Scale Venture Partners has its latest report out on B2B start-up and it quantifies what a lot of us are seeing:
In the Age of AI, the very very best B2B start-ups, the top decile of venture-backed ones … are growing faster than ever. Or at least faster than in many years:
The top quartile is growing materially faster than 12 months ago — 72% vs. 44%.
The median in this group of VC-backed B2B start-ups is still growing much faster than 12 months ago — 33% vs. 19%.
And the top, AI fueled decile? The Top 10%? They are growing at a stunning 236% — vs. 97% a year ago.
The Top Decile is Growing at an Insane Rate Today
The top decile (TD) line of B2B start-ups has rocketed to 236% ARR growth in Q1’25. That’s not a typo—the best companies just hit escape velocity while everyone else is still figuring out the launch sequence. We haven’t seen numbers like this since the 2021.
The Great Divergence Has Officially Begun
Here’s what should terrify every SaaS founder: the gap between winners and losers is becoming a chasm. While top decile companies are hitting 236% growth, the median is sitting at a respectable but unremarkable 33%. The third quartile (TQ) managed 72%—solid, but not spectacular.
Translation: If you’re not in the top quartile, you’re getting left in the dust. The middle of the pack is becoming the kiss of death.
The Valley of Death Was Real (And We’re Out)
Look at Q4’24—that dip to 88% for top decile was the final exhale of the efficiency-first era. Companies were still playing it safe, still squeezing every last drop of optimization. But Q1’25? That’s the sound of the growth engine roaring back to life.
Even the median jumped from 16% to 33%—that’s a doubling of growth rates quarter-over-quarter. When median companies are doubling their growth, you know something fundamental has shifted.
Two Years of Flatline, Then Liftoff
The most telling story is 2023-2024: top decile ARR growth was stuck in the 80-130% band for nearly two years. Companies were treading water, optimizing, cutting, surviving. The third quartile was trapped in the 40-65% range—alive but not thriving.
The pattern is crystal clear: Survival mode from Q1’23 through Q4’24, then explosive reacceleration in Q1’25.
What This Means for Your SaaS Business
- The efficiency ceiling is real: After two years of optimization, there’s simply nothing left to cut. Growth is the only path forward.
- Capital is flowing to growth again: That top decile spike isn’t happening in a vacuum—investors are clearly rewarding revenue acceleration over burn multiple optimization.
- The middle is getting squeezed: Third quartile at 72% vs top decile at 236% means moderate growth isn’t enough anymore. You’re either hypergrowth or you’re slowly dying.
- Market timing matters: Companies that stayed disciplined through 2023-2024 and maintained product-market fit are now positioned to capture disproportionate share as demand returns.
The Bottom Line
This isn’t just a quarterly blip—it’s the starting gun for the next SaaS gold rush. The companies that survived the efficiency winter with their growth engines intact are now pulling away from the pack at an unprecedented rate.
If you’re not seeing some acceleration — you may be falling behind. Because while you’re optimizing for the last war, your competitors are already fighting the next one.
The message is clear: Grow faster or get left behind. The middle ground is a tougher spot than 12 months ago.
