Assertion Partly supported AI assessment confidence: 88% certainty 4/5 debate potential 2/5

Rory O'Driscoll: Traditional SaaS companies had high stability and only 5% churn

Rory O’Driscoll · Opendoor CEO, Kaz Nejatian: OpenAI and Oracle, How Can Either Afford to Do This · 20VC with Harry Stebbings · Sep 18, 2025 · at 1:03:13

Scale Venture Partners GP Rory O'Driscoll contrasts the low churn rates of traditional SaaS companies with the revenue risks in generative AI.

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“That would be a very different level of stability than we saw on the SAS era where, you know, these things lasted forever. They churned five percent.”

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The claim, plainly

During the SaaS era, software companies typically experienced churn rates of around 5%.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Historical SaaS industry benchmark reports from KeyBanc Capital Markets, SaaS Capital, ChartMogul, and Bessemer Venture Partners indicate that 5% annual churn was indeed a prominent benchmark during the SaaS era, but it represented best-in-class / top-quartile performance or enterprise-grade SaaS ($100k+ ACV) rather than the industry typical/median. Across broad industry surveys, the median annual gross revenue churn for typical private B2B SaaS companies was historically between 10% and 12% (with annual logo churn between 10% and 15%). Therefore, while 5% was an established standard within the industry, it applied to elite performers or enterprise segments rather than the average or typical SaaS company.

KeyBanc Capital Markets SaaS Surveys consistently report a median annual Gross Revenue Retention (GRR) of ~90%, translating to a median annual gross churn of ~10%. Top-quartile performers achieved <6-7% annual gross churn.
SaaS Capital reports that overall median annual gross churn across private B2B SaaS companies ranges from 10% to 12%, though enterprise SaaS ($100k+ ACV) experienced 4% to 10% annual gross churn.
Bessemer Venture Partners identifies ~5% annual gross churn as an elite 'best-in-class' target for top-tier cloud companies rather than an average across the market.

Checked against

[1] livmo.com [2] growigami.com [3] churncost.com [4] optif.ai [5] pmtoolkit.ai [6] bigdelta.com [7] sapphireventures.com [8] growthspreeofficial.com

assessed as of 2026-07-23

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Mentioned

SaaS era

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Rory O'Driscoll: Traditional SaaS companies had high stability and only 5% churn

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