NOAH’s CEO View
SaaS was with 30x revenues the group of public companies affected the most by the market drop – often as high at 90% from peak share price. Unprofitable SaaS companies are asked to break even with the cash resources already raised. It is time now to proof that the SaaS business models can generate cash. A great example is Similarweb, still loosing money.
When revenue growth is maturing at around 15% and the business carries a multiple of revenues in monthly cash burn, a business model pivot is needed or a stricter spending plan.
On the positive side, SaaS is digitizing the World with data and workflow. If a relevant market is large enough, leadership established and the financial profile looks attractive with strong unit economics, no market environment will stop a vertical or horizontal market leader generating $50 million or more in profitable growing subscription businesses. Patience and strategic thinking with underlying industry knowledge is the pre-requisite to find winners.