2024 Vertical & SMB SaaS Benchmark Report
2024 Vertical & SMB SaaS Benchmarking Survey.pdf
Key takeaway
- For entrepreneurs: Multi-product strategies significantly boost ARPA, revenue growth, and retention for Vertical SaaS companies.
- For investors: Vertical SaaS companies with fintech and back office control points exhibit the highest gross revenue retention, presenting attractive investment opportunities.
Summary
The Tidemark Vertical & SMB SaaS Benchmark Report provides a comprehensive analysis of the Vertical SaaS landscape, offering insights into control points, multi-product strategies, and expansion opportunities. The report, based on a survey of 246 Vertical SaaS vendors across various industries, highlights the importance of occupying critical control points, sequencing multi-product offerings, and extending through the value chain. It also delves into the impact of fintech products and AI integration on Vertical SaaS businesses.
Insights
- Commerce (37%) and Back Office (20%) are the most common initial control point categories.
- Multi-product companies demonstrate higher ARPA ($255,146) compared to single-product companies ($90,863).
- Payments is the most common fintech expansion product, with a 30% adoption rate among respondents.
- 31% of respondents have an AI product in market, with 39% planning to launch one in the next year.
- Extending through the value chain to suppliers, employees, and consumers represents the frontier of Vertical SaaS.
- CRM products drive a median of almost $6K in incremental ARPA for companies in the respondent set.
- Fintech primary products report significantly higher ARPA ($47,500) compared to other categories.
Implications
- Vertical SaaS companies should focus on identifying and occupying critical control points in their respective industries.
- Developing a multi-product strategy is crucial for long-term growth and increased customer retention.
- Integrating fintech products, especially payments, can significantly boost platform stickiness and overall revenue.
- AI integration presents a significant opportunity for Vertical SaaS companies to differentiate and add value.