SaaStr 718: Predictions for Venture, IPOs and the State of SaaS in 2024 with SaaStr CEO and Founder Jason Lemkin and Harry Stebbings, Founder and Host of the 20 Minute VC
Jan 23, 2024
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Jason Lemkin, CEO and Founder of SaaStr, and Harry Stebbings, Founder and Host of the 20 Minute VC, discuss predictions for Venture and IPOs in 2024. They talk about standout companies in 2023 like OpenAI, the challenges of VC funding, surprising lack of support from big funds, concerns for the future of SaaS growth, goals for 2024, and revenue goals and growth strategies in the SaaS industry.
The standout companies of 2023 emphasized the importance of staying focused on long-term goals and showed significant growth.
Investors are now shifting their focus from searching for unicorns to hunting for decacorns, targeting companies with the potential to reach a billion in revenue and become true market leaders.
Deep dives
Review of 2023's standout company
OpenAI had a remarkable year, growing from a $100 million run rate to $1.4 billion. The company's revenue growth has been generational and has brought attention to the potential of AI. Another impressive company is HubSpot, which continues to dominate the market and has expanded its offerings beyond its origins as a blogging and website platform. The founders' long-term vision and commitment to building something big have paid off. Overall, the standout companies of 2023 have shown significant growth and the importance of staying focused on long-term goals.
The challenge of returning to growth after survival mode
Many companies that survived the difficult times of 2020 and 2021 are now faced with the challenge of returning to growth. While they have achieved cash flow positivity, they are struggling to regain strong growth rates. Going IPO at lower revenue multiples is not desirable for them. However, companies that have managed to maintain marginal growth and cash flow positivity stand a chance. The path to growth may not be clear yet, but some companies are back to focusing on growth and willing to take those risks.
The search for decacorns in venture funding
Venture funding has shifted from searching for unicorns to hunting for decacorns. Investors are looking for companies with the potential to reach a billion in revenue and become true market leaders. The industry has become more realistic about the number of decacorns that will emerge, and funds are targeting those high-growth companies. While there may be periods of uncertainty and fluctuations in funding, as long as there are potential decacorns in the market, venture funding will persist.
Concerns and predictions for SaaS in 2024
There are some concerns regarding the growth of SaaS in the coming years. The deceleration of growth in public SaaS companies in 2023 raises questions about the possibility of permanent slowdown. The saturation of SaaS spending may be reaching its limit as the market absorbs more and more software. While there will always be opportunities for seed investments and new tools, the growth of established SaaS companies may become more challenging. It remains to be seen whether SaaS will continue to experience significant growth or if the industry has reached a point of maturity.
SaaStr 718: Predictions for Venture, IPOs, and the State of SaaS in 2024 with SaaStr CEO and Founder Jason Lemkin and Harry Stebbings, Founder and Host of the 20 Minute VC
Harry Stebbings, Host of the 20VC, recently hosted SaaStr CEO and Founder, Jason Lemkin for one of the first podcasts of the year. Together, they talk about the best of SaaS from 2023, the state of SaaS in 2024, and their predictions for Venture and IPOs for the year ahead.
SaaStr hosts the largest SaaS community events on the planet.
Join us in 2024 at:
SaaStr Annual: Sept. 10-12 in the SF Bay Area. Join 12,500 SaaS professionals, CEOs, revenue leaders and investors for the world's LARGEST SaaS community event of the year. Podcast listeners can grab a discount on tickets here: https://www.saastrannual2024.com/buy-tickets?promo=fave20
SaaStr Europa: June 5-6 in London. We'll be hosting the 5th SaaStr Europa in London for two days of content and networking. Join 3,000 SaaS and Cloud leaders. Podcast listeners can grab a discount on Europa tickets here: https://www.saastreuropa2024.com/buy-tickets?promo=fave200
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