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The ABCs of health tech: key metrics to know and grow your business - Bessemer Venture Partners

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To grow a leading health tech business, it’s important to keep an eye on measures of financial and clinical success. In the same way that the performance of software-as-a-service (SaaS) businesses have industry-specific metrics, we think that healthcare businesses should, too. As a follow-up to our study of 50 private and public health tech companies, we’re providing definitions and formulas for the business metrics all healthcare founders need to know and monitor. Annual recurring revenue (ARR) growth is a metric that all venture capital investors have their eyes on because it’s the purest view of how fast the business is growing. ARR is defined as the sum of all recurring subscription revenue that a company has received on an annual basis. It’s important to separate ARR from services revenue, which oftentimes isn’t recurring in nature. ARR is a much simpler metric for healthcare SaaS than it is for tech-enabled services; however, below we try to make a case for when it makes sense fo

Jump around The ABCs of health tech: key metrics to know and grow your business Annual recurring and run-rate revenue Bottoms-up total addressable market Customer acquisition cost payback Dollar retention Engagement Free cash flow margin and cash efficiency Gross profit margin Health! … your customers’ health is driven by both financial and clinical ROI Contributors Sofia Guerra Steve Kraus Share Subscribe Email (required): Do not fill in (spam control): 11.4.22 Healthcare The ABCs of health tech: key metrics to know and grow your business Definitions for the eight types of performance i

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