KBCM Technology Group and ForEntrepreneurs Release the 2020 SaaS Survey COVID Edition Detailing Pandemic Impact on Private Software Companies

The software-as-a-service (SaaS) industry has long relied on empirical benchmarking to navigate the complexities of corporate growth, capital allocation, and operational efficiency. For the eighth consecutive year, the prestigious KBCM Technology Group—formerly recognized as Pacific Crest Securities—has partnered with the prominent industry publication forEntrepreneurs to publish its definitive annual benchmark report. However, the release of the 2020 KBCM SaaS Survey: COVID Edition marks a significant departure from previous editions. Developed in direct response to the unprecedented global health crisis, this specialized report evaluates how the macroeconomic shocks of the COVID-19 pandemic reshaped the private SaaS landscape during the critical early months of market disruption.

By analyzing baseline performance metrics from over 500 private SaaS companies, the survey provides a granular look at how businesses fared through May 31, 2020, with survey data systematically gathered between mid-June and early July of that year. Led by industry experts including David Spitz and the broader advisory team at KBCM Technology Group alongside the forEntrepreneurs readership network, this benchmark serves as a crucial historical and operational compass for startup founders, venture capitalists, and enterprise tech executives trying to decode an entirely new economic reality.

Background Context and the Evolution of the SaaS Benchmark

To fully understand the weight of the 2020 COVID Edition, one must look back to its origins. In 2010, KeyBanc initiated what was then known as the Pacific Crest SaaS Survey. The original mandate was straightforward yet ambitious: to equip business leaders and institutional investors with meaningful, standardized metrics to accurately assess corporate performance, streamline day-to-day operations, and execute well-informed strategic and financial decisions. Over the subsequent decade, as cloud computing transformed from an emerging enterprise IT strategy into the dominant software delivery model, the survey evolved into the definitive industry standard.

By 2020, the economic landscape had transformed overnight. The emergence of SARS-CoV-2 brought widespread lockdowns, enterprise budget freezes, and dramatic shifts in consumer and corporate behavior. In this volatile environment, historical operational benchmarks lost much of their predictive power. Gauging performance was no longer just a matter of tracking year-over-year growth; it became an urgent exercise in corporate survival.

Recognizing this paradigm shift, the research teams at KBCM Technology Group and forEntrepreneurs completely redesigned the 2020 survey instrument. The objective shifted from routine annual evaluation to a dynamic diagnostic tool: What does outperformance actually look like in an economic downturn? Which vertical markets or business models are prospering, and which are struggling to maintain liquidity? Most importantly, how are executive management teams reacting to collapsing pipelines and shifting customer demands?

Chronology and Methodology of the 2020 Survey

The gathering of intelligence for the 2020 SaaS Survey: COVID Edition followed a rigorous timeline tailored to capture the immediate aftermath of the initial pandemic lockdowns.

• Pre-Pandemic Baseline (Throughout 2019): Companies entered 2020 on the heels of a generally robust 2019 fiscal year, characterized by steady customer acquisition, aggressive hiring, and high valuations across the venture capital ecosystem.
• The Initial Shock (March – May 2020): As global economies ground to a halt, SaaS providers faced sudden churn spikes, delayed sales cycles, and immediate pressure to rationalize burn rates. The survey’s performance window captured baseline metrics up to May 31, 2020, encapsulating this period of maximum uncertainty.
• Data Collection Phase (Mid-June – Early July 2020): KBCM and forEntrepreneurs surveyed over 500 private SaaS companies during this window, allowing executives a brief moment to reflect on their immediate strategic pivots, cost-cutting measures, and pipeline adjustments.
• Longitudinal Tracking (Late 2020 and Beyond): Acknowledging that the market disruptions were still in their infancy during the initial data collection, the researchers implemented a unique methodological framework. Rather than conducting a static, one-time check-in, the survey established confidential code names for participating entities. This innovative approach enabled researchers to re-engage the same cohort of companies in subsequent tracking periods, ensuring longitudinal data continuity without compromising participant anonymity.

Key Findings: Last Year Versus This Year in Two Different Worlds

A core takeaway from the 2020 report is the stark contrast between the fiscal environment of 2019 and the turbulent reality of 2020. Survey data highlights how foundational metrics—such as Annual Recurring Revenue (ARR) growth rates, net retention, customer acquisition costs (CAC), and sales efficiency—diverged dramatically from historical norms.

While historical SaaS benchmarks consistently pointed toward a singular pursuit of top-line growth at all costs, the 2020 survey revealed an abrupt strategic pivot toward capital preservation. Companies that had previously prioritized aggressive, cash-burning expansion suddenly found themselves focusing on cash runway, extension strategies, and gross margin optimization.

Furthermore, the data categorized responding enterprises by size, funding stage, and vertical market exposure, revealing a K-shaped recovery pattern within the private software sector. While companies servicing remote work infrastructure, cybersecurity, cloud collaboration, and digital transformation initiatives saw accelerated demand, those heavily exposed to traditional small-and-medium-sized businesses (SMBs), hospitality, retail, and travel experienced severe contraction and elongated sales cycles.

What is Impacting Performance? Operational Pressures and Corporate Responses

The report dives deeply into the primary vectors affecting SaaS corporate performance during the early pandemic phase. According to the survey data, the top external headwinds included:

1. Stalled Enterprise Sales Pipelines: Decision-makers across nearly every industry paused non-essential software expenditures as they assessed their own financial exposure.
2. Elevated Customer Churn and Downselling: Clients facing revenue crunches sought contract concessions, delayed payments, or outright cancellations, directly impacting net revenue retention rates.
3. Lengthening Sales Cycles: Deals that previously closed within a single quarter began taking significantly longer to navigate procurement, legal, and executive sign-off stages.

In response to these headwinds, private SaaS leadership teams implemented decisive corrective measures. The survey documented a widespread wave of operational adjustments:

• Expense Rationalization: A vast majority of respondents immediately froze hiring, reduced discretionary marketing spend, curtailed travel and entertainment budgets, and, in many cases, executed workforce reductions to lower cash burn.
• Product and Pricing Flexibility: To mitigate churn, many SaaS providers introduced flexible payment terms, deferred billing, or scaled-down tiers to retain customer relationships through the downturn.
• Strategic Reallocation: R&D and engineering resources were frequently redirected toward features that directly addressed remote work enablement, cost reduction, or automated workflow efficiency for their end-users.

Impact Analysis and Industry Implications

The publication of the 2020 KBCM SaaS Survey: COVID Edition offered vital analytical foresight for the broader technology sector. By synthesizing data from over 500 private companies, the report challenged prevailing assumptions about the invulnerability of software business models.

The findings underscored that while subscription-based revenue models provide greater resilience than traditional transactional models, they are by no means immune to macroeconomic shocks. Companies with high exposure to enterprise clients with robust balance sheets weathered the storm far better than those tethered to vulnerable economic sectors. Moreover, the survey emphasized the critical importance of the "Rule of 40"—balancing growth rate and profit margin—as a defining metric for financial health during periods of capital scarcity.

For venture capitalists and private equity investors, the survey provided an empirical foundation for adjusting portfolio valuation models and underwriting standards. For founders and management teams, the benchmark report served as an indispensable guide for modeling future scenarios, setting realistic internal targets, and communicating transparently with boards of directors.

Conclusion and Access to Full Resources

The collaborative effort between KBCM Technology Group and forEntrepreneurs successfully delivered a timely, objective, and deeply analytical snapshot of an industry caught in the crosshairs of a global crisis. By establishing innovative tracking mechanisms and capturing the raw realities of over 500 private SaaS companies, the COVID Edition of the survey cemented its reputation as an essential resource for software leadership.

Because data tables, comparative charts, and visual figures within the initial summaries require detailed examination, industry professionals are encouraged to review the comprehensive documentation. The complete, unabridged report remains available for public download via the official 2020 SaaS Survey PDF.