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The state of the channel in B2B SaaS (Rob Belcher, SaaS Capital)

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SaaS Connect 2019 (San Francisco, CA).

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The state of the channel in B2B SaaS
By Rob Belcher, Managing Director, SaaS Capital

See the detailed transcript:

http://www.cloudsoftwareassociation.com/2019/04/05/the-
state-of-the-channel-in-b2b-saas/

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The state of the channel in B2B SaaS (Rob Belcher, SaaS Capital)

  1. 1. THE STATE OF THE CHANNEL IN B2B SAAS Rob Belcher Managing Director SaaS Capital @rob_belcher March 26, 2019 SAAS CONNECT
  2. 2. © SaaS Capital | www.saas-capital.com 2 Who and Why • Leading non-bank provider of MRR-based credit facilities to SaaS companies • Lend $2 million to $12 million to B2B SaaS companies, usually in lieu of an equity round • Have funded 60 companies to- date in the US, Canada and UK • 8th Annual Survey • Over 1,000 private B2B SaaS companies responded • ~20 questions on 2018 performance • Second year asking questions on channel partnerships (we kept getting asked about it!)
  3. 3. © SaaS Capital | www.saas-capital.com 3 Who has a channel program? • 57% of Horizontal companies, 48% of vertical companies do • Companies with a reseller program were growing 5% faster than those that solely sell direct 0% 10% 20% 30% 40% 50% 60% 70% 80% <$1 million $1 - $3 million $3 - $5 million $5 -$10 million $10 - $20 million >$20 million Runrate Annual Recurring Revenue (ARR) Vertical Product Companies Horizontal Product Companies
  4. 4. © SaaS Capital | www.saas-capital.com 4 What type of partnerships are they? • Slightly more mixed than last year • Horizontal product companies more frequently work with Consulting / implementation partners (31%) • Vertical product companies partner more with other software companies (35%) Software company 28% Consulting/ implementation firm 28% Value-added reseller 20% Complementary non-software service or product 20% Other 4%
  5. 5. © SaaS Capital | www.saas-capital.com 5 How much revenue does the channel create? • Big increase in the lower end of the market from last year: 22% vs 10% • Horizontal companies see a larger share of total revenue through the channel: +6% across all ACVs. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% < $6,000 $6k - $12k $12k - $25k $25k - $50k $50k - $100k $100k - $250k >$250k PercentofRevenue Annual Contract Value Direct Sales Channel Sales
  6. 6. © SaaS Capital | www.saas-capital.com 6 How is the partnership structured? • Referrals or reselling more prevalent in lower ACV sales • Joint selling more common for higher ACVs 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% < $6,000 $6k - $12k $12k - $25k $25k - $50k $50k - $100k $100k - $250k >$250k AveragePercentofChannelRevenue Annual Contract Value Introduction Joint Selling Partner sells on your behalf
  7. 7. © SaaS Capital | www.saas-capital.com 7 Key takeaways and other comments • 53% of B2B SaaS Companies have some form of a channel program • More common in larger companies • No relationship between ACV and prevalence of a channel program • Those companies who have a program, regardless of ACV, see 21% of revenue from channel • Channel partnerships are more common and generate a larger percent of total revenue (+6%) in horizontal companies • Across all company sizes and product prices • Companies with a channel program grew 5% faster than companies that only sold direct • No meaningful decline in retention for companies that sell through a partner compared with companies that only sell direct
  8. 8. © SaaS Capital | www.saas-capital.com 8 Contact Info Rob Belcher rbelcher@saas-capital.com @rob_belcher www.saas-capital.com Thank you!

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