KeyBanc SaaS Survey 2025: 5 Takeaways for Founders

The KeyBanc Capital Markets SaaS Survey, produced annually in partnership with Sage, is the most frequently cited benchmark dataset for private and public SaaS companies. The 2025 edition, covering fiscal year 2024 financials, polled over 400 SaaS companies — a mix of venture-backed privates, bootstrapped firms, and public carve-outs. Median ARR across the sample was approximately $45 million, skewing toward growth-stage rather than seed.

For founders, the survey matters less as a benchmark against peers and more as evidence of what the current funding environment values. The 2025 data reflects a market that has been disciplined on burn for 24+ months, still rewards efficient growth, and has compressed the gap between "good" and "great" metrics.

Five takeaways worth the read.

Takeaway 1: Gross margin median has held, but the distribution is wider

Median gross margin in the 2025 survey landed at approximately 75% for the overall SaaS sample — essentially unchanged from prior years. But the spread has widened: top quartile performers are consistently above 80%, while the bottom quartile sits closer to 65%.

What moves the distribution:

• AI/ML infrastructure costs. Companies running heavy inference workloads on cloud GPU infrastructure report gross margins 5–10 points lower than equivalent-ARR peers without AI infrastructure. This is a real drag that did not exist in 2022 and will not persist at current magnitude as GPU prices normalize.
• Services mix. Companies with >15% services revenue show meaningfully lower gross margins. The survey consistently recommends minimizing services revenue to maintain SaaS-quality economics.
• Customer concentration. Companies with top-10 customer concentration above 30% tend to have compressed gross margins because enterprise customers extract unit-cost discounts that tier-2 companies cannot push back on.

For founders: if your gross margin is 65–70%, diagnose which of the three factors is pulling you down. If it is services mix, that is a strategic choice. If it is AI infrastructure, that is a temporary cost you can argue around in investor conversations. If it is customer concentration, it is a harder problem.

Takeaway 2: Median growth rate is ~30%, down from mid-40s three years ago

Median year-over-year ARR growth in the 2025 sample sits around 30%, down from ~45% in 2021's peak. The compression is not evenly distributed — top quartile companies are still growing 60%+, while median has dropped because the middle of the distribution is burning less and growing slower as a trade.

The new "efficient frontier" for venture-backed growth-stage SaaS, based on the 2025 data, centers on:

• 30–50% ARR growth
• Gross margin above 75%
• Net retention 110–115%
• Rule of 40 around 40 (growth% + FCF margin%)

Companies below 30% growth find funding conversations harder. Companies above 60% growth still attract premium valuations, but only if they can also demonstrate a defensible path to profitability — pure growth without efficiency is no longer sufficient.

Takeaway 3: Net retention is the most predictive metric

Across the 2025 survey, net dollar retention (NDR) correlates most strongly with both valuation multiples and fundraising success. Median NDR sits around 108%, with top quartile above 120%.

What the survey is telling you, when you strip away the averaging: if your NDR is below 105%, almost nothing else you show investors will compensate. Slow new customer acquisition can be forgiven. High burn can be forgiven. Sub-105 NDR cannot, because it signals that your installed base is either churning or not expanding — and no amount of new sales motion recovers that gap at scale.

For founders thinking about competitive positioning, the implication is direct: the competitive moves that protect and expand NDR (preventing churn to competitors, enabling expansion to new use cases, deepening product-market fit inside accounts) are higher-priority than the moves that generate new logo acquisition. This is a shift from 2020 thinking, where new logo growth was weighted roughly equally with expansion.

Understanding where you are losing expansion revenue requires clear competitor monitoring — customers who churn or downgrade are often moving to specific competitors for specific reasons, and those reasons are the gap in your retention story.

Takeaway 4: CAC payback compressed from 24 months to 18

Median CAC payback in the 2025 survey dropped to approximately 18 months, down from 24 in the 2023 survey. This is the clearest signal in the dataset of the discipline shift since 2022.

Top quartile CAC payback now sits around 12 months. Below 12 months, the survey shows diminishing marginal ROI — companies with very short payback tend to be under-investing in growth. Above 24 months, the company is in the "inefficient growth" zone that 2022-era boards specifically warned against.

For founders, the practical framing:

• If your CAC payback is under 18 months, your unit economics are supporting sustainable growth. Focus on scaling what works.
• If it is 18–30 months, you are in the zone of acceptable venture-backed growth but should have a clear plan to get to 18.
• Above 30 months, you have a unit economics problem that will constrain future fundraising, regardless of ARR growth rate.

Where CAC payback gets compressed fastest: self-service motion expansion, pricing and packaging optimization, expansion-revenue emphasis over new logo.

Takeaway 5: Rule of 40 is still the single best summary metric

The Rule of 40 (growth rate + free cash flow margin) remains the most commonly cited single number in investor conversations in 2025, and the KeyBanc survey gives it a structured benchmark. Median 2025 Rule of 40 sits around 35, up from 28 in 2023 — reflecting the industry-wide move toward more profitable growth.

Top quartile Rule of 40 is above 50. The specific composition matters:

• 60% growth / -10% FCF margin = 50. Still acceptable but requires strong fundamentals elsewhere.
• 40% growth / +10% FCF margin = 50. The "efficient growth" profile that current market conditions reward most highly.
• 20% growth / +30% FCF margin = 50. Possible for mature companies but harder to fundraise against at growth-stage valuations.

All three reach Rule of 40. The middle profile — balanced growth and margin — currently commands the highest multiples in public markets and in late-stage private rounds.

What the survey does not tell you

The KeyBanc survey is benchmark data, not strategy. It tells you where you sit relative to the SaaS industry at large — it does not tell you what to do about being an outlier.

Some specific limitations:

Selection bias in the sample. Respondents skew toward companies that track these metrics well enough to report them, which correlates with better-run companies. The true median across all SaaS companies is likely worse than the survey median.

Revenue-scale effects. Metrics normalize differently at different revenue scales. A $10M ARR company with 100% growth and 70% gross margin is performing differently than a $100M ARR company with the same numbers. The survey medians blend these scales.

Category effects. Vertical SaaS, horizontal SaaS, dev tools, and infrastructure all have different benchmark distributions. Median across the full sample can mislead if your category is consistently above or below average.

Lag. The 2025 survey covers FY2024 data, published mid-2025. In a market that moves quarterly, year-old benchmarks are directionally useful but not precise.

How to use the data

The right way to use KeyBanc benchmarks is as a calibration, not a target. If your metrics are materially below median, that is diagnostic — it tells you where to look for problems. If your metrics are at median, that is the baseline expectation for venture-backable SaaS. If your metrics are at top quartile, that is a fundable story.

What does not work is setting goals based on median numbers. "Let's get to 75% gross margin because that is the median" is not a strategy; it is goal-reversal without underlying diagnosis.

For competitive positioning specifically, the survey matters because investors and boards will compare you against these benchmarks whether you like it or not. Knowing where you sit and being able to articulate why your deviations exist is the table-stakes version of competitive intelligence at the metric level. Understanding how your competitors compare on the same metrics — public carve-outs especially — turns the survey into actionable competitive data.

Try Seeto free if you want structured competitive analysis to complement metric benchmarks — features, pricing, positioning, messaging across your direct competitors in one run.

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The KeyBanc Capital Markets 2025 Private SaaS Survey is produced in partnership with Sage and is freely available from KeyBanc Capital Markets. Specific metric figures cited are approximate; consult the published survey for exact values.