5 Interesting Learnings from HashiCorp at $400,000,000 in ARR; Plus Weekly SaaS News and Updates

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Hey SaaStr Community,

With times much tougher in the venture and public markets, you’ll see a lot more talk about tougher “terms” in VC rounds, especially later rounds.

Early-stage investors, especially, will complain about all these terms. They force founders and earlier-stage investors to take more risk than a nice, clean unicorn round at a clean price.

But here’s the thing — almost all these terms, in the end, are just about price. Price is … what it is in a venture round in the end. You might want it to be higher, but in the end, it’s what clears. And sometimes, more of these terms make it easier for a price to clear.

The Only Truly Terrible Venture Term is a Tranche

READ MORE

5 INTERESTING LEARNINGS FROM HASHICORP AT $400,000,000 IN ARR

Fewer Cloud devops / commercial open source startups were more respected pre-IPO than HashiCorp — and still are. The product is there, the market is strong, the founders and CEO are great. At an almost $6B market cap, it’s a huge win, with a strong multiple at $400m ARR, growing a stunning 51%.

It was a $10B-$15B+ company in the go-go times of 2021, and even though it’s executed to perfection since then, the markets have caught up even to the best of us. A $6B valuation today sure seems cheap with those numbers, and the ones below. Because almost everything is going so very, very well for HashiCorp.

Most especially, it’s executing with an enviable SaaS Golden Ratio. It’s closing new customers even faster (86%) than its ARR is growing (51%). That, combined with high NRR, is a recipe for many years of high growth.

THE LEARNINGS

This edition of the SaaStr weekly is sponsored in part by Laika

IN THE END, THE “COVID BOOST” IN SAAS WAS A BUST

Almost every category of SaaS exploded during the lockdown, but three saw just crazy boosts, and their stock prices went on a tear. We’d never seen revenue acceleration like this ever in B2B software.

But it didn’t last. It couldn’t last. In fact, the top "Covid beneficiaries" were clear in their public announcements that the Covid boost was already over by the end of 2020.

Other categories were hit less dramatically. But one has to wonder if so many SaaS leaders would have been better off without a Covid Boost at all. It merely created a disruptive blip in revenue in many cases.

A CLOSER LOOK

This edition of the SaaStr weekly is sponsored in part by OnBoard

Q&A: WHAT WAS THE BEST ADVICE YOU EVER GOT FROM AN ANGEL INVESTOR?

I got my best advice when I went to meet with one of my angels and mentors when things were probably toughest at my last start-up.

My co-founder had walked out the door. We had about 4 months left of cash. I was out of ideas. Yes, we had customers — hundreds — but not nearly enough. It simply “wasn’t working”, at least as I saw it narrowly at the time.

THE ANSWER

VIDEO OF THE WEEK: 16 WAYS TO LEVEL UP IN 2022 WITH SAASTR FOUNDER AND CEO JASON LEMKIN

We’ve recently been posting polls on SaaStr’s LinkedIn account to get a feel for what SaaS companies are doing in the current environment. At SaaStr Europa, Jason did a deeper dive into 16 of the surveys. In this video, he discusses the results and where he thinks SaaS companies are on track or need improvement.

WATCH NOW

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