The startup world is at the edge where making a profit is more desirable than being a unicorn company. The recent debacle of mega startups like Uber and WeWork forces the investors and venture capital fundings to reroute resources to Software-as-a-service (SaaS) companies.
Being a unicorn company is not cool anymore in the startup world. Big layoffs and “growth at all cost” attitude” in the mega-startups are bringing a halt to the seed funding and VC. After the disasters in Uber and WeWork, the investors ended up with wary VCs. Right now, none wants to repeat this.
In 2020, the SaaS industry has observed a hike of an extra billion dollars as venture capital investment. The trend comprises fewer deals with more capital that means investments backed by larger ventures.
The VC investors are more keen towards getting profit rather than achieving higher valuation. Initiating a lean startup with more profitability is coming back as new cool things in the block.
Small size companies are raising literally negligible amounts of seed fundings and still making a considerable profit. New York-based content platform Cohley, raised $1.5 million seed from the round led by Right Side Capital. Despite the minor-sized funding, the company sees a 375% ARR climb in 2019 and hoping to see a climb of 500% this year.
The secret lies in how the company handled the capital. Small SaaS companies are more efficient in maintaining small capital as the product is already made and you don’t need to hire a marketing and sales team. Without any major expenses, these companies will only make one thing with the product, profit!
Numerous companies in the SaaS industry are making a profit through efficient money management. The CEOs’ are not interested at all to turn these small ventures into unicorn rather they want to cash in as a charged-up pony.