Bessemer Venture Partners was the first to take notice and start tracking the results of SaaS with their Cloud Index. They started the index in 2011 and started publishing it publicly in 2013.
Just for fun, I added a trend line so you can see how things have gone for the index since 2011. Pretty good right? You would have made a 520% return over the past seven and a half years! That’s average growth of over 25% annually!! That is better then almost all venture fund returns for the same period of time.
Do you think this trend can continue? Or is seven years of performance a fluke? My money is on this still being the early innings and that we have many more years to come of great performance out of SaaS companies. The transition from licensed software to SaaS has a long ways to go, especially when you consider how it’s just been in the past couple years that the enterprise started embracing the cloud and not just talking about it.
Your favorite trend line sketcher
P.S. Did you notice how the Bessemer Index performed against the NASDAQ and S&P500?
P.P.S Do you think about the rising multiples…