Net MRR Retention – Do Your Customers Want to Stay? A Key Metric at Series A Stage 

At the pre-seed and seed stages, cash and runway were the most important. 
But as your startup approaches Series A, investors begin to ask a different question: 

Do your customers want to stay – and are they spending more over time? 

The answer lies in one metric: Net MRR Retention (NMRR)
It’s one of the most critical indicators of SaaS business health and a fundamental part of your valuation during Series A. 

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What is Net MRR Retention? 

Net MRR Retention is a metric that shows how your recurring revenue from existing customers changes over time. It includes: 

  • Churn – customers who canceled our product or service 
  • Contraction – clients who have downgraded their package or scope of service with us, 
  • Expansion – customers who upgraded or added features/modules,  
  • Reactivation – returning customers (optional, depending on methodology). 

🔎 In short: Are your customers staying – and growing with you? 

Why is Net MRR Retention so important? 

1. It proves your product delivers value 

High net retention signals that: 

Customers see value, 

They want to stay, 

And they’re spending more. 

Low retention = red flag: something’s wrong – the product, onboarding, support, or pricing. 

2. It reveals growth potential 

If your MRR grows even without new customers, you have a truly scalable model. 
A well-managed customer base can drive consistent growth via upselling and cross-selling

3. Investors use it for valuation 

Net MRR Retention above 100% is the “holy grail.” 
It means expansion revenue (larger purchases by clients in your company) exceeds churn.

This: 

  • Builds trust among investors toward your business 
  • Reduces investment risk, from a perspective of someone who will invest 
  • Increases your company’s valuation. 

How to interpret Net MRR Retention? 

It varies by industry, but for B2B SaaS, the general rule of thumb is: 

NMRR Value Meaning 
< 90% Alarm! Customers are leaving or not scaling. Take action now. 
90–100% Stable base. Work on expansion and loyalty. 
100–110% Very good. Customers are growing with you. 
> 110% Excellent! Healthy business and highly attractive to investors. 

What impacts NMRR and how to improve it? 

Product & onboarding – Does the customer see value from the start? 

Customer Success – Is there someone to support the client when needed? 

Pricing & packaging – Are you encouraging greater usage or upgrades? 

Customer feedback  Are you listening and responding to their needs? 

It’s not just a sales metric – it reflects the entire organization. 

How should a founder manage this metric? 

Don’t just focus on acquiring new customers – nurture the existing ones. 

Communicate regularly with Product and Customer Success teams – their work directly affects NMRR. 

Implement upselling strategies – offer new features, packages, or modules. 

Analyze churn – Who is leaving? Why? What can be improved? 

Summary – Net MRR Retention is the Pulse of Your SaaS Business 

✅ Reflects the true value of your product 
✅ Helps forecast and plan sustainable growth 
✅ Directly impacts your Series A valuation 
✅ Brings together product, finance, and customer success 

The Role of an External CFO 

Founders often see overall revenue growth but don’t dig into the structure of MRR
At incro, our role is to: 

  • Precisely calculate NMRR and its components, 
  • Segment customers (where’s the churn? where’s the expansion?), 
  • Provide actionable insights and recommendations, 
  • Connect financial data with product and sales strategies. 

Because real growth doesn’t depend solely on acquiring new customers – it depends on whether your current customers stay and grow with you. 

At incro, we help service-based businesses bring order to financial chaos. Our experts combine controlling, business intelligence, and strategy – acting as your external finance team. 

💬 Book a free consultation: https://incro.us/contact/ 

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