We track R&D spend trends of every SaaS company that has IPO’d since October 2017 (MongoDB). There have been 75 SaaS IPO’s since that time, of which 57 still trade. R&D spend trends and observations are below.
Growing R&D spend. The median SaaS company in the data set spent $182mm on R&D in 2025, up from $148mm in 2023. This makes sense as SaaS has grown over time (revenue on median was $473mm in 2022 versus $857mm in 2025).
Profitability results in lower R&D investment. Unprofitable SaaS companies spend more on R&D than profitable ones. The median spend of the profitable SaaS co’s was $163mm in 2025 versus $226mm for the unprofitable ones. That’s a material difference and of note, unprofitable SaaS co’s had median YOYG of 22% in 2025 versus only 13% for the profitable SaaS co’s. Fast growing SaaS co’s spend more on R&D and are more likely to be unprofitable (which is more than ok for high quality SaaS).
Percent of revenue is steady. On median, SaaS co’s spent 24% of revenue on R&D in 2025; remarkably this figure has been very stable since 2022. Profitable SaaS spent only 18% of revenue on R&D and unprofitable SaaS spent 27% of revenue on R&D on median. Again, all figures held very steady since 2022, which is remarkable.
All this data can be found on our website at blossomstreetventures.com
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.
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