Introduction
In our recent webinar on how SaaS companies can best prepare for a strategic exit, we explored how performance patterns evolve in the years leading up to a transaction. One of the clearest signals from OPEXEngine’s proprietary cohort data is this: Annual Recurring Revenue (ARR)growth is the foundation of exit success.
1 in 3 companies achieve a successful exit or IPO within three years of benchmarking with OPEXEngine. To understand why, we looked deeper at companies we could track directly in the1–2 years before their exit.
The findings are clear: companies that achieved successful exits sustained ~24% ARR growth in the years immediately before a transaction.
What We See in the Data
Looking at a cohort of SaaS companies 1–2 years prior to exit, a consistent story emerges:
- Median ARR Growth: ~24% annually in the years before exit.
- Pattern Buyers Reward: Durable, credible growth—not artificial spikes created by overspending late in the process.
- Exit Lesson: Predictability matters more than acceleration. A steady trajectory signals resilience and scalability.
Exit Readiness Takeaway
The strongest exit candidates don’t chase hypergrowth right before a sale. Instead, they demonstrate disciplined, steady ARR expansion in the 1–2 years leading up to the transaction. That consistency builds buyer confidence and supports premium valuations.
FAQs
Is 24% ARR growth the benchmark for all SaaS companies?
No. This reflects OPEXEngine’s exit-prep cohort, showing performance patterns in the 1-2 years before successful exits.
Why do buyers prefer steady growth?
Because it demonstrates repeatability and lowers risk. Spikes are often unsustainable and trigger diligence concerns.
When should SaaS leaders start preparing their ARR trajectory?
At least 18–24 months before exit, to show consistency across multiple reporting periods.
