Enterprise-Focused Public SaaS Companies More Likely to Be Acquired

David Cummings on Startups

Reflecting on the list of publicly traded B2B SaaS companies from yesterday, it’s clear that over the past few years, companies that reached scale and went public were more likely to be acquired if they focused on selling to large companies (enterprises) as opposed to ones selling into the small-to-medium sized business segment. Companies like ExactTarget, Eloqua, and Responsys are all in the email marketing space, which is white hot (and just had another nice exit with IBM buying Silverpop and closing the transaction today). If you go back another year you have SuccessFactors and Taleo both getting acquired, and both targeting the enterprise with HR software.

Here are a few thoughts on why enterprise-focused startups are more likely to be acquired:

  • Companies targeting the enterprise with scale have an easier time maintaining a fast growth rate due to the nature of high dollar sales (if each new deal is $200k/year…

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