Unveiling the 2023 SaaS Funding Napkin
1. Enter the 2023 SaaS Funding Napkin
At SaaStr’s annual conference, Christoph Janz introduced the 2023 version of the "funding napkin", his visual summary of what SaaS investors expect from startups this year. Investors are increasingly torn between valuing hyper growth and fierce capital efficiency, and almost every pitch now needs a credible AI angle.
2. Funding activity has cooled, but not collapsed
Compared to 2020 and 2021, SaaS funding levels are down significantly. But as of 2023, they’re still on par with 2019, better than feared, but a reminder that the boom days are over.
- Series B/C rounds and total capital invested have declined by 50–75%
- Still, it’s far from the fundraising winter of 2008
3. Pre Seed, Seed, Series A benchmarks
Point Nine’s data shows how expectations have shifted:
- Pre Seed: Round sizes around $1.5 M, with valuations between $5–10 M
- Seed: Rounds typically raise $4–5 M at pre money valuations of $10–20 M. Half of the companies had no recurring revenue, the others ranged between several hundred thousand to $1–1.5 M ARR
Series A: Round sizes now range between $5–15 M, with valuations between $20–60 M. Most companies raising A rounds are in the $1–5 M ARR range, even higher than in previous years
4. What matters most to investors right now
Investors highlighted the following as increasingly critical:
- Capital efficiency, by far the top concern
- Valuation discipline, getting it right matters more than ever
- AI strategy, about half of investors expect to hear one in every pitch
5. A Napkin for Your Fundraising Journey
The 2023 napkin isn’t just a data snapshot, it’s a compass:
- It helps calibrate expectations, for example target ARR and valuation benchmarks
- It reinforces that efficiency trumps blind scaling
- It signals that having a coherent, realistic AI ambition can set you apart
In a Nutshell
Fundraising in 2023 isn’t about chasing the highest multiples, it’s about meeting investors with clarity, efficiency, and ambition. If you're raising a pre seed, seed, or Series A in SaaS, understanding today's metrics and showing mastery in capital usage, and a smart AI strategy, are key to standing out.
Explore the full topic on https://medium.com/point-nine-news/what-does-it-take-to-raise-capital-in-saas-in-2023-56d8f617714
