PeakSpan Capital and Ibbaka Unveil 2nd Annual Net Revenue Retention Survey Results
SAN MATEO, Calif., NEW YORK and VANCOUVER, BC, OCTOBER 30, 2024 /PRNewswire/ -- PeakSpan Capital, a leading growth equity firm with $1.5 billion in assets under management (“AUM”) investing exclusively in high-growth business-to-business (or “B2B”) software companies, and Ibbaka Performance Inc. (“Ibbaka”), a provider of pricing optimization and value management solutions, today announced the release of their 2nd Annual Net Revenue Retention (NDR) Survey Results.
This comprehensive report offers valuable insights for SaaS professionals seeking to improve customer retention and reduce churn in an increasingly competitive landscape. This year's findings underscore significant shifts in NRR performance across various SaaS verticals, driven by the integration of AI technologies, based on the responses from 503 SaaS companies.
Key Findings:
Emerging NRR Patterns: The survey identifies a growing cluster of companies exhibiting high churn yet achieving strong NRR through substantial expansion revenue. This trend is attributed to the disruptive nature of generative AI.
AI-Driven Growth: Companies leveraging AI-related pricing metrics reported an average NRR of 118%, significantly outperforming the overall average. The General AI vertical leads with an impressive NRR of 130.6%.
Organizational Design Impact: Dedicated teams focused on revenue expansion are outperforming other organizational models, achieving an average NRR of nearly 125%.
Sector Performance: General AI, Healthcare, and Energy sectors are leading in NRR performance, while Communication, MarTech, and CRM sectors are struggling amid post-COVID adjustments and AI-driven market shifts.
Vertical-Specific Insights:
AI and Machine Learning: Companies in this sector maintain their position as top performers, with 35% achieving NDR rates above 130%
Data Analytics and Management: Close behind AI, with strong growth potential and high retention rates
HR Tech and EdTech: While still facing challenges, these sectors show signs of improvement, with several companies implementing successful retention strategies
Sanket Merchant, Partner at PeakSpan Capital, noted: "We couldn’t be more thrilled to partner with the Ibbaka team on our 2nd Annual NRR Survey! The preceding year has been challenging for most scale-ups who sought to drive the best absolute view of efficient growth. Like most, we believe retention is one of THE most powerful measures of utility, and expanding customer relationships is a powerful lever to drive (efficient) growth and reinforce the ongoing value being delivered. We’re excited to see how these insights help software or SaaS businesses build a robust relative view of performance against their relevant peer set and identify best practices to maximize performance. The wealth of insights from this year’s survey will help scale-ups better understand what more can be done to drive best-in-class performance and sustainable growth acceleration, which will undoubtedly be a boon for our scale-up community and well beyond."
Karen Chiang, Co-founder and COO of Ibbaka, added, "We are thrilled to unveil the results of the 2nd Annual Net Revenue Retention Survey, which provides crucial insights for B2B SaaS companies navigating today's dynamic market. For any B2B SaaS company, understanding these trends is essential to driving sustainable growth and staying competitive. The findings highlight emerging patterns in net revenue retention and offer strategic recommendations that can empower companies to optimize their pricing models and enhance customer value. We believe this report will be an invaluable resource for SaaS professionals aiming to refine their retention strategies and achieve long-term success."
Strategic Recommendations:
Embrace Expansion Revenue: Companies should prioritize expansion revenue to counterbalance increased churn during this transitional period.
Adopt Hybrid Pricing Models: Transition to hybrid metrics or outcome-based pricing to optimize value capture from AI-driven solutions.
Leverage Generative AI for Growth: Explore new growth motions, such as AI-led growth, to complement existing strategies and maximize potential expansion revenue (PER).
Design for Flexibility: Offer diverse configurations and packaging options to enhance customer value and retention.
Monitor Industry Shifts: Stay informed about industry changes, particularly in packaging and pricing strategies influenced by major players like Salesforce and Adobe.
Accessing the Full Report
The complete 2nd Annual Net Dollar Retention Survey Results report is now available on the Ibbaka website. Access the report here. SaaS professionals are encouraged to leverage these insights to refine retention strategies and drive long-term success in their respective markets.
About PeakSpan Capital
Based in New York City and Silicon Valley, PeakSpan Capital is a $1.5 billion AUM growth equity firm with a singular mission to be the partner of choice for growth-stage entrepreneurial teams building amazing business software companies. PeakSpan combines deep domain expertise within a select number of themes with an active partnering approach to help entrepreneurs drive excellent risk-adjusted growth and value creation. PeakSpan Capital prides itself on a collaborative approach to working with entrepreneurs and other stakeholders.
To learn more about PeakSpan Capital and its portfolio, please visit www.peakspancapital.com.
About Ibbaka
Ibbaka empowers SaaS businesses to optimize their packaging and pricing strategies through its cutting-edge Valio platform and expert consulting services. By leveraging AI and data-driven insights, Ibbaka helps companies create sustainable, adaptive pricing models that maximize value delivery to customers.
Media Contacts For PeakSpan Capital
Sanket Merchant, Partner
+1 650 337 6003
https://www.peakspancapital.com/
Media Contacts For Ibbaka
Liam Hannaford, Marketing
+1 778 898 1483
https://www.ibbaka.com/
