Yammer achieved tremendous growth by tripling their annual revenue for three consecutive years. While SaaS companies offer great potential, there are also a lot of head fakes in the public markets where investors only want to buy that growth constantly.
Yammer, a company that started with a total contract value of 7 million TCV and 5 million ARR, tripled its revenue every year and is now worth 500 million. Its journey exemplifies how hard it is to go three times back to back, according to an expert.
The high gross margins and pure software nature of SaaS companies make them attractive investment options, but the market may be inflated due to investors chasing yield. There is potential for growth, but also the possibility of the market reaching its peak.