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# 2026 Burn Multiple Benchmarks: The Private SaaS Median Is 0.89x. Under 1x Is Average, Not Amazing
- URL: https://www.b2bcentr.com/saas-burn-multiple-2026/
- Published: 2026-10-05T06:06:11.000Z
- Updated: 2026-10-05T06:06:15.000Z
- Description: Lighter Capital (83 private B2B SaaS, 2026): the median burn multiple among cash burners is 0.89x. The 2020 "under 1x is amazing" scale now describes half the field. Below 0.5x is top quartile.
- Author: Alex H
- Tags: SaaS, Burn Multiple, Benchmarks, Capital Efficiency, B2B

Ask a SaaS board what a good **burn multiple** looks like and you'll hear the same scale: under 1x is "amazing." That label comes from a 2020 rule of thumb, and it was written for venture-stage startups.

The newest private dataset says under 1x is closer to normal. [Lighter Capital's cash efficiency benchmarks](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) (published June 5, 2026, updated July 6, 2026) put the median burn multiple at **0.89x** among cash-burning private B2B SaaS companies.

This B2Bcentr report covers which sample produced 0.89x, why the median hides a bimodal split, how the private number compares with public SaaS, and what a board should actually treat as a warning sign. It sits next to the [Rule of 40 report](https://www.b2bcentr.com/saas-rule-of-40-2026/) and the [Magic Number report](https://www.b2bcentr.com/saas-magic-number-2026/) in the same SaaS economics set.

📊

Lead number: the median burn multiple among cash-burning private B2B SaaS companies is 0.89x (Lighter Capital, 83 companies, 2024 to 2025 financials, published June 2026). The 2020 Craft Ventures scale calls anything under 1x "amazing." On this sample, under 1x is roughly the middle of the pack.

## Key Takeaways

- Median private SaaS burn multiple is 0.89x (Lighter Capital, 2026).
- Craft Ventures' 2020 scale labels under 1x "amazing." It's now median.
- 51% of cash-burning companies still sit above 1.0x.
- Below 0.5x puts a company in the top quartile of the dataset.
- Public SaaS converts $0.75 of revenue per $1 of loss (2024).

## Which sample produced the 0.89x

Primary source: [Lighter Capital, Cash Efficiency Benchmarks for Private B2B SaaS Startups](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com). The lender analyzed **83** private B2B SaaS startups with ARR from roughly **$250K to $22M**. The data covers 2024 through 2025 and comes from actual company financials, not a survey or public filings.

Only **55** of the 83 were burning cash, and the burn multiple is computed on those 55\. The headline cut is a median cash efficiency of **1.12x** (new ARR per dollar of free cash flow consumed), which flips to a **0.89x** burn multiple. Lighter's own [burn multiple guide](https://www.lightercapital.com/blog/how-to-calculate-your-burn-multiple?ref=b2bcentr.com) (June 11, 2026) restates it as a "median burn multiple of 0.89x among cash-burning companies."

Formula used throughout: **Burn Multiple = Net Burn / Net New ARR**. [David Sacks defined it](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com) at Craft Ventures on April 23, 2020\. Lower is better. A 2x multiple means $2 burned for every $1 of net new ARR.

| Cut                                                 | Number            | Sample                                               |
| --------------------------------------------------- | ----------------- | ---------------------------------------------------- |
| Median burn multiple, cash-burning companies (lead) | **0.89x**         | Lighter Capital; 55 cash burners of 83; 2024 to 2025 |
| Median cash efficiency, same cut                    | **1.12x**         | New ARR per $1 of FCF consumed                       |
| Share of all 83 that are cash flow negative         | **66%**           | Only 32.5% generate positive FCF                     |
| Top-quartile threshold                              | **below 0.5x**    | Lighter Capital guidance on the same dataset         |
| ARR range in sample                                 | **$250K to $22M** | Private, debt-screened B2B SaaS                      |

Source: [Lighter Capital cash efficiency benchmarks](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) (published June 5, 2026; updated July 6, 2026). Restated in [Lighter Capital's burn multiple guide](https://www.lightercapital.com/blog/how-to-calculate-your-burn-multiple?ref=b2bcentr.com).

## Where the "under 1x is amazing" folklore comes from

The scale every board deck borrows is from [Craft Ventures' original Burn Multiple post](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com). It sorts venture-stage startups into five bands. Sacks wrote it in April 2020, at the start of a downturn, as a rule of thumb for founders raising money.

| Burn multiple | Craft Ventures label (2020) | Where the 2026 private data sits                              |
| ------------- | --------------------------- | ------------------------------------------------------------- |
| Under 1x      | Amazing                     | Median of cash burners is **0.89x**; 47% of burners land here |
| 1x to 1.5x    | Great                       | Part of the 51% above 1.0x                                    |
| 1.5x to 2x    | Good                        | Part of the 51% above 1.0x                                    |
| 2x to 3x      | Suspect                     | Part of the 51% above 1.0x                                    |
| Over 3x       | Bad                         | Sacks: 3x or more signals a product-market fit problem        |

Sources: [Craft Ventures, The Burn Multiple](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com) (April 23, 2020) and [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) burn multiple distribution (55 cash-burning companies).

Here's the problem. A label built for seed and Series A rounds in 2020 now gets applied to every private SaaS company in 2026\. If the median cash burner already runs **0.89x** on [Lighter's sample](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com), "amazing" describes half the field.

So a board slide that reads just under 1x isn't a victory lap. It's a pass grade.

⚠️

Warning: Craft's scale and Lighter's median measure slightly different things. Craft uses net burn over net new ARR. Lighter flips its cash efficiency figure (new ARR per dollar of free cash flow consumed). Close enough to compare bands, not close enough to compare decimals.

## The median hides a bimodal split

The most useful table on the [Lighter Capital page](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) isn't the median. It's the distribution of the 55 cash-burning companies.

| Burn multiple band | Share of cash-burning companies |
| ------------------ | ------------------------------- |
| Below 0.33x        | **24%**                         |
| 0.33x to 0.67x     | 8%                              |
| 0.67x to 1.0x      | 15%                             |
| Above 1.0x         | **51%**                         |

Source: [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) burn multiple distribution, 55 cash-burning private B2B SaaS companies (2024 to 2025 data).

Two clusters, thin middle. About a quarter of burners convert $1 of burn into $3 or more of new ARR. Half spend more than $1 for every $1 of new ARR. The band between 0.33x and 1.0x holds just **23%** of the [Lighter sample](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com).

At first glance, a 0.89x median and 51% above 1.0x don't sit comfortably together. The published page doesn't reconcile them, and B2Bcentr won't guess at the reason. The practical read: the midpoint of private SaaS burn sits right around **1.0x**, and the reported median is **0.89x**.

Lighter's conclusion is blunt: efficient companies tend to stay efficient, and inefficient ones rarely drift into the middle. Planning on gradual improvement is the assumption the data argues against.

[2026 SaaS Rule of 40 ReportGrowth plus margin, measured against the 40% folklore bar. Pair it with burn multiple for the full efficiency picture.![](https://www.b2bcentr.com/favicon.ico)B2Bcentr](https://www.b2bcentr.com/saas-rule-of-40-2026/)

## Age doesn't fix burn

Founders assume burn falls with maturity. [Lighter's age cut](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) says otherwise. Across all 83 companies, the share running cash flow negative stays above half in every age band except the youngest.

| Company age    | Cash flow positive | Cash flow negative |
| -------------- | ------------------ | ------------------ |
| 0 to 3 years   | 50%                | 50%                |
| 4 to 7 years   | 17%                | **83%**            |
| 8 to 12 years  | 35%                | 65%                |
| 13 to 20 years | 44%                | 56%                |
| 20+ years      | 38%                | 63%                |

Source: [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) cash flow status by business age, 83 private B2B SaaS companies.

The 4 to 7 year cohort is the warning. These companies have traction, and **83%** of them still burn, per [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com). That's the age where a burn multiple above 1.0x stops being an early-stage excuse.

## AI-native vs traditional, vertical vs horizontal

Two segment cuts on the [same Lighter dataset](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) test popular claims about who burns efficiently.

| Segment          | Median cash efficiency | Median burn multiple |
| ---------------- | ---------------------- | -------------------- |
| AI startups      | 1.27x                  | **0.79x**            |
| Traditional SaaS | 1.12x                  | **0.89x**            |
| Vertical SaaS    | 1.13x                  | **0.88x**            |
| Horizontal SaaS  | 0.95x                  | **1.05x**            |

Source: [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) segment medians (2024 to 2025 data). Horizontal SaaS shows a higher mean cash efficiency (3.39x vs 2.25x), driven by a few outliers.

AI-native companies come in at **0.79x** vs **0.89x** for traditional SaaS. [Lighter](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) calls the gap marginal and notes it nearly disappears when only cash burners are compared. AI is a capability, not a cheaper operating model.

Vertical SaaS has the clearer edge: **0.88x** vs **1.05x** for horizontal. Deep workflow focus tends to mean pricing power and less spend to cut through a crowded category, which shows up directly in [CAC ratio](https://www.b2bcentr.com/saas-cac-ratio-2026/) and burn.

## Private vs public: the comparison that flatters private SaaS

[Blossom Street Ventures' 2024 cash efficiency analysis](https://www.blossomstreetventures.com/post/2024-saas-cash-efficiency-metrics?ref=b2bcentr.com) tracked the **63** SaaS companies that went public since October 2017\. After excluding profitable, no-growth, and acquired companies, **26** loss-making companies remained. Their median: **$0.75** of new revenue per **$1** of operating loss in 2024, down from **$0.81** in 2023.

Flip $0.75 and you get roughly a **1.33x** burn-multiple equivalent (B2Bcentr's arithmetic on [Blossom Street's figure](https://www.blossomstreetventures.com/post/2024-saas-cash-efficiency-metrics?ref=b2bcentr.com)). That's worse than the private 0.89x. Blossom Street also found loss-making public companies grew **22%** at the median vs **9%** for the profitable ones.

| Sample                                           | Efficiency figure     | Burn multiple (equivalent) | Definition                      |
| ------------------------------------------------ | --------------------- | -------------------------- | ------------------------------- |
| Lighter Capital, private B2B SaaS (2024 to 2025) | 1.12x cash efficiency | **0.89x**                  | New ARR / FCF consumed          |
| Blossom Street, public SaaS (2024)               | $0.75 per $1 of loss  | about 1.33x                | Revenue change / operating loss |
| Blossom Street, public SaaS (2023)               | $0.81 per $1 of loss  | about 1.23x                | Revenue change / operating loss |

Sources: [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) and [Blossom Street Ventures](https://www.blossomstreetventures.com/post/2024-saas-cash-efficiency-metrics?ref=b2bcentr.com). Equivalents are B2Bcentr's inversion of each published efficiency figure.

Of course, the samples aren't twins. [Lighter](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) itself flags selection: its companies are smaller, earlier, and screened for debt, which forces discipline. Public companies carry IPO-scale cost bases. Use the gap as direction, not as proof private teams are better operators.

## How to read your own burn multiple against 0.89x

- Compute it quarterly: net burn over net new ARR for the same quarter, then trend four quarters.
- Below 0.5x: top quartile on Lighter's sample. You likely qualify for non-dilutive capital.
- 0.5x to 1.0x: in line with the 0.89x median. Not a red flag, not a selling point.
- Above 1.0x for several quarters with no deliberate growth bet: the cohort that rarely self-corrects.
- Above 3x: Craft Ventures' signal that product-market fit isn't what the top line suggests.

Pair the number with the payback view. A company can post a strong [CAC payback](https://www.b2bcentr.com/saas-cac-payback-2026/) and still run a poor burn multiple because R&D or G&A is bloated. Burn multiple grades the whole business, which is why investors lean on it when they price [ARR multiples](https://www.b2bcentr.com/saas-valuation-multiples-2026/).

## B2Bcentr's take

💡

B2Bcentr's take: Retire "under 1x is amazing" as a board-deck applause line. On Lighter Capital's 2026 sample, 0.89x is the median cash burner. Set the bar at 0.5x for "top quartile," treat 0.5x to 1.0x as par, and put any company sitting above 1.0x for three straight quarters on a burn review, regardless of age.

## Who this benchmark doesn't work for

Pre-revenue and very early companies: net new ARR is near zero, so the ratio explodes or won't compute. [Sacks says](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com) a "bad" multiple is acceptable in that window. Don't grade a seed company on 0.89x.

Companies above roughly $22M ARR sit outside [Lighter's ARR range](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com). The sample is also a lender's portfolio and prospect base, so it skews toward businesses that can carry debt. Venture-backed hypergrowth companies burning on purpose may look worse and still be fine.

And watch the definition. Quarterly burn multiples swing with one-off costs and lumpy enterprise deals. [Lighter's guide](https://www.lightercapital.com/blog/how-to-calculate-your-burn-multiple?ref=b2bcentr.com) recommends excluding one-time items and using a longer window for long sales cycles.

## What to do Monday

- Pull the last four quarters of net burn and net new ARR and compute each quarter's multiple.
- Label the slide with the sample: Lighter Capital, 0.89x median, 55 cash burners, 2026.
- Flag which side of the bimodal split you sit on: below 0.33x or above 1.0x.
- If above 1.0x, split burn by function to find whether S&M, R&D, or G&A drives it.
- Put burn multiple, Rule of 40, and Magic Number on one page for the next board meeting.

---

Next number for the same efficiency page: how many companies actually clear the Rule of 40 in 2026, and what the median really is.

[Open the Rule of 40 report ](https://www.b2bcentr.com/saas-rule-of-40-2026/) 

[Read the SaaS Magic Number report](https://www.b2bcentr.com/saas-magic-number-2026/)

## FAQ

#### What is a good burn multiple in 2026?

Below 0.5x is top quartile, and about 0.89x is the median for cash-burning private B2B SaaS, per [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) (2026). Anything above 1.0x for several quarters deserves a burn review.

#### How do you calculate burn multiple?

Divide net burn by net new ARR for the same period. [Craft Ventures](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com) defined it this way in 2020; quarterly is the standard window.

#### Is a burn multiple under 1x still amazing?

Not on current private data. [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) puts the median cash burner at 0.89x, so under 1x is roughly par; 0.5x or lower is the standout band.

#### What burn multiple do public SaaS companies run?

About 1.33x on an equivalent basis. [Blossom Street Ventures](https://www.blossomstreetventures.com/post/2024-saas-cash-efficiency-metrics?ref=b2bcentr.com) found loss-making public SaaS generated $0.75 of new revenue per $1 of operating loss in 2024.

#### Are AI startups more capital efficient than traditional SaaS?

Only slightly. [Lighter Capital](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) reports a 0.79x median burn multiple for AI startups vs 0.89x for traditional SaaS, a gap that nearly vanishes among cash burners only.

#### Does burn multiple improve as a SaaS company gets older?

Not reliably. In [Lighter's](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) sample, 83% of 4 to 7 year old companies are still cash flow negative, and even 56% of 13 to 20 year old companies burn.

#### Should I use burn multiple or Rule of 40?

Use both. Burn multiple grades how efficiently burn turns into ARR; the [Rule of 40](https://www.b2bcentr.com/saas-rule-of-40-2026/) grades growth plus margin. They catch different failures.

Primary source: [Lighter Capital cash efficiency benchmarks](https://www.lightercapital.com/blog/cash-efficiency-benchmarks-for-private-b2b-saas-startups?ref=b2bcentr.com) (83 private B2B SaaS companies, 2024 to 2025 data; median burn multiple 0.89x among 55 cash burners). Folklore scale: [Craft Ventures, The Burn Multiple](https://www.craftventures.com/articles/the-burn-multiple?ref=b2bcentr.com) (April 23, 2020). Public comparison: [Blossom Street Ventures 2024 SaaS cash efficiency](https://www.blossomstreetventures.com/post/2024-saas-cash-efficiency-metrics?ref=b2bcentr.com).