In the fast-paced world of SaaS, securing funding isn’t just about having a great product but also proving you’ve got the metrics to back it up. As we dive into 2025, the landscape has shifted. Investors and lenders aren’t just looking at surface-level numbers, they’re digging deep into your data. Let’s break down the KPIs for making or breaking funding decisions and why they matter more than ever.
The heavy hitters: KPIs that make investors and lenders sit down and listen
1. The Rule of 40: Balancing growth and profitability
In a world where “growth at all costs” is no longer the golden ticket, the Rule of 40 has become the north star for SaaS companies.
Benchmarks:
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Needs Attention: < 10%
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Ok: 10-40%
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Fantastic: > 40%
The inside scoop:
While hitting 40% is the dream, even reaching 20% puts you in a strong position. It shows you’re not just chasing revenue at the expense of burning cash. In 2025, with economic uncertainties still lingering, investors are all about sustainable growth. A company that can balance growth and profitability is like gold dust.
Pro tip:
If you’re below 10%, improve your growth rate or profit margin, whichever gives you the quickest win. Sometimes, cutting costs is more straightforward than accelerating growth in a saturated market.
2. Churn Rate: The silent killer or your biggest ally
In the subscription economy, churn is the boogeyman that keeps SaaS founders up at night.
Benchmarks:
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Needs attention: > 15%
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Ok: 10-15%
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Fantastic: < 10%
The inside scoop:
A low churn rate is like a love letter to investors. It says, “Our customers stick around because we’re awesome.” But here’s the kicker - in 2025, smart investors are looking beyond the number. They want to know about your churn recovery strategies and how you’re turning churned customers into opportunities for growth.
Pro tip:
Implement a “churn autopsy” process. For every customer that leaves, dive deep into why. Use these insights to create a churn prevention playbook that evolves with your business.
3. ARR Growth: The heartbeat of your SaaS
Annual Recurring Revenue growth is the pulse of your business. It’s not just about how fast you’re growing, it’s about the quality of that growth.
Benchmarks:
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Needs attention: < 10%
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Ok: 10-30%
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Fantastic: > 30%
The inside scoop:
In 2025, with AI and automation becoming ubiquitous, a 30%+ ARR growth rate tells investors you’re not just riding the tech wave, you’re surfing it like a pro. But beware: investors are getting savvy about distinguishing between “good” ARR - driven by strong retention and real demand, and “questionable” ARR, which relies on discounts, one-time deals, or unsustainable expansion.
Pro tip:
Break down your ARR growth by customer segment, product line, and acquisition channel. This granular view helps you identify your real growth engines and potential red flags.
The supporting cast: KPIs that round out your story
While the headliners above are crucial, these supporting KPIs can turn a good funding pitch into a great one.
4. Gross margin: The foundation of scalability
Benchmarks:
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Needs attention: < 70%
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Ok: 70-80%
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Fantastic: > 80%
The inside scoop:
In 2025, with cloud costs optimized and AI enhancing efficiency, gross margins are expected to be higher than ever. A high gross margin isn’t just about profitability, it’s about the potential for reinvestment and growth.
Pro tip: Look beyond traditional cost-cutting. Explore AI-driven solutions for customer support or cloud cost optimization tools to boost your margins without sacrificing quality.
5. Net Working Capital (NWC): Your financial safety net
Benchmarks:
The inside scoop:
Positive NWC is like having a financial airbag. It shows investors you can weather storms and seize opportunities without scrambling for cash.
Pro tip:
Implement a rolling NWC forecast. This dynamic view helps you anticipate cash crunches and surpluses, allowing for more strategic financial planning.
6. Net Burn Rate: The runway reality check
Benchmarks:
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Needs attention: < -75%
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Ok: -30% to -75%
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Fantastic: > -30%
The inside scoop:
In 2025, with the memory of past market volatilities still fresh, a lower burn rate is more attractive than ever. It’s not just about survival, it’s about having the runway to make strategic decisions rather than desperate ones.
Pro tip:
Create a “burn rate budget” for each department. This accountability at the micro-level can lead to more mindful spending and innovative cost-saving solutions across the board.
Your 360° KPI overview
This table gives you a straightforward view of your key KPIs. It helps you see where you're doing well, where you need to improve, and how to strengthen your position for funding.
Wrapping it up: The art of KPI storytelling
KPIs aren’t just numbers—they’re the plot points of your company’s story. As you seek funding from Float or other lenders or investors in 2025, think about how these metrics showcase resilience, growth, and smart decision-making.
Great founders don’t just report KPIs; they use them to craft a compelling narrative of past wins, present momentum, and future potential. Each metric reflects a strategic choice, working together toward a bigger vision.
At the end of the day, hitting benchmarks is just the baseline. The real game-changer? Showing investors you don’t just track the numbers - you know how to make them work in your favor.