New Capchase Survey Exposes Trends in SaaS Sales: Decreasing Average Contract Value and Lengthening Sales Cycles

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Sep 06, 2023, 11:00 ET

NEW YORK, Sept. 6, 2023 /PRNewswire/ -- Capchase, the revenue acceleration platform for Software-as-a-Service (SaaS) companies, today revealed the findings from its new report, B2B SaaS Sales Cycles in 2023: New Insights and Data. The report combines data from a OnePoll survey of 500 U.S. SaaS leaders commissioned by Capchase with data from more than 1,200 SaaS companies from the company's underwriting process. The findings indicate the industry has shifted to longer sales cycles, more scrutiny in the buyer process, and a decline in average contract value.

The current macroeconomic climate has resulted in more SaaS companies tightening budgets and, as a result, decision-makers are taking more time to review contracts, secure approval, and close deals. On the other hand, SaaS vendors have been forced to discount contracts in order to present buyers with enticing terms and expedite closures.

Top takeaways from the B2B SaaS Sales Cycles in 2023: New Insights and Data report include:

Lengthening of Sales Cycles
○ 66% of respondents said sales cycles have lengthened compared to January-June of 2022

42% of respondents reported cycles are 2-3 weeks longer.
35% of respondents reported cycles are 4-5 weeks longer.
The average CAC payback period has increased by 150%.

Decline in Average Contract Value Growth

23.2% of respondents reported that their ACV has stagnated.
8.2% of respondents reported a decline in ACV.
81.6% of respondents currently offer discounts to encourage prospects to sign up for annual contracts, with the average discount offered being 18.4%.
42% of companies saw a decline in ARPU.

Need for Flexible Payment Terms

85% of survey respondents believe offering existing customers more flexible payment options could reduce churn.
47% of respondents believe that not being able to offer customers more flexible payment options prevents deals from closing.
Companies with flexible payment options can generate up to $100,000 in MRR per $1M in CAC spend compared to companies with rigid payment options.

Capchase recently launched Capchase Pay, a buy now, pay later sales enablement solution for SaaS vendors to address this growing trend.

Capchase Pay allows SaaS companies to collect the full contract value for their solutions while providing their customers with flexible terms like monthly or quarterly payments. Early customers have experienced a 300% increase in sales velocity, an 80% increase in lifetime value, and a 20% annual contract value increase.

"These survey results reflect the growing sentiment we've been hearing from our customers. SaaS sales teams are facing friction when closing deals and inflexible payment terms are hurting conversions, " said Miguel Fernandez, co-founder and CEO of Capchase. "A powerful remedy to overcome hesitancy is to offer a buy now, pay later option to help buyers easily plan for ongoing costs."

"Pay has become an instrumental part of our sales cycle: we can close deals faster without having to provide discounts," said Sachin Dev Duggal, CEO at Builder.ai. "Our sales team's happy because they can hit their numbers, finance is happy because they don't need to deal with long collection cycles, and, most importantly, our customers are happy because they can pay on their terms."

In addition to its Capchase Pay product, Capchase also offers Capchase Grow, a non-dilutive financing solution to help SaaS founders build without losing stake in the company. Since launching in 2020, Capchase has raised nearly $1 billion in venture and debt financing, and has announced partnerships with AWS, Xero and Stripe.

Capchase operates globally and can deploy non-dilutive capital in ten countries across North America and Europe with further expansion plans. To get started with Capchase, please visit www.capchase.com.

Survey Methodology
These results were conducted by market research company, OnePoll, from April 11-April 19, 2023. The poll surveyed 500 employed Americans who are decision-makers and/or leaders in finance, sales, or marketing for B2B or SaaS companies across the United States.

Capchase's proprietary data used to support these claims was collected from the underwriting process of 1,267 SaaS companies. The data has been split into a pre-downturn cohort of 471 companies that were underwritten between January 2021 and June 2022 and a post-downturn cohort of 796 companies that were underwritten between June 2022 and June 2023.

These companies have also been segmented into top-performing, median, and bottom-performing quartiles based on R40 performance. Top- quartile companies are in the top 25% in R40, indicating they are best positioned for long-term growth and success.

About Capchase
Capchase is the leading provider of non-dilutive financing products to software-as-a-service (SaaS) and comparable recurring-revenue companies. Our mission is to help founders grow their businesses faster through non-dilutive capital, market insights, and community support. Founded in 2020 and headquartered in New York City, Capchase provides financing by bringing future expected cash flows to the present day – thereby securing funding that is fast, flexible, and doesn't dilute their ownership. To date, Capchase has worked with over 4,000 businesses and partners, and made more than $2 billion in funding available to the SaaS industry. To learn more about Capchase visit capchase.com.

SOURCE Capchase