What Is a Good SaaS Growth Rate, by Stage and ARR

A good growth rate for a private SaaS company is about 22% to 26% a year at the median on recent surveys, and top-quartile companies grow 50% or more. The bar falls with size: High Alpha's 2025 report put the median at 100% for companies under $1M in annual recurring revenue (ARR) and at 16% for companies above $50M. Compare yourself against your own band.

What is a good growth rate for a SaaS startup?

A good growth rate for a private SaaS company sits somewhere between 22% and 30% a year at the median. Top-quartile companies grow 50% or more. The exact figure depends on whose survey you read, which year it covers and who answered it.

In SaaS Capital's 2025 data, equity-backed companies had a median growth rate of 25%, compared with 20% for bootstrapped companies and 22% across all respondents.

Median annual growth rate of private B2B SaaS companies by funding, 2025Per cent

Median annual growth rate of private B2B SaaS companies by funding, 2025

Item	Value, %
All companies	22%
Bootstrapped	20%
Equity-backed	25%

Three benchmark sets cover the range.

SaaS Capital surveyed more than 1,000 private business-to-business (B2B) SaaS companies. It put the median growth rate for 2025 at 22%, down from 25% in 2024. Funding changed the picture. Bootstrapped companies reported a median of 20%, and equity-backed companies reported 25%. Only 7.3% of respondents reported flat or negative growth in 2025.

Benchmarkit put the 2024 median at 26%. Its top growth quartile fell from 60% in 2023 to 50% in 2024.

ChartMogul drew on 2,100+ SaaS businesses, with all data sourced in 2023. It found the median grows around 30% a year and the top quartile around 60-70%.

Publisher	Data year	Sample	Median annual growth	Top-quartile annual growth
SaaS Capital	2025	More than 1,000 private B2B SaaS companies	22%	Not given
Benchmarkit	2024	Not given	26%	50%
ChartMogul	2023	2,100+ SaaS businesses	Around 30%	Around 60-70%

In our reading, the spread comes mostly from timing. The ChartMogul data is older, and both newer surveys show growth slowing. If you want a current yardstick, use the 22% to 26% band. Treat 30% as the median from an earlier, faster period.

Turn the annual figure into a monthly target

Annual benchmarks are hard to manage week to week, so convert them. ChartMogul puts the median at around 2-2.5% a month. It also notes that a company that wants to double revenue in a year needs to grow 5.95% each month.

To find your own monthly rate, take the twelfth root of (1 + annual rate) and subtract 1. Then compare your trailing three months against that number. Do not wait for the year-end total.

Growth rate is an output. To find the inputs that move it, start with retention and your monthly churn benchmarks.

SaaS growth rate benchmarks by ARR band, with source, sample and definition

Two datasets carry most of the band-level detail. High Alpha's 2025 report surveyed 800+ companies and reports a median plus a quartile range for each ARR (annual recurring revenue) band. ChartMogul's growth report draws on over 2,200 SaaS businesses and publishes top-decile rates for narrower bands. The table keeps them apart, one figure per row, because the bands do not line up.

High Alpha's median year-over-year growth rate falls from 100% in the band under $1M ARR to 16% above $50M ARR.

Median year-over-year growth rate by ARR bandPer cent

Median year-over-year growth rate by ARR band

Item	Value, %
Less than $1M	100%
$1-5M	50%
$5-20M	31%
$20-50M	30%
Greater than $50M	16%

Publisher	Survey year	Sample	ARR band	Statistic	Annual growth	What it measures (source wording)
High Alpha	2025	800+ (23% in band)	Less than $1M	Median	100%	Year-over-year growth rate
High Alpha	2025	800+ (23% in band)	Less than $1M	Upper quartile	300%	Year-over-year growth rate
High Alpha	2025	800+ (27% in band)	$1-5M	Median	50%	Year-over-year growth rate
High Alpha	2025	800+ (27% in band)	$1-5M	Upper quartile	100%	Year-over-year growth rate
High Alpha	2025	800+ (31% in band)	$5-20M	Median	31%	Year-over-year growth rate
High Alpha	2025	800+ (31% in band)	$5-20M	Upper quartile	72%	Year-over-year growth rate
High Alpha	2025	800+ (10% in band)	$20-50M	Median	30%	Year-over-year growth rate
High Alpha	2025	800+ (10% in band)	$20-50M	Upper quartile	41%	Year-over-year growth rate
High Alpha	2025	800+ (9% in band)	Greater than $50M	Median	16%	Year-over-year growth rate
High Alpha	2025	800+ (9% in band)	Greater than $50M	Upper quartile	29%	Year-over-year growth rate
ChartMogul	2023	2,200+	$1-3M	Top decile	192%	Annual growth
ChartMogul	2023	2,200+	$3-8M	Top decile	121%	Annual growth
ChartMogul	2023	2,200+	$8-15M	Top decile	110%	Annual growth

High Alpha's band table gives each range as lower quartile to upper quartile, so the upper figure in each bracket is the top-quartile rate shown above. The band shares come from High Alpha's respondent breakdown. The two smallest groups sit above $20M, which in our reading makes those rows the least stable.

ChartMogul flags that its data has survivorship bias: only 13% of SaaS startups reach $10M ARR even after 10 years. We read its top-decile rows as the pace of the companies that made it, not a target for everyone.

How to place yourself

1. Pick the band your current ARR falls in, for each source separately.
2. Compare against the median first, then the upper quartile.
3. Write down which source and which statistic you used, so the next board update compares like with like.

Worked example: a company at $3M ARR growing 40% a year. In High Alpha's $1-5M band it sits below the 50% median and above the 24% lower quartile. In ChartMogul's $1-3M band, the top decile grows 192%, so it is well short of that pace. Our reading: solid, not yet top quartile. The gap to close is 10 points of annual growth to reach the median.

If the gap traces back to customers leaving, start with monthly churn benchmarks and how to read retention curves.

Growth rates fall as ARR rises

Every data set in the earlier sections bends the same way. The top-decile figures shown above dropped band by band as annual recurring revenue (ARR) rose, and ChartMogul puts the pattern in one line: "Growth is faster in the early stages. As companies mature, the growth rate slows down."

The monthly numbers show the same bend. ChartMogul's top decile grows "over 10-17% per month when starting out" and settles around 6-7% a month once it crosses $3M ARR. The top quartile starts at around 5-7% a month and settles around 3-5% as it matures.

The late-stage reference

Bessemer Venture Partners' Scaling to $100 Million report carries the curve past where ChartMogul's bands stop. Across its cloud portfolio, the average growth rate for companies at $1M to $10M ARR "was nearly 200%," falling to 60% for companies over $50M. The spread also narrows with scale. The middle 50% of companies at $1M to $10M grew 100-230%, while the middle 50% at $50M and above grew 35-80%.

Bessemer's explanation is arithmetic, not effort: it is easier to grow at a higher rate on a smaller revenue base, and each extra dollar is harder to win.

Why 40% is a different number at $500K and at $20M

The same rate produces very different dollar gains. Here is the worked example.

Starting ARR	Growth rate	ARR added in a year	Ending ARR
$500K	40%	$200K	$700K
$20M	40%	$8M	$28M

At $500K, 40% means adding $200K, a handful of new customers for many products. That is far below the early-stage bands above, so we read it as a sign the company is still searching for fit. At $20M, adding $8M in a year requires a working sales and retention engine. It sits inside Bessemer's 35-80% range for the $50M-plus group, which in our reading makes it a defensible rate for a company at that size.

Plan next year with growth endurance

Bessemer also measures how much growth carries over from one year to the next. For private cloud companies, it says you should expect next year's growth to be about 70% of the current year's.

Run it on your own plan this week. If you grow 80% this year, the heuristic points to about 56% next year (80 × 0.7) and about 39% the year after (56 × 0.7). If your board deck shows growth holding flat as ARR rises, write down which specific change, such as a new segment or expansion revenue, breaks the pattern. Then test it with a growth experiment before the number goes into the forecast.

Why retention moves your growth benchmark more than contract size

Two segments decide which benchmark row you should read against: how you are funded, and how much revenue your existing customers add each year. Contract size, the segment most founders reach for first, does less work than it seems to.

Start with funding. In SaaS Capital's survey of more than 1,000 private business-to-business (B2B) SaaS companies, bootstrapped companies report median growth of 20%, down slightly from 23% in 2024. Equity-backed companies sat a few points higher, as covered above. If you have not raised, the bootstrapped figure is your comparison.

Retention moves growth more. SaaS Capital found that increasing NRR from the 90% to 100% range to the 100% to 110% range improves growth rate by 5 percentage points, where NRR is net revenue retention. Companies with the highest NRR report median growth that is 173% higher than the population median. Average annual contract value (ACV) showed no overall correlation with growth rate in the same survey.

Benchmarkit's numbers point the same way. It put Net Revenue Retention at 101%, and found Expansion ARR represents 40% of Total New ARR, rising to over 50% of Total New ARR in companies greater than $50M in annual recurring revenue (ARR). Contract size does appear one step removed: Benchmarkit found that as ACV increases so does GRR, gross revenue retention. In our reading, larger contracts help growth through retention, not on their own.

The wider market moved in 2025. KeyBanc Capital Markets and Sapphire Ventures released their 16th annual Private Company SaaS Survey on November 13, 2025, which projected that ARR growth is expected to accelerate from 15% in 2024 to 20% in 2025.

Worked example: same new sales, different retention

Take two companies at $2M ARR, each closing $500K of new-logo ARR in a year. Growth equals ARR kept from existing customers plus new ARR, divided by starting ARR, minus one.

Company	NRR (our example)	ARR from existing customers	New-logo ARR	Ending ARR	Growth
A	95%	$1.9M	$0.5M	$2.4M	20%
B	110%	$2.2M	$0.5M	$2.7M	35%

Same sales team, same pipeline, a 15-point growth gap. Company A should benchmark against a lower row than its new sales suggest.

What to do this week

1. Calculate NRR on a cohort basis for the last 12 months: starting ARR from customers active a year ago, plus their expansion, minus their churn and contraction.
2. Split new ARR into new-logo and expansion so you can see which one carries your growth.
3. Pick your benchmark row by funding type first, then adjust your expectation up or down by your NRR band.
4. If NRR sits under 100%, read your retention curves and monthly churn before adding acquisition spend.

What is T2D3?

T2D3 is short for "triple, triple, double, double, double." Battery Ventures coined it in a post on the go-to-market phases of B2B, SaaS enterprise-software companies. The pattern describes annualized revenue growth, and the goal the post set was "a billion-dollar valuation." The audience was founders building a sales-led enterprise company. It was not written for a self-serve or bootstrapped product.

The path starts at $2 million in annual recurring revenue (ARR). At an average deal size of $30k to $80K, Battery puts that at 30 to 60 customers, a phase that "usually takes a year or two". Each later phase comes with a sales team shape.

Year	Multiple	ARR at year end (our worked example)	Sales organization in Battery's phases
Start		$2M	Founders close all new sales
1	3x	$6M	A sales leader plus five to 10 reps
2	3x	$18M	10 to 20 reps, a second layer of sales management
3	2x	$36M	About 20-30 reps, three to five front-line managers, first hires in Europe
4	2x	$72M	Decisions on leadership and partner channels
5	2x	$144M	Our arithmetic, past the phases shown here

In growth-rate terms, that is 200% a year for two years, then 100% a year for three. The full run is a 72x increase in five years.

Battery itself said this is not the only growth path to SaaS success, naming Cornerstone, ExactTarget and SuccessFactors as companies that took other routes.

How T2D3 compares with typical outcomes

Set against the Bessemer averages covered earlier, T2D3 sits above typical growth at every step. In our reading, the hard part is years three to five: holding 100% growth with no decay, where Bessemer's growth endurance rule assumes growth shrinks every year. Even among public companies in the BVP Nasdaq Emerging Cloud Index, Bessemer puts growth endurance at ~80%, so growth still falls each year.

Trajectories also tend to set early. Bessemer found "it is very rare to see a mediocre grower evolve into a high-grower." The exception it cites is Procore, which went from being a bottom quartile grower between $1-10MM of ARR to a top quartile grower by $25-50MM of ARR.

What to do with it this week

Put your current ARR into the growth model template twice. First apply the T2D3 multiples. Then apply Bessemer's endurance decay to your actual growth rate this year. We think the gap between the two lines is the useful number for a board conversation. It shows how far your plan depends on beating the typical pattern, not just matching it.

What is the Rule of 40?

The Rule of 40 says a software company's growth rate plus its profit margin should add up to 40%.

The original post explained the rule as trade-off pairs. "So, if you are growing at 20%, you should be generating a profit of 20%." At 40% growth, zero profit passes. And "If you are growing at 50%, you can lose 10%."

Fix your profit definition before you calculate anything. High Alpha's 2025 report defines the rule as year-over-year annual recurring revenue (ARR) growth plus the last twelve months of free cash flow margin or EBITDA margin.

Where companies sat in 2025

The High Alpha report has a section titled "Median Companies Fall Short of the Rule of 40". Kyle Poyar's Growth Unhinged write-up of that survey, which drew over 800 companies, split respondents by net revenue retention (NRR) and customer acquisition cost (CAC) payback period.

Zone	Share of respondents	Average growth	Rule of 40
High NRR, low CAC payback	13%	71%	47%
High NRR, high CAC payback	15%	40%	21%
Low NRR, low CAC payback	15%	30%	33%
Low NRR, high CAC payback	12%	10%	5%

Only the first zone clears 40. In our reading, the score tracks retention and payback together more than growth alone.

A worked check you can run this week

Take a company with $12M ARR, growing 35% year over year, with an EBITDA margin of minus 10%. Its score is 25, so it is 15 points short.

1. Pick one profit definition and write it down.
2. Compute growth as year-over-year ARR, not a single strong month.
3. Model two paths to 40: margin to plus 5% at 35% growth, or growth to 50% at minus 10%.
4. Price each path against your payback and retention numbers.

Remember the rule's original scope.

How fast should an early-stage startup grow month over month?

Start with the milestone that sets most early expectations: the first $1 million in annual recurring revenue (ARR). ChartMogul's 2023 report, built on data from over 2,200 SaaS businesses, found that top-tier SaaS startups reach $1M ARR within 9 months. The median startup takes approximately 2 years and 9 months. That clock started at the first paying customer.

ChartMogul's 2025 report looked at the odds of getting there at all, using a dataset covering 6,525 software companies and a 10-year window from first monetization. Almost half eventually reached $1 million ARR. One-in-ten reached $10 million, and one out of every fifty reached $25 million.

Speed was rarer still. A mere 3.3% of startups reach $1 million in under a year, against 13.4% in under three years and 25.1% within five.

The monthly rates behind those milestones

ChartMogul's 2023 figures put monthly growth in three tiers. The top decile grew over 10-17% per month when starting out. The top quartile initially grow around 5-7% per month. The median grew around 2-2.5% per month throughout its lifecycle.

Monthly rates compound, so small gaps become large annual ones. The annual column below is our own arithmetic, using (1 + monthly rate)^12 − 1. ChartMogul's own example: to double revenue in a year, you need to grow 5.95% each month.

Monthly growth	Annual equivalent (our calculation)
2%	27%
2.5%	34%
5%	80%
5.95%	100%
7%	125%
10%	214%

Worked example: how long to $1M ARR from here

• At 7% a month, it takes about 21 months.
• At 2.5% a month, it takes about 58 months, close to five years.

To run this for your own company, divide the natural log of (target MRR ÷ current MRR) by the natural log of (1 + monthly rate). Use your average compounded rate over the last six to 12 months, not your best month.

In our reading, the milestone data argues for patience at the median and for honesty about which tier you are in. If your trailing rate sits near 2.5%, plan hiring and runway around a multi-year path to $1 million. Then pick the one lever you expect to move the rate: activation or monthly churn. Test it with a structured growth experiment this quarter.

How to compare your own growth rate correctly

Most bad comparisons come from mismatched definitions, not bad math. A founder computes month-over-month growth, multiplies by twelve, and holds it against a benchmark built on year-over-year annual recurring revenue (ARR). Use the five steps below.

The five-step method

1. Match the metric to the benchmark row. If the row reports ARR growth, use ARR. If it reports revenue, use revenue. Brad Feld's advice on the Rule of 40 was simple: "Just do year-over-year growth rate of monthly MRR." He also suggested checking monthly recurring revenue (MRR) alongside total revenue so you don't miss one time services revenue in the mix that can distort figures under generally accepted accounting principles (GAAP).
2. Calculate the growth. With twelve months of history, use year-over-year MRR growth: this month's MRR divided by the same month last year, minus 1. With less history, use compound monthly growth: (end MRR / start MRR)^(1/months) - 1.
3. Pick your ARR band and segment. Compare against the row for your current ARR and your customer type, not the row you hope to reach.
4. Log it every quarter. One number on its own tells you little. The trend across four quarters shows whether you are holding pace as you grow.

Worked example

That understates your growth by about 23 points and would put you in the wrong row.

Copyable quarterly log

Add one check column if you can. Feld recommended backtesting this with YoY growth of gross margin so you can see whether cost of goods sold scales with revenue. Our growth model template has the compounding formulas built in. If the gap widens two quarters running, look at your retention by cohort before you add spend.

What this page does not cover

This page covers growth rate benchmarks for private SaaS companies and the rules of thumb used to read them, such as T2D3, the Rule of 40 and growth endurance. It does not cover valuation, fundraising terms or how to account for revenue, and it is not financial, investment or legal advice.

Related on Race to Scale: High Alpha 2025 SaaS Benchmarks Report: growth, retention and AI by revenue band; What is a good activation rate? Benchmarks by product type and how to define yours; Free-to-paid conversion rate benchmarks for freemium, opt-in trials and card-required trials.