Linear #036: SaaS Growth Rate Benchmarks, The Story of EquipmentShare, 5 Ways To Motivate Your Sales Team

One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.

Sep 04, 2023

2023 SaaS Growth Rates by SaaS Capital

1/ Median Growth Rates by Annual Recurring Revenue

2/ Growth Rate By Annual Recurring Revenue

3/ 90th Percentile Growth Rates in 2019, 2020, 2021, and 2022

4/ Growth by ARR and Funding (Bootstrapped vs Equity-backed)

5/ Growth Rate by Median Net Revenue Retention

6/ Growth and ARR by Company Age

Interesting Takeaways: -Equity backed companies are only growing a ~10% faster than bootstrapped ones -As the markets have focused more on cash efficiency, growth rates have SIGNIFICANTLY dropped in the last two years -After $3M of ARR, the median company growth rate is 30%

Thanks to the folks at SaaS Capital for another fantastic report!

Thanks to the folks at SaaS Capital for some great insights into SaaS retention metrics.

One Biz Story:

The Story Of Equipment Share

These two brothers grew up in a socialist commune in Missouri. Today, they run a $2 BILLION dollar revenue business. Here's the incredible story of EquipmentShare:

William and Jabbock Schalcks grew up in a communist theocracy in Missouri. But that didn't stop the brothers from being entrepreneurial from a very young age. They started their first company around 10 years old, building and renting out sheds.

The brothers love for entrepreneurship continued, and they would go on to start a biz buying and selling computer parts. The brothers had NO personal property and all the money that they made had to be given to the commune. So in their late twenties, they decided to leave.

They continued their entrepreneurial endeavors and ultimately stumbled upon something that would be BIG. They identified the pain of finding equipment for construction businesses so they set out to build a marketplace for contractors to rent equipment to each other.

In 2014, while at a start-up event in Columbia Missouri, the two pitched their idea and emerged as winners. They decided to go all-in on the concept, officially incorporating EquipmentShare and focusing on a rental marketplace.

Since then, they've evolved from a simple marketplace to a full-service platform that digitizes construction workflows. The evolution has been quite something. Equipment Rental Marketplace -> Asset Tracking -> Asset Utilization Monitoring -> Labor Management -> And more...

Eventually, the company had expanded so drastically into every aspect of construction businesses that they launched their very own construction operating system. The T3 OS. A one-stop-shop platform for construction businesses.

One key advantage that they have now, which was likely a disadvantage in the early days, is that they offer their own hardware that can integrate with any equipment brand or model. These include machine tracers, Bluetooth tags, jobsite cameras, and cloud-connected keypads, and more.

Today, EquipmentShare services construction companies of all sizes. Their marketplace acts as great 'wedge' product that gets customers in the door and leads many to their full software/hardware offering. I’ve written about wedge products in the past.

EquipmentShare has raised a total of $2.4 billion through a combination of debt and equity. In May 2023, it raised $640 million in debt financing from Capital One. In April 2023, it raised $290 million in equity financing from various investors. Quite the fundraising tear.

EquipmentShare reportedly had around $2 billion in annual revenue in December 2022. The company has more than 4,000 employees across 165 locations in the US as of August 2023. $2B in revenue in 9 years is QUITE the scale-up.

Is an IPO on the horizon?

My guess is it has to be coming soon...

Excited for the founders and team to ring the bell. What they've achieved from humble Missouri beginnings is quite the tale.

One ‘How To’:

5 Ways To Motivate Your Sales Team (SaaStr)

Click the photo above to see the article.