ARR

ARR (Annual Recurring Revenue) is the annualised value of a SaaS or subscription company's current contracted revenue. It is calculated as: MRR (Monthly Recurring Revenue) × 12. ARR is the standard metric for measuring the size and growth of subscription businesses.

ARR includes only recurring, contracted revenue — it excludes one-time setup fees, professional services, or usage-based revenue (unless contracted as a minimum). The key questions around ARR: growth rate (% increase month over month), net revenue retention (does existing ARR grow or shrink over time?), and ARR per customer (average contract value).

ARR is not cash in hand — a company can have ₹10 crore ARR but have collected only ₹3 crore in cash if contracts are billed annually and signed mid-year.

Indian B2B SaaS ARR benchmarks in 2026: seed investors look for ₹50 lakh–₹1 crore ARR before committing. Series A requires ₹3–12 crore ARR for the earliest conversations; ₹8–15 crore ARR for a quality Series A. Series B typically requires ₹30–100 crore ARR.

A specific India issue: ARR vs. contracted ARR vs. recognised revenue. Some Indian startups conflate annual contract value (signed but not yet billing), ARR (currently billing), and recognised revenue (per accounting standards). Investors will ask for all three — know the difference.