Since early 2022, small privately held B2B startup firms have turned around COVID-era losses to regular revenue gains, Maxio Institute present in a recent study of greater than 2,400 small B2B firms.
“These smaller startups at the moment are outpacing the remaining,” the report says. “Having found ways to grow despite significant headwinds, they could represent among the most promising firms of the following decade.”
It adds, “This trend was also observed following the 2008 financial crisis, when industry leaders equivalent to Asana, Square, Uber, and Venmo were founded.”
Maxio Institute is the research arm of Maxio, a provider of a billing and financial operations technology for privately held B2B firms. It describes its technology platform as designed “to satisfy the unique challenges of B2B SaaS and recurring-revenue businesses.”
Maxio cites consistent post-COVID growth rate
“The post-COVID B2B market is continuous to grow,” Maxio says in its “B2B Growth Report: Private Company Benchmarks & Evaluation.” “Q2 was a rather slower quarter than Q1, but viewing the trend across the last 10 quarters shows a remarkably consistent growth rate. The common growth rate for B2B firms because the starting of 2022 is 17%, exactly equal to this quarter’s result.”
It adds, “While this growth trajectory has been the norm at smaller B2B firms, it could be the envy of many larger, public firms. The members of the S&P 500, for instance, have a mean revenue growth rate of 6.9% during the last 5 years and are projected to grow by 5.5% in 2024.”
The report found that B2B firms “are spending on infrastructure, equivalent to logistics and provide chain technology, which experienced a 36% annualized growth rate in Q2. Other essentials like cybersecurity and healthcare are also booming this 12 months, with 36% and 26% Q2 growth rates, respectively.”
The report analyzes anonymized billing data from greater than 2,400 Maxio customers, nearly 60% of that are SaaS firms. Maxio says the report offers “a comprehensive take a look at growth rates, pricing strategies, invoice characteristics, and industry trends.”
It notes that the report’s data set represents roughly 5% of the worldwide SaaS market, “offering a brand new perspective on market performance beyond the often-highlighted 140 publicly traded B2B SaaS firms.”
Maxio reports growth for ecommerce software firms
Amongst B2B software firms, those who Maxio included within the “ecommerce and retail technology” category grew 11% within the second quarter of this 12 months and a mean of seven% during the last eight quarters.
The five software company categories with the most important percentage revenue gains for Q2 2024 and averaging during the last eight quarters:
⦁ Cybersecurity: 36%, 28%.
⦁ Transportation, logistics, supply chain technology, 36%, 17%.
⦁ Restaurant, hospitality, and leisure technology, 26%, 16%.
⦁ Developer and engineering technology, 26%, 41%.
⦁ FinTech, 25%, 28%.
The report’s other findings discuss with the roles of fixed-rate and usage-based pricing models and trends in AI and cybersecurity:
- Fixed-rate pricing models, as in comparison with usage-based pricing, outperform at smaller businesses with revenue under $1 million. With fixed-based pricing, “these firms profit from the predictability of set contracts and grow not less than twice as fast as their usage-based peers,” the report says.
However it adds, “Once firms hit $10 million in revenue, the trend is reversed, with those who embrace usage-based pricing growing nearly twice as fast as those who keep on with a fixed-rate model.”
- Revenue growth at B2B AI firms has slowed since its peak of fifty% in the primary quarter of 2022. “In 2023 and 2024, they grew at a mean annualized rate of 21%, aligning more closely with overall B2B market trends,” the report says. “This slowdown could also be partially resulting from the increasing capabilities of foundational AI models, like OpenAI and Anthropic, which make some smaller AI firms obsolete. Smaller AI firms are being forced to search out their very own area of interest or risk becoming just one feature in a bigger model.
- Cybersecurity is the fastest-growing industry tracked over the past two years, with a mean annual growth rate of 35%. “Fueled by significant investments in 2021 and the continuing must combat rising ransomware and phishing scams, that are further intensified by AI-generated content, the distinguished role of cybersecurity is predicted to persist resulting from ongoing digitization and AI expansion,” the report says.
Maxio, formerly generally known as Chargify and SaaSOptics, is backed by Battery Ventures. Maxio says it processes greater than $16 billion in annual revenue for its greater than 2,400 customers.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
Enroll
Enroll for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week. It covers technology and business trends within the growing B2B ecommerce industry. Contact Mark Brohan, senior vp of B2B and Market Research, at [email protected]. Follow him on Twitter @markbrohan. Follow us on LinkedIn, Twitter, Facebook and YouTube
