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Annual Recurring Revenue (ARR) growth rate is the single most important metric for SaaS fundraising and benchmarking. Investors, analysts, and buyers all start with this number — how fast are you growing your predictable annual revenue?
How to calculate ARR growth rate
ARR growth rate = ((Current ARR − Previous ARR) / Previous ARR) × 100
If your ARR was $600k a year ago and is $1.2M today, your YoY growth rate is 100%. You doubled in 12 months — which is the first threshold of the T2D3 framework.
What is T2D3?
T2D3 is a benchmark path for high-growth SaaS companies, popularized by Neeraj Agrawal at Battery Ventures. Starting from ~$1–2M ARR, the path is: - Year 1–2: Triple ARR (300% of starting ARR) - Year 3–5: Double ARR each year
A company that hits T2D3 from $1M ARR reaches: $3M → $9M → $18M → $36M → $72M over five years. This trajectory is what top-tier VCs look for when evaluating Series B and later-stage SaaS investments.
Rule of 72 for ARR doubling time
A quick mental shortcut: divide 72 by your annual growth rate to estimate how many years to double. At 50% growth, you double every 1.4 years. At 25%, every 2.9 years. At 10%, every 7.2 years.
Benchmarks by ARR stage
| ARR stage | Expected growth | Excellent |
|---|---|---|
| < $1M | 100%+ | 200%+ |
| $1M–$5M | 80–150% | 200%+ |
| $5M–$20M | 60–100% | 150%+ |
| $20M–$50M | 40–80% | 100%+ |
| $50M+ | 25–50% | 70%+ |
Growth naturally slows as ARR increases — the denominator gets larger. That's why investors look at growth efficiency (ARR growth / net burn) rather than growth rate alone at later stages.
How to use this calculator
Enter your current ARR and your ARR from 12 months ago. The calculator shows your YoY growth rate, 3- and 5-year projections if you maintain this rate, and the number of years to reach any target ARR you set.
What does this calculator do? Calculate your Annual Recurring Revenue growth rate, T2D3 trajectory, and years to reach your ARR target.