Despite a major economic crisis in the global economy, SaaS companies continue to outperform other industries. The flexible business model of SaaS provides companies with the necessary resilience to withstand disruptions. From $31.4 billion in 2015 to $145 billion in 2022, the growth rate of the SaaS industry has been mind-blowing. It is probably the impressive growth of the industry that attracts top venture capital firms to invest in SaaS companies.
The exponential growth in the SaaS market is enough to attract entrepreneurs to start a new venture. But starting a new venture requires funding. Funds are necessary for both the launch of the company as well as sustaining business operations. But unlike established businesses, raising funds could be tricky for new SaaS startups. However, there are multiple ways you can raise funds for your SaaS startup. Raising funds from Venture Capital firms is one of them. Almost all the top Venture Capital firms invest in SaaS companies. All you need is a solid pitch to catch their attention.
List Of Venture Capital Firms That Invest In SaaS Companies
- Sequoia Capital: Sequoia Capital is among the giant venture capital firms that invest in SaaS companies. Sequoia mainly invests in companies operating in finance, healthcare, energy, enterprise, and tech sectors. The firm has helped several new-age entrepreneurs in growing their SaaS businesses. Sequoia has investments in over 1,200 companies.
- Accel Partners: Accel Partners is another top venture capital firm that has invested in SaaS companies. They are generally the very first investor in SaaS companies they invest. Accel generally picks early-stage startups for investment. They have invested in leading SaaS companies like Slack, Dropbox, and DocuSign. It remains the lead investor in 70% of its portfolio companies.
- The SaaStr Fund: The SaaStr Fund is a venture capital firm that helps new-age founders launch and scale SaaS startups. It is a $90 million venture fund that puts in between $500k to $6 million per startup. If you are a freshly launched SaaS startup looking for a fundraising opportunity, pitching to the SaaStr fund could actually be a good idea.
- Sprk Investors: If you are an early-stage SaaS startup in the US, Sprk Investors is one of the venture capital firms that you can approach. Sprk provides Seed Capital to businesses across the industries. It is actually a group of accredited investors dedicated to investing in early-age businesses. Besides funding, Sprk Investors also aid startups in growth by providing them access to valuable resources.
- New Enterprise Associates: New Enterprise Associates is a renowned venture capital firm that mainly invests in SaaS startups in the tech and healthcare sectors. The VC firm is operating since 1977 and has invested more than $19 billion in various companies globally. Besides funding, startups get valuable industry insights and expertise, which is nothing less than a goldmine for new companies. New Enterprise Associates invest heavily in SaaS companies. The venture capital firm has invested in companies like MindTickle, VividCortex, and greytHR.
- 500 Startups: Silicon Valley-based 500 Startups is a global venture capital firm that has more than $454 million of committed capital to help startups establish themselves. They have helped more than 2200 tech startups. 500 Startups has invested in several leading tech companies such as GitHub, Udemy, Canva, Intercom, and Grab. SaaS is the 4th biggest investment area for 500 Startups.
- Andreessen Horowitz: Founded in 2009, Andreessen Horowitz is a Silicon Valley-based venture capital firm that helps SaaS startups globally. They have investments in several SaaS companies such as Coinbase, GitHub, and Asana. Andreessen Horowitz has nearly $16.5 billion in assets under its management. They have companies like Sandbox, HealthIQ, and DoNotPay in their portfolio.
Conclusion
It takes a lot of things to make a SaaS startup a success. A solid idea, a strong team, and funding are prerequisites. While founders can take care of the idea and the team, they need the help of venture capital firms to raise funds. Venture capital firms have invested heavily in SaaS companies over the past few years. With an impressive pitch, approaching VCs could be your best bet to launch and grow your SaaS startup. Given the growth rate of the SaaS industry, venture capital firms are highly likely to invest in startups that bring value to their portfolio.