Pardot’s Growth

David Cummings posted some numbers about revenue growth and financial models in his blog.  I took a moment to boil it down to growth projections to compare to Windsor Circle’s SaaS growth model.  

The first post, Key Moments in the Life of Pardot, gave some milestones for Annualized Recurring Revenue (ARR) at $1M, $5M, and $10M, and the approximate dates.  I used these plot growth rates and map out growth.

The second post, Financial Projections for Startups Hurt More Than They Help, lists revenue for the first 4 years.

The data and graph below attempt to show these helpful metrics (thanks David for being so open).

Image

 

This is important for entrepreneurs, because you must think big (I’ve literally been asked by VCs several times “how will Windsor Circle be a $100M company in 5 years?”), but you must also bear in mind that the very best SaaS companies (ExactTarget, HubSpot, Pardot) achieved $10M by year 5 (and with the exception of Pardot, took millions in venture funding to achieve it).

Key take aways:

  • Significant growth, in part by pivoting to Marketing Automation
  • Took 2-3 years to get to $1M ARR
  • Year 5 did not exceed $10M
  • $95M exit to ExactTarget on ~$11M in 2012 revenues (8.6X revenue multiple)

Thoughts?  Do you have add’l data points re: SaaS growth models and benchmarks?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s