaS businesses provide both monthly and annual subscription choices. Meanwhile, 26% lean towards just monthly subscriptions, and 18% focus on annual ones.
In the transparency department, 82% of these companies openly display their pricing. Additionally, 40% offer yearly discounts, and 48% feature a free subscription tier. When detailing their offerings, 42% mention added benefits, 36% underscore their top-selling plan, and a minimal 4% present a tool that suggests the optimal subscription plan.
50. 65% of Firms Leverage Customer Success for Upselling
A majority of SaaS businesses, about 65%, rely on their customer success teams as their primary method for upselling. Other favored strategies include offering demos, trials, and open testing, as well as straightforward communication with potential buyers.
51. Typical SaaS Firm Dedicates 6 Hours to Price Structuring
On average, a SaaS business allocates merely 6 hours to formulate its pricing strategy. The prevailing trend indicates that they typically provide an average of 3.5 unique packages.