Definition: The degree to which a SaaS company's revenue depends on a small number of customers. Measured via HHI (Herfindahl-Hirschman Index).
High revenue concentration is the #1 hidden risk in SaaS acquisitions. A company with 40% of revenue from 3 customers has a fragile revenue base — losing one could crater valuation. The HHI score quantifies this risk. Scores above 2,500 signal 'highly concentrated' and warrant a discount to valuation.
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Try ChurnLens Free →The degree to which a SaaS company's revenue depends on a small number of customers. Measured via HHI (Herfindahl-Hirschman Index).
High revenue concentration is the #1 hidden risk in SaaS acquisitions.