It’s been a little over a month since we unveiled our SaaS Success Database, a 66-company list of private, public and acquired SaaS-company standouts.
The reaction to this list, and the accompanying data we revealed about each company and its founders, was very gratifying. We heard from scores of people who said they learned a lot from our analysis and gleaned lessons that may help them as their build their own SaaS enterprises. Which is great!
But we also heard from folks who had questions about our analysis, our methodology—and a few who said they really thought they should be on the list.
So now that the third quarter has officially come to a close, we wanted to do a couple of things: One, update the list, so that it’s current in light of market moves; and two, clarify our criteria for including companies on the list. The SaaS Success Database is supposed to be a living, always-changing dataset, and we intend to update it quarterly. Here are our thoughts/comments, in a back-and-forth format.
Neeraj Agrawal: So it’s been a little over a month since we unveiled the SaaS Success Database. I thought it would be helpful for us to do a little clarification on our criteria and offer an update on what’s transpired in the last month, since we just reached the end of the third quarter.
Logan Bartlett: Makes sense and works for me. Should we start with the criteria for putting a company in the database?
NA: Seems like the most important point. So the simplest definition of a company that makes the list is either a venture-backed, private SaaS company valued at over $1 billion; a public company that is valued at over $500 million; or a company involved in a strategic acquisition – meaning acquired by a public tech company – for over $500M.
LB: Right. The last point is a tough one. There are quite a few SaaS companies acquired by a private-equity sponsor for over $500M. There are also acquisitions through which a private equity-backed business buys another private SaaS company for over $500M. Skillsoft acquiring SumTotal comes to mind. These companies aren’t going to be on the list. But SAP buying Fieldglass (which was majority owned by MDP) would make the list.
NA: My thought in keeping that definition is that this list really is about the adventure to getting to a successful SaaS outcome for a company’s founders. We can slice and dice this in a lot of different ways, but ultimately this is a pretty clean definition that gets at the type of list we want to be focused on. Companies on the list are going to be mostly venture-backed companies with no majority investor.
LB: The one exception to our clean rule is MailChimp. I’ll take the blame for that one muddling the cleanliness of our definition. They just should be on there. It’s a SaaS model and it’s one impressive company. Plus you know I love companies from the Southeast. Hopefully Ben and team appreciate their exception status!
NA: Names are also going to come on and off the list over time. APTTUS joined this month. Castlight and Rally are out due to public-market movements (and then ultimately the acquisition of Rally). Dealertrack was acquired by Cox (shifting the list composition, but still remaining on). We’re going to lock these in at the date of writing and then provide quarterly updates.
LB: Nice segue. Here’s the list as of 9/30/15:
NA: The private-company total goes up by one (APTTUS) as does the acquired bucket with the addition of Dealertrack. We lost three public companies (Castlight, Dealertrack and Rally), as noted earlier.
LB: It’s the first time in a year that the number of public companies went down.
NA: Could mean nothing. Could be some plateauing of company valuations. I’d lean to the latter. Obviously the public companies are the only ones with dynamic prices.
LB: I think there is some softness there, but will be interesting to monitor overtime.
NA: I also want to note that we’re going to be telling the stories of the companies on the list with the founders and CEOs of those companies. We knocked off AppDynamics* and Marketo* (which you can view here and here respectively). You’ll see more coming. If you’re founder or CEO of any of these companies – let us know! We’d love to work with you to tell your story.
*For a full list of all Battery investments and exits, please click here.