Financial analysis of 12 high-growth SaaS companies that went public in 2019, including Cloudflare and Slack, shows median annual revenue of $242M, up ~48% YoY
Alex Clayton / Meritech Capital : Tweets: @louicop and @hkanji Tweets: Louis Coppey / @louicop : Was lazy to read all these S1s, so I read this: https://www.meritechcapital.com/ ... For even lazier but still SaaS geeks, this is what the typical SaaS IPO (ie. the median numbers), vintage 2019, looks like: - $280M in ARR - 50% YoY growth - 75% Gross margin Hussein Kanji / @hkanji : Out of the 16 high-growth names that went public in 2018, every company has increased their market cap significantly except Dropbox and Pivotal https://www.meritechcapital.com/ ...
Context & Ripple Effects
Meritech's read of the 2019 vintage lands midway through an arc that began with Slack's direct-listing filing, which showed a $138M loss on $400M revenue — the scale-plus-loss profile this cohort normalized on its way to market. Hussein Kanji's companion note supplies the payoff data: of 16 high-growth names from the 2018 class, all but Dropbox and Pivotal had grown their market caps significantly.
The analysis matters because it fixes the median bar — $242M revenue, ~48% growth — just as later coverage shows the ground shifting beneath it: [[a:961077|recent IPO valuations relative to revenue are at their highest levels since the dot-com era]], and Series C valuations rose 40% to a $210M median while underlying revenue grew only 20%.
First-order effects
- Cloudflare and Slack anchor a 12-company 2019 class whose median profile — $242M revenue growing ~48% — becomes the reference template investors apply when pricing the next wave of software listings.
- Kanji's tally of the prior cohort shows every 2018 name re-rating higher except Dropbox and Pivotal, giving the 2019 entrants public-market proof that high-growth SaaS listings have generally rewarded holders.
Second-order effects
- Private-market pricing is outrunning fundamentals: Series C valuations jumped 40% to $210M while revenue grew only 20%, widening the gap between what late-stage investors pay and the growth rates this IPO cohort actually delivered.
- With recent IPO valuations relative to revenue at their highest since the dot-com era, underwriters and late-stage funds face pressure to defend their multiples against the ~48% growth bar this Meritech dataset establishes.
Third-order effects
- If the pattern holds, the SaaS IPO hardens into a standardized asset-class template — median revenue, growth, and margin figures quoted as deal terms — while the divergence between rising valuations and decelerating revenue growth becomes the froth indicator limited partners and regulators watch.
The trend: Software listings are consolidating around a standardized high-growth IPO template whose valuations are rising faster than the revenue underneath them.