For the past decade, the SaaS world lived by a simple mantra: grow as fast as you can, raise the next round, repeat.
But in 2025, that model no longer works and it’s not coming back anytime soon. Across the SaaS market, we’re seeing something very clear: The tradeoff between efficiency and growth isn’t just tighter. It’s fundamentally different.
Let’s explore why and what smart SaaS leadership teams are doing about it.
What changed?
For years, SaaS was dominated by “growth at all costs” thinking:
- Capital was cheap
- Boards wanted ARR growth above all
- Public markets rewarded top-line over profitability
- Teams were told: landgrab first, figure out efficiency later
Then everything shifted and kept shifting. By mid-2025:
- Cost of capital remains high
- Public multiples now reward efficiency and sustainable margins
- Investors prioritise burn multiple, CAC payback, and NRR
- Sales cycles stay stretched slowing “easy” growth
In other words: the old “just grow” playbook is broken. Now, efficiency and growth have to co-exist and reinforce each other.
Why “efficient growth” isn’t just the new buzzword
Some SaaS leadership teams are still treating “efficient growth” as a temporary fashion, a metric to report in board decks, but not a real operational shift.
The best operators know it’s deeper than that.
Here’s what’s really different in 2025:
1. Capital markets have fundamentally repriced risk
Easy money isn’t returning soon. Burn >2.0 isn’t accepted anymore.
2. Buyers are more selective
SaaS buyers are taking longer to commit. GTM machines that are bloated or misaligned burn cash faster than they convert pipeline.
3. Equity rounds are smaller and harder to close
Many founders raising in 2025 are seeing terms that assume they’ll run leaner, for longer.
4. Talent costs are still high
Hiring without clear GTM signals can drain the runway quickly.
In short, you can’t out-raise inefficiency anymore. You can only operate better.
How the best SaaS teams are approaching efficiency vs growth
Here’s what we’re seeing from SaaS leadership teams getting this right:
1. Growth targets are calibrated to capital runway not just market TAM
It’s no longer: “let’s 2x ARR because the board expects it.”It’s: “let’s grow at a rate we can sustain and finance with the right capital mix.”
2. GTM spend is reviewed against live pipeline velocity
Teams aren’t running fixed marketing budgets anymore. Spend flexes with pipeline and conversion trends.3. NRR is driving the growth narrative
Top SaaS companies are leading board updates with NRR and net retention efficiency, not just new logo growth.
4. Burn multiple is a headline KPI
If you can’t show progress here (below 1.5 for most European SaaS companies), the market will quickly discount you.
The path forward for 2026
Here’s what we believe:
In the old world, growth drove efficiency.
In this new cycle, efficiency enables growth, and protects it.
SaaS leadership teams that operationalise this mindset will:
✔️ Preserve capital optionality
✔️ Stay attractive to top investors
✔️ Weather slower buying cycles
✔️ Create space to invest when competitors can’t
The “growth vs efficiency” conversation isn’t just about this quarter’s board deck. It’s about the kind of company you want to build in 2026 and beyond.
