Small business-to-business (B2B) companies have had a steady year for growth in 2024.
According to the Maxio Institute, the research division of the billing and financial operations platform Maxio, many private B2B companies are maintaining a healthy annualized growth rate of 15%, though quarter-over-quarter growth has slowed slightly.
“Companies generating less than $1 million in annual revenue continue to rebound from their late 2022 low point, growing 23% in Q3 compared to a more modest 12% growth for those exceeding $1 million,” the institute reports.
This analysis is based on billing data from over 2,400 Maxio customers, representing $18 billion in annual billings in Q3 2024.
5 key insights for small B2B companies
- Growth remains strong but decelerating. While growth remains healthy at 15% annually, quarter-over-quarter rates are softening.
- Pricing model gaps narrowing. Differences in growth rates between usage-based and fixed-rate pricing models have diminished significantly in 2024 as the market slows.
- Investor behavior shifts. Rising capital costs have led to fewer venture investments, though average deal sizes have increased. A new “funding trifecta” is emerging: the fastest-growing private companies are those that have reached Series B, raised over $10 million, and secured funding within the past three years.
- Revenue milestones are increasing. The average B2B company that raised venture funding in 2024 reported $13.5 million in annual recurring revenue (ARR), a significant leap from under half that value just two years ago.
- Artificial intelligence (AI) companies see robust funding. Since 2020, 80% of AI-focused companies have secured funding, with 15% doing so in 2024. The average funding raised since 2020 is $51.9 million, with Series C rounds accounting for 25% of total funding activity.
“During 2022 and 2023, fixed-rate companies outpaced their usage-based counterparts in growth. However, the past two quarters have seen this gap narrow,” Maxio adds. “Mid-2024 is marked by more uniform growth rates across demographic and pricing models, though future quarters will reveal whether this trend persists.”
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