SaaS update for July 2023: Growth remains slow, but steady at 11.4%

[PW-Metrics-Paddle-Logo-White](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVm3q905V1-WJV7CgS04W7dSSgk5b-wf3W2XYjd03-HSdFW6FmGpr5M3CvdW686yw25J3_btW63cLXY4VmGtsN8fRRcC3VpC-VD-l-B9bJ9DjW3XlDGg45N6SJN5nwRpVzRpbCV51qf91Wtf25W9kcKBP7MzyWYW2Pfvz52Vw0KWW8Sd23l39p2YSVlVBpP4TWhd5W2yD36X7nqfBdVgYDyp1W9_VLW64zqkm3GXLJQW4x9_sY2pBdJWW2Fpq6D9lNrccW1PNmt046wTXRW4NzsvH2sNyb8VPbzKJ38cKL4W3cgFDf9hfY1PW5f09ld10p9Bb3jr81) SaaS Market Update [July 2023: MRR growth remains slow, but steady at 11.4%](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgLvfW5j9W_M6FDFVjW1Fj0lL70JhdhW4BywKW4kZt1LVtVX5W4T5X-JW3XTq9F9dHbY8W2g_wj_9k3BXCW207Glz4YGq8cW4HDjsT8fQFNxN87kssp8W_FhW1BklJC4z3fGWW1FBk5877RNBJW16ZHJp83Zm77W4gWHgC7cYyjWVpfK_M389yZlW6-NC644LG8VwN5-dSq6J7nt4VP_Q7N6J7KcQW4ZSPHx5v3cvSW24hXQV2g1fZFW1YQMPP69SBpgW385kQB92HSFTW8C36VW5JK0qNW17q0nq4R5rThW5cXkLt3z4V-YW4VBX9Z24vTVlW60PM694yGx4kW8qbTTN2gZnx9W1bBc4_15t661W99ZF2C2GDvsZW3cyLMG6Kf0CG3hfs1) [ProfitWell Metrics](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgTCXW5FPqvG20CX-jW96fzqr7Y9JM1MCNHGkWT1KmW57wXBy6YZG_fW7cX50P5kZmNdW4m-gCB15sJvZW2vMKL48cvr-lVYlXZn13KQTRW5w3hD48H84qKW4TR9Jt6gYbnfW6Q7Mvm3qHkL7W3z67SY3ZCT8rW8v2ZF85gqNnDW4WFcJ695Mw9VW8QjGtN2LL9GCW6mmc5R2MqY6tV4CVSw3FkCznW7dh16V90lHqzW6D5FJj12RnrTV5D6wV3vK2_fW8xG4hc3QG1Z1W5sPG6B5yG2QmV2Psyk7CTynpW2ljcW-4Wt18HW8fQjWF97v-_jN5x72Yk6_ycG35Xh1) data shows that the B2B SaaS industry continued to see historically slow growth in June. Companies saw slightly lower subscription activity volume overall entering summer, with both slower sales and less churn being reported. Still, churn stayed high compared to previous years, including pandemic-era levels. [Read the Full Report](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgBN3W13Sx_74JFNvNW5qRNDc5F3X1lW7XCSqv4WFhYKW1KRmnK6mNWRJW4RRFf18wmMp0W8y8NyG1H5xrqW8MLJs196rgn-W1KzXyt5-fR3JN1B4RKZKR5zvW64KF4F1fcQq7W7TKQQB963HJwW115s-J1c3H98W8jQvSl1_VJMyW91rr0M7zg4PLW8TXNwJ3lld43W59ydYb95Q_cMN7ljs8HJ3Rx2W7N_8tZ5XTXvyW2_bnwv6HL3_ZW8_2Kjk5TPtwsW4yzM9t4Rn-FKW1QDWC-6nHrx-V50ljH4r591LW89TwM85sqShyW13qM4g6Zzcc8W43hnCY13Z7HQN6ZyK6WvmZ91W6rpZ9S5WCpZhW7dNYRx6xtXFWW1XKQph1-qz6K34gk1) [Zoomed B2B Index-MRR, 20210622-20230622](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgGQmW1zCg3m9j-ycbW4B59W93Q62X6N10z9Xccz5KQVqPRkD59NS0kW8rqpMn3Wj_-wW9b-fP014Wx4PW7BtfcH5RdDhFV7vlHX5BK7LKW2SWgSc5Hjy5wW3RKjP35_LPgCW994jGH1RCqmFW8Gs2rY27lRCkW5-BBM48H0NRmN5JsVmCyWb-bW1vJGP63yM7f4W8TNPqG6HDswgW5LGN6X5S2SqRW7XCWgv93CDgsW7kv3062JBZNxW2z-6zS82mByKN3PZ3kRX7z_BN3JSF8rxQgnfF4n6BL7-9v4W8rczkr8BWg17W91Rfcp330YYQW4S46bH4PGT8PW22YXrY5H4HMZW4n70F65sYvDNVfj6zX67xDrNW6W20vB7KCK5g3dMF1) SaaS revenue growth stays close to 11% The [ProfitWell B2B SaaS Index](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgRfFN8D4VNwVXzR3W8R2BWt6cY0cPW8K16PV77hpSqW3rSzRg7PwH44VTfpy88Vw0ZYW1CW9Xv6DfFNfW3r8Qqf6g8xzsW4rmJz915JcCxW20cgz54G247wW18ZT2N5fSGqwW1c0cJ55ksmvrW7MzMD-4TmnvKW747gK61QBhrKW7gCnjt3468dwW4MsQhR5tTf6qVfGldp307kKbW6hn69t8bHnJ_W4JZ0v8883m0lW5YX2KZ958yTRV_scNH3gwDlyVTr1V04wc03qW3x8fHt9gqzGzN3vbHGT1GsLTW8BkNSB29vb6CW8DwxD52GmnK-W1_-cX15DsPnYW37XxpF7L0d7VW3C2JSR5H7cRjW8x8tbW3gDV-DN3KNvLqlvSBF3cxW1) tracks the cumulative [Monthly Recurring Revenue](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVZ3q90JV1-WJV7CgLHjW3cRXxc7n3kxNW72pB3t52S82MW3clg_y6NtM1cW2RltQ-5tyXnXW64tQ8t2p_08ZN6Cqt62SZS5XW6j6YLL8PKZyGW96z7jN8G8xFzW6qJwCp96dvKzW8nM-Xl3XL8PGW5dc8Hy3-mR5hW2T_m0J842cV4W8KpJ-m4B6sklW2XnpdT78NyhjN98R12R5R6FfW1Yt4Q74PpcFqN8jhRgN6X7-9W88lGyv7zsTMYW89DsC_4yB4mWW8jVsNw66sW0RW6bdmMZ3cbKx5W5YfCJB9bCbg-W3KWgsB8QZrJhW7LkpqS5mgdDfW1Q6r2t5xm5LzW6HV9_M8JjQxnW3WBh_Q6RyF4xW7xpwKG5QRg-X3cRT1) (MRR) from a sample of the 33,600+ companies on [ProfitWell Metrics](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgL3KN18mtXL2qm0BW5BMZ0X3l1767W12mZYp848VJQW68Mp0-6Yz4FkW68LKjH5Mt5N2W4LHTpx6m5xxWVW8RLh2xRdsBW2QR13h5WhhR7W6yfxYj7Br73DW1W53k721ZKPSW5N5Pv64HvShYVtqbrK2Nqn3zW3fLNNl2GrJ68W2PWQ4c52xttXW4zqZ_X5YK2d2W2jPdX29c7pHBW1l1TCP5rYBfZW6CmWyb5rm0QvW1gV5Ds7rJmJNW3T8hXj7nKnmBW4SDGmX7lr4XGW5pZKBz99lnjHVsQqz61XpNWHW1Xx8CW341g3XW3r5KXn1YVB4lW6KkNjp4PsL1y36031). B2B SaaS companies increased MRR by 0.92% — or 11.4% in annualized terms — from May 22 to June 22. This is much slower than the same period last year, when SaaS MRR grew at a 44.8% CAGR. While it’s too early to know for certain, it appears that revenue growth is stabilizing after the past year’s interest rate hikes and tumult in the technology sector. [Zoomed B2B Index-Growth Rates+Anno, 20210622-20230622](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgZZvW7Qt3Jz4jqWBZW2tl2Vm8xBjmyW3vDXHz3RJsYlW1zhbGl4nS8dsW7L-1HX8lnVm7W2C3Qkm1jpYCSW4Hglyj9gZ9-vW5dPxBB29BXlWW4086W68_mZmVW69dPMS3lfnBbW59Sglz8KQCVDW8y4QR51s0C8lW4_287k37Z8gbW5vQx122K-p6lW2QpkYQ3n-XHQW2bSfqq70bvNdV5cnhg6z--6zW7yjWxc51vcCmW51cMyg37pD_SW7036Lp2q6-x_W3J0qtC2mjYVfW6Pt70r7jKsg0W8PhYWK362VRYW6-vQZz1LzRDSW2YJCnQ8GvWPpW8TjZx57Rgn9xVDlCcW1GsP_gW3PpfG66YvGh3W4hyh0n7XCt_1W3RssBH5D680R32wL1) After a Q1 spike in growth (which likely reflects end-of-year bookings being realized as revenue), B2B SaaS has averaged annualized growth rates of 10-11% this year — a tick down from H2 2022, when growth was averaging around 18-20%. Still, these are better figures than we’re seeing with the ProfitWell B2C Software Index, which is showing 0% MRR growth in consumer-facing subscription software for 2023 so far. This indicates that B2C Software companies have taken the brunt of the recent correction in the tech sector, while revenue growth in B2B SaaS continues (but at a slower rate). [Zoomed B2C Index-MRR, 20210622-20230622](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgNpmW3n_W8P1tbWnkW1Rgp7G8smhGwW635Msl7-bpcwW7TBNS42D362vW1jztJS60x0jtW8ZVyVm2G0f-yV-rCs45334T1W64_rKd1z0ndLW7QRKx21f4mdwW6Sm-0h3mzrVtW1xPgjH6g8XnWVqscmd7TLrs_W37ymqh6_MK2nW7WzTSj38yV4hW2S-CjB13bRnDW7plnbd6pdBWCW4G22wr6MbcKrW5QRHcm147WY3W6ncGG658RsL-N802wNMjshy3W3KYN0P5YY9bCW4J8cDD6pNW3zW84F82p7DH6cyN8h9X3j3_6f3W1Ybfgx8vCj8MW4lSWdn7Gd7RCW8GqFW72LmhXbN1Cp9nvj607wM5hpls7CTl0W43dZBS19QY023gkZ1) Transaction volume down for the summer, but churn still elevated The ProfitWell B2B SaaS New Index is a seven-day rolling average of MRR from net new sales, expressed as a multiple of typical daily sales in 2019. A 1.00 index reading represents sales on an “average” day in 2019. Sales and churn activity both slowed as the northern hemisphere entered summer. The SaaS market often slowed down in summers prior to the pandemic, and it appears this trend has reemerged. The ProfitWell B2B SaaS New Index averaged 1.62 between May 23 and June 22. This was a 6% decrease from its previous average reading of 1.72 between April 23 and May 22, a shift that is noteworthy but not yet significant enough to signal a possible trend. [Zoomed B2B Index-New, 20210622-20230622](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgLKgW5mR-f01hz0MjW5khvld8wTT62W7RhqrB7jQz2fW2njvJQ2C3Gm-W8mgSLy7xY928W2htCmf80RBRTW3R88yT20sqX7W7ZSgsK5NKZCpW3g77cr8j_2p9W97QWDq1BWYs8W2tnd349hTVVmW3f6jtS2f_zXXN1BCZyqnhYJKW3fNczX1Dv15DW4PkBXF5SRnXnW9hLPmb4yghx-W2r8-HC48-q32W1p6B8Q4R5wGnW6DBPB-407YypW5SV1Qc1DX7x1W1jH8wV2WP5Q5W1K68XP30htB3W20bj4736MzFzN67Rz7pJWh_rW88MChQ6S5LysW8gBllq1j2zt6N8SSWvLKx76dW99JcR63TXC35W9j7XwG2mb7XxW6x1kGK6CvjXN33331) The ProfitWell B2B SaaS Churn Index averaged -1.74 between May 23 and June 22, a 5% decrease from its average reading of -1.83 the previous month. While this is an improvement, these are still historically poor retention levels overall. These recent churn rates are 9.6% higher than the same period last year. The average churn index reading for Q2 2023 is the worst on record going back to 2019, at -1.80 (compared to -1.73 for Q1, and -1.72 for Q4 2022). [Zoomed B2B Index-Churn, 20210622-20230622](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgTL_N2RLCyqX1j3ZW1fNhj_73KW0sW2Z2QnR8CwvWFVv0rvd4JM3lNW1x-S5h4Ml9L3W7Cvwtz1TPVQVW6HyCkk44RM5BW8nfg1c2yTvVQN2M4f2rQWdX9W6NFtCh21gWM8W3J04H91Tj5wNW4z5fGc2CMZ1FW6VFgFK7jPW41W4VqrR87t-bcDW1fpQj28BFh-cW2czwtg7b5d-LW8W-TfZ94Sy3KW4TzTc73Frx-gW6KyLsl1wmfNpW6pS2hV3QDVlGW7D3l9H3nYnG3W5hF3Pw7bjf9hW1lJk9g82gMK0W2_gQwv4qRx-pW2mnd4l1sT-k7N7CjWT3R1CHCW77jPQZ1PGrqPW2qC_Cv3z1gVsW6gmXPG5v_NGFW1mR7HN8gBCpL3hVP1) Is this a new normal for SaaS after the pandemic? It’ll take a few months of data to determine if this slower revenue growth constitutes a “new normal”, or if the market will continue to see some major shifts in the coming months. Still, even adjusting for inflation, it’s notable that a 10-11% annual growth rate is much faster than the [US economy’s 2% GDP growth](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVm5nKwhV3Zsc37CgRTzW1F41ts5NRGTDW7M57416NQxY1VlW0hj3q0KCPW2HH4df5QkWm3W5ysLcD3KyljPW3TCxRv3c-zRcW1rX1Km89N-BkW3sNZlr34Y189N8-kRk054LjzW68Zx3r1448-1W2LDDZX4ysDZXW8BRW3P6Y2BrXW530s6z2y_hT4W30LTT95TH-wNW7DwQB93kMLPcTjBTd1v1M2sW10MJ9v9c1_58W6-Sgqg6ngRHFW6M4pFs6ZlgQKW71_6rY57CP6gW8tYMYn6sKkq1W8yg5R39k35pXVXF4nW4GtpM1W62273h2kv8ryVCKdrc8mSQDkN4m78TYTgvCFW5X-fyX2f3ZM8W6MhcwV64CJllW1DcB-G58L1wGW3wk8ty4sjkvdW7JL1g-35qWMyM9qvPHXV5PNW1kp_D74sRHj_W1QnPJ67mTf1cN70-R769Q4FkN3fwbYWc4d16W2rlyM27fv9vXMc1mkydDzYzW6PLlCC61LBv2W8Qxt8_6jx6Zh3mYl1) in Q1. So while the macro environment in SaaS feels much cooler than before, it’s certainly still healthier than in many other sectors — and especially in B2C Software. While many pandemic-era consumer tech trends have been rolled back, changes to the way we work have stuck. SaaS revenue continues to grow even after the 2021-2022 acceleration. The industry is in a period of “normalization”, not so much a correction. Growth opportunities still abound, but new sales will be tougher to earn than during the pandemic. Churn will be more pervasive than before, as customers are increasingly scrutinizing expenses and have many more options to choose from. This period will still reward B2B companies that seek to grow, but strategic and operational discipline are now also critical. [READ THE FULL REPORT](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlWf3q90_V1-WJV7CgJXyW74C8RK7FX4NBW7RlmbL86fKRSN5qpG46FbVQGW2LmVgr7W8129W5gJYYq6TsDFZW8zB40h1Ss-2QW4P1TMX1hB6RlN43tTlF5qQsfW65GKwY8kKz2PW52yWX_2ns-XDW2c-5316jYvRWW5Wgl3J4tRf-gW7mkKT9245tR0W4CB0Q-80xzZsVXk81s4VlFv_N14TvSbyxJZkV110Z830h7RvW82q4KQ4Cz2s3W55Fxwk99MPwLMrvl8R55tLRN4YJRqHhjg_3VrHyQT1Dh0yvW9j79S26M2GpzW1kb_TQ3SgB31W27sG2h55fN5PW44RVT25Bp_dKN7P76DwyJT3HW32Fnzv8J-xQVW1NW-Gg6BGxY2W2DFtZT8FWxfW3fLx1) You're receiving this market data because you signed up for [ProfitWell Metrics by Paddle](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgVPlW78KG4G8K9X9pW4Q4GZQ6js1cxN6v_Rwnvl1ThW168gSz65QKF6W4Yk8hV7-tnY1W42Kyb65gc6DZVrLNzq3WGV2XW8V_mcF76vtN-W68ly1T4JYK89W1pkvdK2Hcn9yW4RFgFt3Ff43NW3xypMr8q_gxDW6JlsZM4lJbJpW8BxYx26vv1WCW14XR9c230vD_W6SSWj01QDF4YW1BY_R41PmngrW7BLWfn6HHWXgN2DsYnfzmFXwW78v0cx4_rs1qW1LBF067wqcCfW7F6m5W9bWGqtVFJW9_2w4j18W6-jhc51p7F4yVjkTqZ104NyzW3kfWcY2LCHY53dGf1). [PW-Metrics-Paddle-Logo-White](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgJCYV4bwZj7McmTMW7CKXrn3LqHClW1Y9WD92kRkh5N5PFBSpk9slLW4C9Tw36b7l3FW5hnhRG7znkVzVsfJ-t5J1T4LW2mYctW8zBKCZW5Fw-Zr1SBvBGW6sfs9F5QMwlyVx3YGr2psskxVvFrXJ8rmfmyW4mW-LT9hXDf0W4tK3fy6ydD_vW78xMV05SFW5SVlSm4n7LX9ZmW1qV_8c2LjfHHW62PGM84ZmxyVW5Gl0qX4j35p2W5fBN2Z7-6wTMVrN0W-20ZFcYW4p_qQJ9h87PvW7Z9csC72dp6yW5_hwTb5DdGQnN5hQ58b17BStW1BfRZ65P6gZ83b1R1) Connect with us: [ico_fb_10_sep_2020](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgTK1N54gHX3KcntwW35S8t71kJsclW4FdP2C8HwCs_W7y0Yyq6WtlxLW92nx0S2McQVLW532YHq843WqxW8v68B58dbXZcW8TPYQv8hYhXQN648tTzBG9rcW5mxKc_3f-JX5W2fY9HM3DTbQtW73nH5t8HqNQrVCtbWf8Wq3QlW34Jk4v93NNhtW3JZWRX79zf6rVMpbf29dvPyvW5TczLC3Fm1T5VjgWc54x7WTcVVC_7H1fz9HBN82sNqD6qVVXW2S1Qh02JpPzlW18FpKB38sd-4W5Z1jFf5r6nZWW6ZrfVx4LXPwZW3f-wVH3mW5rwN8yLpVhcx5BR3hzR1) [ico_tw_10_sep_2020](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVm3q905V1-WJV7CgZmNW7FDqV61VLqmWW8HssBj2-NSFHN3pFgCWgpPXMW1HbJFg1BsfxHW4Jl79V8Jx70VW4jt9cN2v8QR9W8G2QvL976JJ3W5jG3RJ4GSCfDN6MRkc8myktJVTwtBF1C04PYW6vXKBb7Gfc3NW1Zq34H8cT8g5N4WPFssy5TZ8W2gz-Ql52jnZ_W7RbfyV8bc5l3W3GzG7_6rFT2dW47Q27m32bTWpW4n5Ccy6yMp0lW1tpLLq5zk6pgV2GqrR8Xf5DwW2_MVlW7TfMkgW7XZv_v2fJNh8W7Wkzdm8PW7r2W6zQ9s52yTV7-3lzm1) [ico_in_10_sep_2020](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgNqVN808BGylBKN6W7mJrh44rmGt6VFLtR57jZCGqW5Rbwvx82yLpJW10-X-P5Y7cm5W9gb77N8MyhRxW58mncS16mbNnW8k9BxX84lF4xW7xlrWg4cHcy5W3PvHBN39T3HqW90S_z06-MR3QW5l-bzl8nyB7kW3kR5zK7VFSW2M4hqxk9d4h4TPgZH1FPRT9W7rVwJc3xhCYGN1k14vj1vRb_VRqg7k3RJ3W0VsmpZJ5hvdzMW5Sgm8M6bqLt3W7__krS15nBD3W1W7q_04lVFkWW6cskgf6Bbl-YVFZggm2gYRYXW27908d3FMn9_W4HMmvJ1R-rNJ3m2j1) [ico_ln_10_sep_2020](113/bNfN04/VWcqmY5Tv-3SVsYmGy53LLmrV7Wb0N51xnxwMLtlVG3q90pV1-WJV7CgPxYW2jsBTW1NZDTXW4fQ8_b482QdWW44qjj64JXhqBN64pH-WDV8YNN2lrJwkZTXxBN7CzJkQknVcvW3NPHqk7GM1n4W2S9ztQ82GTVhW7vvQ1z5NYRjrW4_5h1P2w58bxW82DGHP7_bVQcW1CQgMP4ttSPhW4JGgKK54ZXJBW4J7YpT5T1MFbW8bTNzy6lMV3ZW9h30Xm1KNhhcW2xB_5W7l9ttXW5tV9Zy49SXVZW6wfWRz6JjhFcW5GpXZv3Txm2RW66jntQ7n5vKlW50KM6r1B3JQ1W4HQSxZ59xZJ7W1mgRN11WY8B3W68rT6B5ld_84N9fj9ybpJLx03g4P1) This message was sent to [{EMAIL}](#) [Manage your email preferences here](. ProfitWell by Paddle 109 Kingston St, Boston, MA 02111 [unsubscribe]( You received this email because you are subscribed to Free Content from ProfitWell. If you prefer not to receive emails from ProfitWell you may [unsubscribe]( or set your [email preferences](. ProfitWell Office Location 2 ProfitWell 109 Kingston St Boston MA 02111 USA You received this email because you are subscribed to Free Content from ProfitWell.