Enterprise vs SMB in SaaS

Sammy Abdullah
2 min readOct 23, 2023

Investors always push their B2B portfolio companies to focus on enterprise accounts. They tend to be stickier, can pay more, upgrade more frequently, and can sign multi-year contracts. On the flip side, the sales cycle is longer and acquisition cost is higher. Do you need to be enterprise focused in order to achieve a great exit? The answer is no. Below are the last 74 SaaS IPO’s and the approximate contract values of their customers.

Median and average. The median contract value is $49k and the average is $231k. Palantir and C3 really skew the data as they have average contract values of $5.9mm and $2.4mm respectively. The median of $49k is thoroughly enterprise, however as you’ll see below, there are plenty of SMB focused firms.

67% are enterprise. We were able to determine SMB or enterprise status of 70 of the companies. We define SMB as any customer paying less than $12k annually. Of the 70 companies, 47 are enterprise focused (67%) and 23 are SMB focused (33%). The data shows that while it may be very attractive to go after enterprise clients, it’s not a pre-requisite to have a great exit.

Thank you for your readership. Visit us at blossomstreetventures.com for more SaaS metrics.

--

--