I’ve cancelled more software subscriptions this past year than ever before. Same story in my group chats. This feels like a canary in a coal mine: according to this BetterCloud report, 90% of enterprises now say software consolidation is a priority.
It makes sense. Why piece together hundreds of software subscriptions when AI can help pull from a unified database and build custom apps and workflows that fits you and your own?
This is a massive market to disrupt. Enterprises in the US spend over $8,700 annually per employee, with a staggering 51% of licenses that goes unused.
We’re starting to see the first decline of SaaS subscriptions in a decade, with an average of 18% decline for enterprises, and 28% decline for mid-sized businesses.
As a venture investor, the question I keep coming back to: what happens to the massive valuations handed out during SaaS’s heyday?
The “unicorn backlog” estimates 412 enterprise startups valued at over $1b that are still private, and haven’t raised any capital in 18 months. Around half of the $5B+ unicorns (106 of them) carry peak market valuations from 2021 and 2022.