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SaaS Growth Report: Bootstrapped Firms Show Resilience, VC-Backed Outgrow Amid Market Volatility

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TECH BRIEF

The ChartMogul SaaS Growth Report analyzed the growth metrics of VC-backed and bootstrapped SaaS companies, revealing that bootstrapped companies adapt quicker to market volatility while VC-backed companies grow faster. With new business declining, both types are leaning more on expansion to drive growth. VC investment is increasingly difficult to secure, leading several companies to rely on their own sustainability and efficiency. With the post-pandemic investment slowdown, even VC-backed companies are struggling to reignite growth. The resilience of bootstrapped companies has been underscored in these cost-conscious times.

💡 Insight: Bootstrapped SaaS companies, though slower to reach scale compared to VC-backed ones, demonstrate greater resilience and adaptability in market volatility, stabilizing growth quicker. The reliance on internal revenue makes them frugal and enhances long-term sustainability, unlike their VC-counterparts driven by external funding. The current funding environment has pushed all SaaS businesses to balance between efficiency and expansion strategies, with customer retention posing significant challenges. Nonetheless, consistent top-quartile performance among bootstrapped firms suggests critical operational insights that could benefit VC-backed startups.

Microsoft and Amazon are employing a strategy that seems like an acquisition-disguise, hiring AI startup teams and licensing their technology while avoiding antitrust regulators. Amazon recently hired 80% team members from Adept, similarly, Microsoft licensed technology from Inflection and employed its team. Building competitive AI models is costly, and with Big Tech's deep pockets, more AI startups might follow the same path as Inflection and Adept. The strategy assists in advancing Big Tech’s interest in AI, considered the next significant breakthrough.

YouTube has quietly introduced a change allowing individuals to request the takedown of AI-generated content mimicking their face or voice, as part of its responsible AI agenda. These requests can be made under YouTube's privacy request process. YouTube will use independent judgement and several factors to decide whether to remove requested content. The revision, which wasn't widely advertised, permits the uploader 48 hours to act on the complaint. However, YouTube can take action against accounts with repeated violations.

Robinhood has acquired AI-powered research platform Pluto Capital to feature enhanced AI capabilities in its investing app. Pluto will provide tools for faster trend identification and investment opportunities. The acquisition will also offer real-time portfolio optimization and personalized investment strategies based on user data. Pluto's founder, Jacob Sansbury, will join Robinhood to help accelerate AI adoption.

The European Commission has found Meta's "pay or consent" advertising model in breach of the bloc's Digital Markets Act, marking a significant blow for the tech company in the EU. With this ruling, Meta could potentially face fines amounting to 10% of its global revenue. This comes as the Commission moves to wrap up its investigation, and allows Meta the chance to respond to the allegations in writing.

Nvidia is facing likely antitrust charges from French authorities, following last year's office raid. The impending charges come amid global regulatory scrutiny, as Nvidia's growing dominance in the artificial intelligence chip market raises concerns, especially the sector's reliance on Nvidia's CUDA chip programming software. Nvidia's market share in AI chips currently exceeds 80%.

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