Glossary
Net Revenue Retention (NRR)
A measure of how much existing customers expand or contract their spend over time — the single most predictive metric for SaaS Series A valuation in India.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
Net Revenue Retention (NRR) measures how revenue from a fixed cohort of existing customers changes over a 12-month window — including upsell, cross-sell, downgrade, and churn. NRR is expressed as a percentage: 100% means flat; 120% means customers grew their spend 20% net of all churn and contraction.
Formula: NRR = (Starting Revenue + Expansion - Contraction - Churn) / Starting Revenue × 100. NRR is measured per cohort, then aggregated.
India Context
NRR is the single most predictive metric for Indian SaaS Series A valuation in 2026. Companies with NRR >120% raise Series A at 8-10x ARR; those with NRR 100-110% raise at 4-6x ARR; those below 100% rarely close at all. Series A diligence will dig into NRR by cohort to verify the headline number isn't masking deteriorating performance in newer cohorts.
Best-in-class Indian B2B SaaS NRR: 130%+. Median: 105-115%. Bottom quartile: under 100%.
Example
A vertical SaaS startup has 100 customers paying ₹10L ARR each = ₹10Cr cohort starting ARR. After 12 months: 5 customers churned (₹50L lost), 30 customers expanded by 30% on average (₹90L added), no contraction. NRR = (₹10Cr + ₹90L - ₹50L) / ₹10Cr = 104%.
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