SaaSpocalipsis

The SaaSpocalypse has become one of the most talked-about (and feared) terms in the tech ecosystem since around 2023-2024. This neologism combines “SaaS” (Software as a Service) with “apocalypse” and describes a profound crisis in the cloud software industry: the end of the golden age of unlimited growth, stratospheric valuations, and seemingly endless funding rounds.

For more than a decade, the SaaS model seemed invincible. Companies like Zoom, Slack, Notion, Canva, and monday.com grew at annual rates of 100-300%, multiplied ARR (Annual Recurring Revenue) almost effortlessly, and achieved valuations of 10x, 20x, or more their revenue. Investors poured billions into the company because “the future was recurring subscriptions.” However, from 2022-2023 onward, the landscape changed dramatically.

Persistent inflation, rising interest rates, and a general correction in the tech market brought the era of cheap money to an end. SaaS companies found they could no longer burn through cash indefinitely hoping for future returns. Investors began demanding capital efficiency, real profitability metrics (the true, not the embellished, Rule of 40), and, above all, profitable growth.

Thousands of startups that had raised Series A and B rounds in 2021-2022 at very high multiples were forced to make down-round funding, implement massive staff reductions (layoffs of 20-50% in many cases), make desperate pivots, or simply shut down. Valuations plummeted by 60-90% in many cases. Companies valued at US$5 billion in 2021 barely reached US$500-800 million by 2025.

Another key factor in the SaaSpocalypse has been market saturation and corporate buyer fatigue. IT departments and CFOs already have between 80 and 300 active SaaS tools per medium-to-large company. "New" SaaS is no longer easily adopted: companies must demonstrate immediate ROI, replace existing tools, or fail. Churn rates have risen sharply, and net revenue retention (NRR) below 110-115% has become a cause for concern.

The landscape stabilizes in 2025-2026, but it's no longer the same. Companies with highly differentiated products, high retention rates, gross margins >75%, operational efficiency, and clear paths to profitability will survive (and thrive). Those that only sold “growth at all costs” have disappeared or been sold off for a pittance.

The SaaSpocalypse wasn't the end of SaaS, but the end of easy SaaS. It marked the transition from an exuberant adolescence to a demanding maturity. Those who understood this and adapted quickly are building the next sustainable unicorns; the rest… are simply part of the story told in “lessons learned” talks at tech conferences.

Disclaimer:

The information provided through this channel does not constitute financial advice and should not be construed as such. This content is for purely informational and educational purposes. Financial decisions should be based on a careful evaluation of your own circumstances and consultation with qualified financial professionals. The accuracy, completeness or timeliness of the information provided is not guaranteed, and any reliance on it is at your own risk. Additionally, financial markets are inherently volatile and can change rapidly. It is recommended that you conduct thorough research and seek professional advice before making significant financial decisions. We are not responsible for any loss, damage or consequences that may arise directly or indirectly from the use of this information.