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The Twenty Minute VCJason Lemkin: PluralSight S*** the Bed & The Next IPO Candidates | E1160
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At a glance
WHAT IT’S REALLY ABOUT
SaaS Turbulence: PE Wipeouts, Slowing Giants, But New Winners Rising
- Harry Stebbings and Jason Lemkin dissect a brutal but revealing week in SaaS: Vista’s Pluralsight write‑off, Salesforce and Mongo’s growth resets, and compressed public market multiples. They argue that the private equity ‘savior’ narrative is cracking, liquidity is scarce, and public markets are demanding profitability at the expense of R&D. At the same time, a cohort of non‑tech, vertical, and B2B2C SaaS companies—like Canva, Toast, Samsara, Zscaler, and Klaviyo—are still growing 30–40%+ at scale, showing SaaS is not universally “broken.” The conversation also covers AI as largely substitutional spend, venture dynamics (TVPI vs DPI, secondaries, fund strategy), and the future IPO pipeline, alongside Lemkin’s candid reflections on being both an investor and SaaStr operator.
IDEAS WORTH REMEMBERING
5 ideasPrivate equity is no guaranteed exit path for SaaS anymore.
Vista writing Pluralsight down from a $3.5B buyout to zero—despite strong margins—shows that levered PE deals can fail when debt service outruns cash generation; if similar issues hit other big PE SaaS deals (Zendesk, Anaplan, etc.), LPs may rethink allocations and founders lose a major liquidity avenue.
Classic B2B SaaS selling into tech is in a structural downcycle.
Salesforce, Mongo, Workday, and others are ratcheting down growth expectations, with Salesforce projecting mid‑single‑digit growth and weak NRR as customers cut seats and shrink deal sizes; selling B2B software to tech buyers (“B2B2B”) remains brutal, even as broader macro indicators are fine.
Non‑tech, vertical, and B2B2C SaaS are still growing aggressively.
Canva (~$2.3B revenue, ~40% growth), Toast, Samsara, Zscaler, Monday.com, and Klaviyo are all growing ~30–50% at high scale by selling into SMBs, traditional industries, or consumers, demonstrating that the pain is concentrated in tech‑buyer segments, not SaaS as a whole.
AI spend is largely substitutional, not net‑new budget—yet.
Enterprises are funding AI by killing existing tools (e.g., churning a dozen apps to buy one AI solution), and Gartner data suggests GenAI’s boost to SaaS is mostly reallocation; incumbents like Salesforce, Dell, and ServiceNow talk up AI products, but none credibly show material revenue uplift so far.
Founders must know exactly where their budget comes from and ask.
In a world of constrained and reallocated spend, strong enterprise sellers explicitly ask early in discovery whether a project is budgeted and from which line; founders who don’t understand the budget source—and what must be cut to fund them—risk being swapped out to free up AI or other priorities.
WORDS WORTH SAVING
5 quotes“If a lot of these big PE deals can’t service their debt, we’re writing off tens of billions. This is not a trillion‑dollar industry.”
— Jason Lemkin
“Everyone on Twitter thinks there’s one root cause. But if Canva’s at $2.3 billion growing 40%, Samsara’s growing 40% at over a billion, and Zscaler’s growing 40% at two billion, you can’t say all is bad.”
— Jason Lemkin
“So far the evidence is no: incumbents will build great AI products, but it’s not clear they’ll get any revenue boost from it.”
— Jason Lemkin
“I think we’ve made a terrible pact with the devil in public SaaS: the market wants 30–40% margins, but there’s no money left for R&D.”
— Jason Lemkin
“One large accidental mistake founders make in fundraising is asking for too much money.”
— Jason Lemkin
High quality AI-generated summary created from speaker-labeled transcript.
