I'm chief analyst here at PeerSignal and CEO/co-founder of Keyplay. Join 17K+ B2B SaaS leaders who study modern GTM with my almost-weekly newsletter.
Thank you for being one of the first 14,278 members and supporting PeerSignal research! Welcome back to my almost-weekly newsletter where Camille and I share B2B SaaS data and examples.
In this report, we used Keyplay's 🆕 Growth Signals to analyze funding, hiring, and headcount growth data for 17.5K VC-backed companies and compare B2B SaaS and PLG.
🔑 ▶️ If you want to build account lists like Florin or enrich your CRM with these signals, shoot me a reply here.
In 2021, venture capital was doubling down on a growth at all costs mindset.
In early 2023, we see two dominant narratives: less VC funding and more tech layoffs.
But we know that big tech cuts, multiple compression, and correction is only half the story.
TL;DR
Despite six percent staff cuts now feeling commonplace in tech, our PeerSignal data shows more VC-backed companies are increasing headcount than decreasing it at all stages, about 60/40 overall.
Funding recency plays a huge role in recruiting, but even companies with relatively fresh funding are not necessarily subscribing to a “grow like crazy” mindset.
Even companies with funding rounds in the past six months are making cuts. Startups last funded one to two years ago saw the most headcount decreases in the past three months. This matches up with the recent market shift – companies funded in ‘21 and early ‘22 were most likely to subscribe to the growth at all costs model with rapid headcount ramp. As the climate changed, so did run rate. Many were forced to course correct by cutting budget and staff.
Funding takeaways:
We looked at headcount change in 4 buckets:
1. Big cuts (-10 or lower)
2. High growth (10%+ or high)
3. Any cut (<0%)
4 Any increase (>0%)
For this we took out smaller companies with <10M in funding where small changes distort percentages.
B2B SaaS leans a bit more negative, but follows a similar shape. Within B2B SaaS, 55% increased headcount in the last three months compared to 45% decreasing headcount in the same window (compared to the 60/40 ratio in overall VC-backed). Even on the extreme ends – 10% headcount changes in either direction – more companies saw 10% increases than decreases in the past three months.
Still more companies increasing headcount over the last three months – the worst layoff stretch for B2B SaaS in years – than decreasing. The 1K community submissions to our StillHiring.today supports this narrative – demand for B2B tech talent is still strong in places. 18 months ago we could assume that every VC-back SaaS companies was investing, growing, and hiring. The growth stories are still there, but they aren’t everywhere.
Software spending is expected to grow 9.3% from last year.
According to Gartner, that means 2023 SaaS spending is expected to increase from last year but decrease from 2021. Considering 2021 was a SaaS spending anomaly in many ways, Gartner’s data suggests B2B software spend will bounce back after just a down few quarters.
We found 867 B2B SaaS companies in our index, ~13% of the total VC-backed B2B SaaS companies, that raised funding in the past six months, during the large tech layoff waves. Here are some that stood out to us:
Drata: Raised a jaw-dropping $200M Series C in December, just a month after Twitter, Meta, and Amazon announced mass layoffs.
Coupa: In December, the spend management company announced its agreement to be acquired by Thoma Bravo for $8B. A huge deal considering the climate. Unsurprisingly, procurement software Tropic and Vendr also raised rounds in 2022.
Keyplay: No bias, of course. :) Our SaaS company (which powers our PeerSignal research) announced a $3M seed round in December to help GTM teams adjust to the new return to rigor era with better account signals and automatically refreshed lists.
Jasper: Another AI darling, AI content platform Jasper raised $125M at a $1.5B valuation last Oct, impressive given the recent correction in valuations. The sheer amount felt reminiscent of 2021 deals.
Next week, we'll dive deeper into PLG growth and other intriguing funding, acquisition, and hiring trends in emerging B2B markets.
Have more questions or feedback? Reply or join the conversation on LinkedIn.
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Best,
Adam & Camille
I'm chief analyst here at PeerSignal and CEO/co-founder of Keyplay. Join 17K+ B2B SaaS leaders who study modern GTM with my almost-weekly newsletter.
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