Beyond Benchmarks 2025
“A Different Perspective”
Benchmarkit partnered with Emergence Capital to collect and benchmark 2025 SaaS performance metrics, with the goal to publish two different reports with two complementary, yet unique perspectives on the takeaways from the data collected - one by Benchmarkit and one by Emergence Capital.
Today’s edition of the SaaS Barometer newsletter is dedicated to the Emergence Capital recently published “Beyond Benchmarks” 2025 report and their insights, perspectives and fresh ideas on what the benchmarks suggest for the future of B2B SaaS.
1️⃣ AI is transforming historic benchmarks
AI-native companies have a median growth rate of 100% versus 23% for traditional SaaS companies. While some argue this reflects the 'smaller base effect' of younger companies, the data suggests something more fundamental: These companies aren't just growing faster, they're operating in a fundamentally different paradigm.
Two examples include:
StackBiz launched Bolt.new in October 2024, and saw revenue soar to $4 million ARR in just 30 days, and then surged to $40 million ARR by March 2025.
Another example is Clay which saw $7M ARR in 2022, grew 129% to $16M in 2023 and followed that up with a 94% growth rate in 2024 hitting $31M ARR.
The chart below compares the median growth rate of Native-AI to legacy SaaS companies adopting AI into their product.
Another example of the different paradigm that AI-Native companies are working within is Net Revenue Retention (NRR). Though logic suggests that in an early market with so many new companies competing for a limited number of early adopter/early majority customers who are evaluating/testing AI products, that the churn rate would be high, and expansion would be more challenging.
However, the 2025 benchmark data shows that Native-AI companies have a median NRR of 132% versus legacy SaaS companies adopting AI at 108%. Another surprising, yet telling point is that legacy SaaS companies adopting AI in their product have a Gross Revenue Retention Rate of 81% versus Native-AI companies with a median GRR at 89%.
2️⃣ R&D fuels the AI-native movement
AI-native companies allocate 50% of their R&D budget to native AI development, while legacy SaaS companies adopting AI invest just 28%. The gap widens dramatically at the extremes with top-quartile AI-native companies investing 60% of total R&D in AI versus just 5% for bottom quartile, legacy SaaS AI adopters.
Building a native-AI platform requires significant investment, focus and dedicated core competencies. Companies treating AI as a feature rather than a core competency will be out-invested and out-innovated by truly native competitors.
3️⃣ AI-native Software - Augments or Replaces Employees
AI-native companies were fairly split on answering the question “is your software primarily used to augment existing human labor (52%) or to replace human labor (48%)?”. This balanced approach highlights the need for AI-native companies to focus on the features/functions that increase existing employee productivity or that are agentic and can be used to replace human labor.
The below chart shows the primary goal of AI-native companies in regards to human labor impact:
Another question asked to AI-native companies was why customers selected their product - the results can be seen in the chart below:
AI-native company customer’s primary goals are to increase operational efficiency (33%) or to accelerate revenue growth (22%). This has been true for many legacy SaaS solutions, but the incremental bonus with AI-native solutions is they become smarter and more efficient over time, both with and without reinforcement from human labor.
4️⃣ Customer Expansion is the new growth engine
Companies in the $50M - $100M ARR range report that 58% of their new ARR comes from existing customer expansion, and that number increases to 67% in companies greater than $100M - existing customers and by proxy, Customer Success team is foundational to B2B SaaS company growth.
With this increasing dependence on existing customer expansion, executive teams need to apply the same level of focus, process management and conversion measurements on the up-sell and cross-sell process as they historically placed on new customer acquisition.
5️⃣ Enterprise Customers come with an unnoticed service tax
One of the unique insights Emergence Capital pulled from the data is the additional cost of goods sold incurred with “Enterprise Companies” - companies larger than $1B in revenue.
Due to enterprise customers' increased expectation on implementation, customer service and professional services, Gross Margins are lower than the total population 77% median, and actually decrease to 69% - 71% gross margins for solutions greater than $100K ACV. Gross Margins by ACV can be seen in the below chart:
6️⃣ BEWARE - The $20M - $50M Danger Zone
Emergence Capital highlights on page 26 of their report the $5M - $50M ARR danger zone as measured by Gross Revenue Retention. The chart below clearly shows that GRR begins to decrease at $5M and then at $20M decreases further until it begins to correct at $50M ARR and above.
Though not included in the Emergence Capital Beyond Benchmarks report, Benchmarkit has historically seen a similar decrease in new customer acquisition efficiency, which can be seen in the below chart focused on the New CAC Ratio:
New CAC Ratio
The decrease in efficiency, across both retention and acquisition is often attributable to the expansion of target customer segments, such as mid-market to Enterprise customers which have different expectations and requirements from both an acquisition, service and retention perspective.
The above is one reason why it is so important for companies nearing $20M ARR measure performance by customer segment and tailoring the acquisition, retention and expansion motion, processes and even resources to each unique customer segment and their unique requirements. This also allows for investors to understand that newer target segments, dare I say hopeful Ideal Customer Profiles (ICP) are more expensive, though existing customer segments can continue to be served as efficiency if not more efficient than before they began to expand target customer segments!
Summary - Beyond Benchmarks 2025 by Emergence Capital Report
Emergence Capital is a founding father of venture capital firms dedicated to the growth and success of SaaS companies dating back to their initial investment in Salesforce in 2003, and their subsequent early stage investments in Veva, Box, and Success Factors.
The Emergence Capital “Beyond Benchmarks” report and their insights into how B2B technology is evolving, coupled with the associated performance benchmarks and expectations provides a unique view into the expectations of investors, operators and customers alike in the early stages of the AI era!!!
You can gain access to the Emergence Capital “Beyond Benchmarks” report at:
emcap.com/beyond-benchmarks
If you would like to see the SaaS Performance metrics benchmarks from the report iteratively, allowing you to filter each benchmark by company profile attribute visit:
benchmarkit.ai/2025benchmarks
“What is the definition of an AI-native company?” is a question that I get asked often - so below is one definition that may help:
An AI-native company is built from the ground up with artificial intelligence at the core of its product, value proposition, and operations. AI isn’t just a feature—it is the product.
Key Traits:
Core value is AI-driven: The product depends fundamentally on machine learning (ML), large language models (LLMs), computer vision, etc.
Learning loops: Products improve automatically with user data
Low or no UI: Often API-first or agentic experiences (e.g. copilots, autonomous agents)
High compute usage: Often rely on GPUs, inference, and fine-tuning