SaaS is highly unprofitable. With median operating income and free cash flow of -$20mm and -$8mm, SaaS businesses can get away with unprofitability at the time of exit because their revenue is contracted and recurring. In fact, 53 out of the 65 companies listed were unprofitable and 44 didn’t generate positive free cash flow. Because investors love the recurring revenue model, so long as you’re growing cash efficiently, you can get away with unprofitability as a SaaS business.
The real burners. Marketplaces, ride share, tech enabled services, and ad based, light money on fire. Almost note were profitable at the time of IPO except Shutterstock and Lending Club.