Series D is the final round. The $133mm was raised across 4 rounds on median, through the Series D. The most number of rounds required went all the way to Series H (8 rounds) and some companies got to IPO with only a Series A (1 round; note however SurveyMonkey took on a lot of debt).
It can be done without much cash. Some companies raised very little equity. Impressively, Veeva Systems which filed their S1 in 2013 raised only $9mm of equity. Obviously the less equity you can raise, the better. Cash efficiency to minimize dilution is critical.
Debt is uncommon. SaaS companies have very little debt prior to going public. The median amount of debt was only $2mm. In our view this is more a function of VC wanting to invest more capital in strong performers versus banks unwilling to lend. Lenders are open to investing in SaaS businesses, but if a VC sees an opportunity to put more money to work and earn a return, they’ll do so. SurveyMonkey and DynaTrace stand out as a SaaS business that used a lot of debt and leases to finance growth ($412mm and $1bln).
Revenue was growing 55%+. On median, revenue at the time of exit was $105mm and growing 55% YOY. In the prior year, it was growing 52% on median.
Everything is getting bigger. There are 19 companies that have filed their S1 in 2018 or 2019. Those companies are far larger than the median figures above. The subset of these companies had median revenue of $180mm, took 11 years to exit, and raised $272mm of equity on median. They also didn’t exit until their Series E on median.
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