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Current Trends in B2B and for 2025:

The New Era of HyperFunctional SaaS.

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Jason Lemkin

Founder & CEO

SaaStr

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About Jason

Andrew Bialecki

Co-founder & CEO @ Klaviyo

Jason Lemkin

CEO & Founder @ SaaStr

Rene Lacerte

CEO & Founder @ BILL

2x Founder: EchoSign -> Adobe, NanoGram Devices -> Greatbatch

SaaStr #1 Community for B2B Founders since 2012

  • 125,000+ to global events (SF Bay, Europe, APAC)
  • 1,000,000+ social, etc.

Seed VC since 2013, 100% B2B, Transpose anchored in 2016+:

  • Co-led seed exits: Salesloft ($2.4B cash), Pipedrive (first investment, $1.25B cash), Logikcull ($280m cash), Automile ($1B SEK)
  • Other top seed deals as lead: Talkdesk ($XB with Transpose), Algolia ($2.2B, $250m ARR), RevenueCat ($350m), Gorgias ($650m), Owner ($350m), etc.

Jason Lemkin

CEO & Founder @ SaaStr

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About Jason + SaaStr

SaaStr is definitely the largest collection of people who like enterprise software on the planet. It’s a great community of people trying to build companies and learn from one another. It’s pretty amazing to see. – Aaron Levie, CEO @ Box

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We’re Back … But It’s Different. More Different Than It Looks.

Same But {Very} Different:

  • Unicorns up 50% from 2023, but AI-driven or true scale ($100m+ ARR)
  • VCs back to “normal”, but limited liquidity
  • 3 amazing SaaS IPOs, but no crazy valuations — Klaviyo, Rubik, OneStream arguably cheap

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We’re Back … But It’s Different. More Different Than It Looks.

Same But {Very} Different:

  • Unprecedented investing pace
  • $100B+ Exits … will come?
  • 2024 is highest risk tolerance I’ve seen in my career in venture

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SF Bay Area: Re-Acceleration for B2B. For Senior Folks.

43% of SaaS funding now in SF Bay

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Almost everyone senior I know that left during Covid … is back

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Even AI start-ups outside SF Bay are there all the time, or even partially moved there

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No Downturn. It’s A New Normal.

Good Times:

  • Cloud spend +20%
  • “B2B2C” Strong (non-tech buyers)
    • Toast +29% at $1.5B ARR
    • Monday +34% at $1B ARR
    • Shopify +26% at $8.6B ARR
    • Klaviyo + 33% at $1B ARR
    • Samsara +36% at $1.26B ARR
  • AI Crazy Strong
    • Google Cloud +29% at $10B ARR
    • Azure +30% at $81B ARR
    • Palantir +30% at $2.9B ARR
    • GitLab +30% at $730m ARR
  • Security + Compliance Strong
    • Crowdstrike +34% at $4B ARR
    • Rubrik +40% at $920m ARR
    • OneStream IPO +37% at $500m

Challenges:

  • Salesforce +9%
  • Mongo +13%
  • Elastic +18%
  • Asana +10%
  • ZoomInfo -6%

☀️

🌧️

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Seed Investments Most Expensive Ever … But Public Multiples Still 66% Off Highs

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Growth Remains Epic for The Best of the Best

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VC Valuation Gap vs Public Comps Highest Ever

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Can We Get Back to Beating Nasdaq? Tough 3 Years

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Can We Get Back to Beating Nasdaq? That’s the Bet

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But AI is Clearly Unlocking New Budget. Q: How Much?

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An AI Bubble? Yes. But How Big? Will Budget Migrate?

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Startups Are More Efficient Now. Sort Of.

Overall, start-ups are 20%-25% more efficient

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But for the hyper-funded, it’s 2021 all over again -- no different

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2024-2029: The New Era of Hyperfunctional SaaS

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  • AI Now Table Stakes.
  • And Product Has to Much Better For It.
  • Radical Efficiency, At Least Post-IPO
  • Automation Everywhere
  • Multiproduct The New Normal
  • Customers Demanding Much More Than a 10x Point Solution

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AI Is a Force of Nature. It’s Also … Table Stakes in SaaS

A ton more work, a ton more functionality, in the end probably for the same ACV. Oh and yeah -- all the competition is doing it as well. It’s harder. Cry me a river.

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The Bar To a Truly Great Product Is Way, Way Up

Customers expecting:

  • to replace 30%-50% of workforce with AI
  • all unstructured data to now be instantly structured and searchable
  • every product to work in a plain english prompt
  • even complex onboarding to be fully automated
  • core platforms to do the work of 20 add-ons and point solutions

And they are being promised this. Often over-promised, but still.

AI has taught everyone this is “easy”. Customers now demanding it.

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Radical Efficiency Is The New Normal … Post IPO

This means even more product with fewer resources

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The New Normal: 20%+ Margins at $1B ARR

The New Normal: 700 FTEs at $200m ARR

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Automation Everywhere

Workflow + dashboard aren’t enough

AI is Automation on Steroids

Much of the enterprise (and SMB) AI spend is on automation 3.0

The AI Bubble may pop (AI spending like in SaaS in 2021) -- but customer expectations are forever changed

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MultiProduct is Now the Norm. Gotta Start Much Earlier.

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So many at $50m, $100m, $200m ARR are now seeing growth slow to < 20%. And net new customers often close 0%

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Why? They’re still really Single Product

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Death of the Point Solution?

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Maybe, maybe not. But seems like it.

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Leading vendors all doing more and more.

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At a minimum, you have to step it up at least to scale.

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Customers are expecting HyperFunctionality

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Who Will Do The Work?

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Founders as driven as ever … but what about the rest? Do most of the rest really want to do the work of a startup?

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A challenge for all of us

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4 of 813 raised their hand …

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My message to founders:

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Go Find Your Monday

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THANK YOU

Jason Lemkin

Founder & CEO

SaaStr