Pricing & Packaging and the developer buyer — 4 insights from SaaS IPOs

  1. X-small: ACV < $10k, e.g. Dropbox, Slack, and Zoom. 13 companies
  2. Small: $10k <= ACV < $50k, e.g. Datadog, PagerDuty, and ZoomInfo. 12 companies.
  3. Medium: $50k <= ACV < $100k, e.g. Fastly, Sumo Logic, and ZScaler. 6 companies.
  4. Large: $100k <= ACV < $1m, e.g. Anaplan, Medallia, and Snowflake. 8 companies.
  1. Insight #1: x-small ACV companies have visible pricing; the rest tend to be opaque. Companies that sell to developers all have visible pricing irrespective of ACV.
  2. Insight #2: A quarter of companies offer a free version of their product so customers can “try before they buy”. On the opposite end, a quarter insists on a sales demo as the only way to experience the product. The rest offer a trial as the offer of least friction. Where you fall on that spectrum depends on the ACV and buyer profile.
  3. Insight #3: Trials are typically 30 days long, do not require a credit card, and are fulfilled immediately.
  4. Insight #4: x-small ACV companies offer monthly billing. Annual billing is offered at an average 20% discount to monthly billing. 90% of companies selling to developers offer monthly billing.
  1. Benchmarks for Key SaaS metrics from SaaS IPOs of 2018–2020

Insight #1: Pricing Visibility

Percentage of companies with visible pricing

Insight #2: The least friction offer

Distribution of the least friction offer

Insight #3: Trial duration, fulfillment, and credit card requirements

Insight #4: Monthly billing

Summary

Footnotes

  1. ADIN, AVLR, CBLK, DBX, DOCU, DOMO, ESTC, PLAN, PS, SMAR, SVMK, TENB, XM, ZS, ZUO went public in 2018. BILL, CRWD, DDOG, DT, FSLY, MDLA, NET, PD, PING, SPT, WORK, ZM in 2019. API, ASAN, BIGC, BSY, FROG, JAMF, MSP, NCNO, SNOW, SUMO, VERX, ZI in 2020.

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