Below is every SaaS company that has IPO’d since October 2017, of which 47 are still public and performing. The data shows their Rule of 40 results in Q4 2025. The median and average was 18%. Of the 47 publicly traded SaaS companies, 30 of them (64%) are achieving Rule of 40 or better. Also of note, Rule of 40 was hovering around 11% over the prior 5 quarters, so the jump to 18% in Q4 is meaningful.
Our advice to founders is to continue to push hard for cash-efficient growth. That means generating ARR of at least $0.75 for every dollar of operating loss (which implies a 1.5 year payback). Don’t forsake growth just to get to profitability; the former is still far more valuable than the latter as long as you’re achieving it cash efficiently.
Thank you for the readership. Visit blossomstreetventures.com for more blogs and SaaS data. Email the author at sammy@blossomstreetventures.com or connect on LinkedIn.
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