New data shows that net retention at software companies has been halved in recent quarters, partially explaining the slowdown of revenue growth at tech firms.
This isn’t wholly surprising, since net retention forms a core plank of the SaaS economic model, and has been under extreme pressure, as we noted last week. This is because software companies are finding themselves trying to meet two, seemingly contradictory asks: tighten costs and stop letting growth slow too much while your existing customer base reins in spending.
The Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.
