24 Predictions for SaaS in 2024
Before 2023, the term “generative AI” was met with blank faces. But over the past 12 months, Open AI’s ChatGPT has gone mainstream, Twitter has become X, Silicon Valley Bank collapsed, as did FTX, and WeWork… How many of these did you see coming?
What will 2024 bring? We reached out to SaaS founders, operators, and investors to get their hot takes on what new “normals”, shake-ups, and challenges the new year will bring to the SaaS industry.
TL;DR:
AI will be everywhere, but nowhere to be seen
Caya (Jose Cayasso), CEO and Founder of Slidebean
“I’m convinced that SaaS solutions will increasingly run on GPT, which we’ll start to regard as ubiquitously as AWS. Using LLMs to enhance these solutions will no longer be seen as innovative but will become the standard.”
Sarah Kiefer, CMO at Pitch
“AI will continue to be a big story, and generative AI will become more and more sophisticated, but software companies will focus more on integrating predictive and optimization AI for ‘co-pilot’ and task automation purposes within their existing products. Customers will expect AI that not only speeds workflows and reduces manual tasks, but is proven to uncover new opportunities and accelerate revenue growth fast.”
Martin Raißle, VP Finance at ChartMogul
“Towards the end of the year, we’ll see the first SaaS products that are built from the ground up based on AI — without drawing attention to this. Just like machine learning before it disappeared in the background, AI will soon be so ubiquitous that it’s no longer a differentiator. Smart startups will focus their messaging on the problems they solve, not how they do it.”
Enzo Avgio, CEO and Founder of June
“2024 will see the rise of automated SaaS. The first generation of SaaS companies were about digitizing industries. The second generation went deeper, more verticalized too. The next generation will do more for users with less hassle. I call this automated SaaS; SaaS that commodizes what has already been done, and does 10x more. In a better way too.”
Polis Pilavas, VP Engineering at ChartMogul
“AI will dominate and disrupt. Chatbots and virtual assistants using natural language processing and machine learning will become the norm for things like customer support. They’ll be able to handle complex queries, troubleshoot, and predict problems before they surface. Private GPTs (intranet AI-powered knowledge bases) will become a thing too.”
Capital will return to SaaS markets, and M&A activity will accelerate
Yoram Wijngaarde, CEO and Founder of Dealroom
“VC investment into SaaS companies could start growing again in 2024. SaaS investment will close at around $100B this year, a four year low, and down from $264B in 2021. But some important recent exits, AI tailwinds and (relative) B2B resilience could help SaaS funding turn a corner.”
Matt Lerner, CEO and Founder of SYSTM
“It’s clear that US investors expect a return to lower interest rates, and they’re already driving up valuation multiples on tech stocks. I predict this is the beginning of a long-term (e.g. 3-5 year) return of capital to tech markets, including VC. So for SaaS startups, that means the fundraising market should get more-founder friendly.”
Danil Kislinskiy, Investor and Founder of Go Global World
“2024 will be a major test for the VC and startup industry on whether we hit the bottom of this crisis or continue falling. The industry itself may correct it to prevent falling if major players like Sequoia, a16z, and others continue aggressively investing again. If interest rates decrease, many VCs will start borrowing again and that will refuel the market with capital again.”
Daria Danilina, CCO and Co-founder of Salesroom
“I expect consolidation to still be a big theme in 2024, as companies continue to optimize their cost base, and overlap between vendors will be ruthlessly eliminated. At the same time, I think there will be more M&A as start-ups coming to the end of their runway will look for acquirers.”
Sid Jain, Head of Insights at Gain.pro
“After a brief lull in 2023, the broader SaaS market will see a lot more IPOs and M&A in 2024. As businesses become more efficient, investors would continue to be attracted towards this high growth asset class.”
Slowly but surely, SaaS buyers will come back
Brad van Leewen, COO and Co-founder of Cledara
“Small SaaS buyers are now outpacing enterprise buyers in software spend for the first time since 2022. Our data shows this shift tends to signal improving market conditions for SaaS companies. If the trend continues into 2024 as expected, it could foreshadow accelerating growth for SaaS companies.”
Nick Franklin, CEO and Founder of ChartMogul
“Demand for SaaS will be similar to 2023, with a continued slow and cautious recovery. Buyers will be looking for ways to consolidate, simplify and reduce cost as they seek efficiency over growth.”
Daniel Bakh, CEO and Co-founder of Fullview
“After a turbulent 2023 with market meltdowns, I think 2024 will prove to be a ‘soft landing.’ People will continue to invest in new software to grow productivity and especially to drive customer loyalty.”
Pricing experimentation will soar
Ingrid Bonde Åkerlind, Principal at Oxx
“As software tooling consolidation pressures continue, and driving growth from new customer acquisition alone remains difficult, companies will continue to look to pricing and packaging to grow revenue in existing accounts. Here, we’ll see that generative AI-powered natural language chats are likely to quickly become table stakes. Pricing power is more likely to come from traditional sources of SaaS defensibility: data moats, systems of record, and workflow automation.”
Sabrina Castiglione, COO at Pento
“In 2024, there will be more changes made to pricing models. SaaS companies will need to evolve how they price their products in response to inflation, higher interest rates, and general customer feedback. However, security, fraud, and CFO-office SaaS will have a good year as they tackle challenges stemming from the rise of AI and focus on cash efficiency.”
Lucas Bédout, CEO and Founder of Hyperline
“The market will see an increase in the diversification of pricing models. Because companies don’t have as much money as before, they’ll be cost conscious and will try to cut the excess, leading to more customized and granular pricing strategies being run.”
Sara Archer, VP Sales at ChartMogul
“Pricing has always been competitive in SaaS, but in 2024 we’ll see teams experimenting with new pricing models to find one that fits their customers better. We’ll also see a greater investment in sales talent upskilling, to help sales reps deliver excellence across the entire customer journey.”
Marketing will adapt to AI and switch to growth-mode
Elin Lütz, CEO and Founder of Ripe
“In 2024, SaaS companies will be back in growth mode, but this time, will invest in more sustainable GTM playbooks such as value-based sales and expansion, coupled with a strong product and great content.”
Anthony Kennada, CEO and Co-founder of Audience Plus
“In 2024, SaaS marketers will produce content for humans rather than algorithms, focus on relationships rather than impressions, and by doing so, will unlock efficient growth of sustainable revenue unlike never before.”
Esben Friis-Jensen, Chief Growth Officer and Co-Founder of Userflow
“SaaS organizations will be simplified to be more fit for an inbound self-service buyer world. Profit-first will be the norm and more SaaS businesses will try to build out smaller but highly effective teams, using strategies like PLG.”
Jonah Mandel,VP Sales and Customer Success at Capchase
“Boards are going to push companies to start focusing more and more on growth vs the efficiency mindset of 2023. Companies that don’t invest in community, events, referral programs and strategic partnerships will really struggle to build top-of-funnel results.”
Francis Brero, CPO and Co-founder of Madkudu
“High-quality content marketing becomes king again. Google Gen Search, email spam restrictions, and AI commoditization make it critical for B2B marketers to stand out by having something interesting, and novel to educate prospects with.”
SaaS Platforms expand to integrate whole functions
Jessica Zwaan, COO at Whereby
“With more SaaS companies focussed on the investment vehicle part of the businesses, we’ll see a new effort to expand to more markets, reduce infrastructure costs, and create more vertical-agnostic tooling to capture more market share. Those who need a lot of growth will start looking for more avenues to get it. I’d expect to see more CRMs, HRIS, and “core data layer” features expand from our favorite SaaS players.”
Rachel Whitehead, VP Marketing at ChartMogul
“With SaaS buyers having to do more with less, we’ll see more and more ecosystems of tools form, and standalone tools will find it hard to sell alone without partners. SaaS suites will continue to integrate different functions within a single platform to bring more simplicity for buyers.”
