Each quarter we look at the R&D spend as a percent revenue of every SaaS company that has IPO’d since October 2017; we prefer to look at these ‘newer’ SaaS companies as opposed to the OG’s like Salesforce as we believe they’re more representative of private SaaS companies. The data is below and can also be found on our site at blossomstreetventures.com.
Two observations stand out:
R&D as a percent of revenue has held steady at 24%. The steadiness over the past 4 and even 8 quarters is remarkable, especially with the proliferation of coding tools and the fact that revenue has grown nicely for these SaaS companies (21% YOY as of Q2 2026 and 15% YOY as of Q2 2025). Companies are growing faster but holding R&D costs in check.
Back in 2022, coming off covid, the figure was consistently 29%. That is much higher than today’s 24%, and deservedly so as SaaS really could do no wrong during covid and even slightly after it. It took until 2023 to see R&D spend as a percent of revenue really come in.
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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