# It's no secret that SaaS is a popular choice among investors and businesses. We've seen actors like Salesforce Ventures and Accel invest heavily in SaaS-based platforms for the past several years.#

Software as a service (SaaS) is one of the most successful business models today, with an average return-on-investment (ROI) of 2x.

This article will discuss five reasons driving investments in SaaS-related products and opportunities.

1) The market for SaaS is large and growing

Let's look at some numbers.

According to industry experts, the global market for SaaS-related products is expected to reach ~$300 billion in the coming years at a CAGR of ~20-22%.

With the industry growth rate increasing, it's no wonder SaaS is such a popular choice with investors.

2). Recurring revenue

A key reason venture capital firms are especially interested in SaaS businesses is that it allows them to invest in a global market with sizeable recurring revenue opportunities.

This type of investment model is desirable for VCs because it allows them to invest in companies that bring in revenue daily.

3) SaaS model promotes "network effects":

Network Effects are a powerful driver for SaaS businesses.

This is why many of today's top SaaS companies have built their initial product around user-generated content or on top of existing social networks.

We see this with Slack, which continues to add integrations into many other products to help bolster their network of users; or Dropbox, which focused on building consumer awareness via referral marketing.

4) SaaS encourages scalability

The most successful companies today can provide a product or service their clients need on a global scale.

For example, suppose you're selling your SaaS-based analytics platform to global Fortune 500 companies instead of just local small and midsize businesses (SMBs).

In that case, the software needs to scale up as new customers come on board.

Although this is a significant challenge for any software, SaaS-based models come with built-in scalability.

5) There are more potential exit strategies

In a capitalist economy, businesses need to make money and find an exit strategy to see their total return on investment (ROI).

More options for an exit strategy means VCs can potentially make their money back faster.

As we've seen in recent years, this model continues to attract attention across multiple industries, and many professional services firms are looking for ways to leverage SaaS in their business.

But though SaaS is growing in popularity, it's important to remember that this model isn't suitable for every organization.

SaaS is often the right choice for software companies or tech-based startups, but SaaS may not be the best option for all companies.

We'll explore other SaaS-related products, services, trends, growth opportunities, and technologies in future articles.

#saasproduct #saasmanagement #saasgrowth #investment