Published on March 12, 2020 by:
Hi! I am the creator of peatch. I help tech entrepreneurs convince investors. I am a director @ Roland Berger Tech Ventures.
In 2018, the median ARR per FTE for private SaaS companies was 110K$.
The ARR per FTE metric is not a metric you’ll use to pilot your business. It results from your business performance and is generally used by investors or acquirers to benchmark your company against competitors or similar companies.
That being said, here is the benchmark and its evolution over the last 4 years for SaaS businesses:
Data points come from KeyBanc Capital market SaaS Survey [2016 > 2019]
Key takeaway:
- In 2018, the median ARR per FTE for SaaS companies was 110k$. This number has been on the increase for 4 years (+3,4% per annum)
- The ARR / FTE ratio tends to be more stable for SaaS companies with more than $5M in ARR (+1.6% per annum vs. +3.4% per annum)
- A closer analysis of 2018 figures, tell us that: larger companies (in terms of ARR) have greater ARR / FTE ratio: SaaS Companies with >$100M generate 3.3x more ARR / FTE than SaaS companies < $2.5M
We can also compare this metric for private companies to some well-known listed companies:
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Footnotes:
[1] ARR (Annual Recurring Revenue) is the value of the recurring revenue of a business’s term subscriptions normalized for a single calendar year
[2] One FTE (Full time equivalent) is equivalent to one employee working full-time
[3] Data source: marketwatch, KeyBanc Capital market SaaS Survey [2016 > 2019]