The Science Behind Ranking SaaS Companies: Montclare Bluescore

INTERPRETING BLUESCORES

Data Acquired

Ranking Process

1

DATA

2

ALGORITHM

3

BLUESCORE

Mapping Success

Low Score

Poor business model adoption, low % of SaaS revenues, lack of innovation

Medium Score

Business expansion, refinement of processes and increasing product adoption

High Score

Mastery across all business dimensions, acceleration with sales and continuous product improvement

Accurate Representation

Traditional Approach	New Approach
By financial and industry analysts	Based on operational and financial metrics
Commonly score large publicly traded companies	Rank public and private companies
Evaluate lagging indicators	Evaluate leading and lagging indicators
Academic approach	Leverages working relationships with executives
9 out of 10 startups fail	Learn from leaders
Pay to play with big name firms	Independent

Company

SAAS VS. HYBRID
Basic way to segment companies and how they operate their SaaS businesses. Impacts operational model efficiencies, COGS, scalability, GTM, revenues, service delivery options and renewals
SAAS IPO
Major indicator of market momentum. Also the size of the IPO indicates company overall valuation.
YEAR COMPANY STARTED SAAS
Using proprietary methodologies, we determine how mature a company’s SaaS business is.

Product

PRODUCT INNOVATION
A continual delivery of new features and capabilities to products can indicate a higher probability of customer adoption, retention and success in the market.
R&D; SPEND
An important indicator of innovation. A challenging data point to capture on all companies, therefore industry benchmark data is used many cases.
THOUGHT LEADER SCORE
An indicator of the most innovative SaaS companies. Votes are acquired by industry experts analyzing and working directly with companies, providing first-hand knowledge of products and processes.

Revenue

TOTAL ANNUAL SAAS REVENUES
A clear indicator of where a company is on the SaaS Maturity curve. Useful to contrast against a company’s total revenues to see how big the SaaS business is within the parent company.
SAAS BUSINESS
Indicates the focus on SaaS as a business. For transitioning or Hybrid companies, it is valuable to understand how far they are in their SaaS transition journey.
SAAS REVENUE/EMPLOYEE
Total SaaS revenues ensures consistency when comparing SaaS and Hybrid companies. This is an excellent indicator of overall business effectiveness and efficiency.

Transaction

SAAS FUNDINGS
Indicates market momentum. The size of the round also indicates the maturity and value of the company.
SAAS M&A; DEALS
Indicates market momentum. The size and type of deal indicates momentum and overall valuation impact.

Additional

PROPRIETARY INFORMATION
Montclare gathers additional proprietary data points to assess SaaS company performance. Although the description and data for these characteristics are not shared publicly, Montclare leverages and classifies them as equally important to other performance-based measurements in the evaluation of SaaS companies.

How to use Bluescores

Efficiency

Indication of SaaS business model efficiency

Valuation

Independent measurement to determine company’s value

Comparison

Evaluate companies against their competitors

Momentum

Determine company’s trajectory for future success

Investment

Boards and investorsuse it to assess company attractiveness