What’s it like being a classic B2B SaaS investor when the public market virtually overnight thinks your portfolio is worth ~30% less? It’s really unnerving and frankly anxiety provoking. Any investor that tells you otherwise is all bravado. At Blossom Street though, we’re humble — especially since we’ve had our share of ugly portfolio outcomes to make us that way -, so we acknowledge what the market is telling us. After all, the market puts real dollars behind it’s opinions.
The next step after acknowledging what is happening, is to question it. Does it make sense that the entire software market has sold off indiscriminately? Is Kevin in IT going to vibe code an instance of Salesforce that is good enough to support his 5,000+ person company? And is he going to maintain it, update it, onboard and offboard personnel from it, keep integrations up to date while adding new ones, integrate feature requests, and even innovate the product? Is the college student attending The University of Texas at Austin going to code up a product that obliviates incumbent software? And are existing software companies going to stand still and do nothing, especially those in our portfolio not held back by bureaucracy or capital, even though AI agents also make their product and engineering teams an order of magnitude faster and more efficient? You can tell by the tone of our questions what we think.
After acknowledgment and questioning, the next step is to ground yourself based on what we’re really seeing. So what are we seeing? All of our portfolio companies are indeed reporting much higher velocity of product releases and innovation. One of them even said that for the first time ever, engineering is asking the product teams for more things to build because they’re so caught up. Our strong performing companies continue to post great financials and outlooks. None of our companies are letting go of engineers, since we like the ones we have and agentic coding has made them all that much more lethal. In summary, AI has made our portfolio companies flat out better and the customer still very much has a need for the solutions our companies provide. Stock prices aside, publicly traded SaaS companies are also doing well; it’s earnings season and of the ~40 or so that have reported so far, financial performance has been good and many are reporting real uptake of their latest AI offerings.
Now that we’ve acknowledged the market, questioned what’s happening, and grounded ourselves, we’re on the final step which is to act. At Blossom Street, we believe the software space is as attractive as ever. We are investing. And we believe this vintage of investments we make may be some of our strongest ever, especially if we’re fortunate enough to buy into great businesses at attractive pricing. We’re a fit for SaaS companies with $2M+ ARR and 30%+ year-over-year growth, particularly for last, fast, or smaller rounds. If you’d like to connect, just email sammy@blossomstreetventures.com; we always welcome cold inbounds.
In other news, we did release an MRR Calculator on our site that instantly calculates growth, retention, and customer trends. Try it and tell us what you think.