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Monthly Market Momentum

Venture capitalists put on their SaaS-y costumes just in time for Halloween, as investments for SaaS companies increased by 38% this month over last. The 43 total rounds were the most since May.

SnapLogic scored the largest round with a $20M Series D led by Ignition Partners with participation from four other investors including Andreessen Horowitz. A16z, Ignition and Triangle Peak Partners had also previously invested $20M back in 2o12 for the integration platform’s Series C round. The new growth money will be used mainly to fund sales and marketing.

Albuquerque-based SambaSafety raised a $16.4M round from Main Street Capital for its risk management software for car and truck fleet owners. The startup’s first round was enough to place among the top 10 funded startups from Albuquerque, and the first venture-backed SaaS company in the city according to CrunchBase. The top SaaS investor in 2014, Bessemer Venture Partners, tallied its 10th investment to date in leading a $3.5M seed round for Abacus Labs of New York.

During a month of mega-deals, the median SaaS round in October grew to $1.5M, compared to just $500k in 2013 Q4. The median has increased each of the consecutive quarters since the beginning of 2013 for SaaS startups, signalling a new wave of growth rounds after a flood of seed funding that peaked in January 2013 at 47 rounds. The number of Series A SaaS rounds this month matched the prior high-water mark set in June last year.

The quickening pace of SaaS follow-on deals fits the usual 12-18 month window, and many of the largest rounds in October were startups like SnapLogic, Lever (Y Combinator, SV Angel), Evertrue (Bain), Acumatica (Almaz, Runa), Recurly (e.ventures, Polaris), Fits.me (Smartcap, Entrepreneurs Fund) whom each took in another $5M+ in follow-ons from existing investors.

There was most likely never a better time to start a SaaS company than early 2014, as venture investors now seem to be stockpiling funds in young companies and hoping for a payout in a proven SaaS IPO market.

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