Which Business Models Raise the Most Funding? [Investor Data]

Based on real investor behavior and industry funding data, we’ve broken down 30 stats that reveal exactly which business models are pulling in the most capital. Each stat is followed by a clear, deep dive to help you understand why it works — and how you can apply it.

1. SaaS startups receive 2.5x more funding on average than non-SaaS tech startups

Why SaaS dominates investor interest

Software-as-a-Service (SaaS) has completely changed the way software is sold. Instead of one-time purchases, SaaS allows businesses to charge monthly or yearly, making revenue predictable and scalable.

Investors love this because it lowers risk. Recurring revenue makes it easier to forecast future performance, which makes valuations easier and safer.

What makes SaaS so fundable

Recurring Revenue: Investors love dependable income. If you bring in $100K every month, that’s a strong sign your model works.
High Margins: SaaS companies often enjoy margins above 70%.
Customer Retention: Good SaaS models keep users paying for years.

Actionable tips if you’re building a SaaS

Focus on a niche. General SaaS is crowded.
Prove your Monthly Recurring Revenue (MRR) as soon as possible.
Keep churn below 5% monthly.
Use metrics like CAC (Customer Acquisition Cost) and LTV (Lifetime Value) to build trust with investors

2. Marketplaces account for over 40% of unicorns valued above $1B

The rise of platforms

Marketplaces like Airbnb, Uber, and Etsy connect buyers with sellers. This two-sided model is hard to build but very valuable once scaled.

Unicorn-level investors love them because they create massive value without owning inventory.

Why they raise big rounds

Network Effects: As more users join, the platform becomes more valuable.
Asset-light: No need to stock goods or services.
Scalable: Can serve 10 users or 10 million without changing core operations.

How to impress investors with your marketplace

Show both supply and demand traction.
Build trust mechanisms (ratings, reviews, buyer protection).
Highlight liquidity: how fast does a user get matched?
Show retention and repeat transactions.

3. Direct-to-consumer (DTC) brands raised over $20B in VC funding in the last 5 years

Why VCs love DTC

DTC brands go straight to the consumer, cutting out the middleman. Think Warby Parker or Glossier.

They control branding, customer experience, and pricing. And when done well, their growth is fast and efficient.

What investors want to see in DTC

Strong brand identity: This is your moat.
Customer acquisition efficiency: Can you grow without burning cash?
Loyalty: Repeat purchases are key.

Tactical advice

Focus heavily on brand storytelling.
Own your customer data — avoid third-party reliance.
Invest in packaging and unboxing experience; it’s part of retention.

4. B2B models attract 60% more funding than B2C models on average

B2B wins long-term trust

Business-to-business (B2B) companies are loved by investors because they sell higher-ticket items and often lock in long-term contracts.

These deals may take longer to close, but once landed, customers tend to stay longer.

Why investors like B2B

Longer LTV: Clients often stay for years.
Higher ARPU: Average Revenue Per User is typically much higher.
Budgeted Spend: Businesses often have set budgets for tools or services.

Building a fundable B2B business

Start with a clear niche (ex: HR software for law firms).
Build case studies to prove ROI.
Show how your product becomes a “need,” not just a “nice-to-have.”

5. Fintech companies raised $210B globally between 2019–2024

Fintech is booming

Finance is being disrupted at every level—payments, lending, investing, insurance. Fintech is hot because it tackles massive markets.

But it’s not just hype. The numbers show consistent growth and investor interest.

What makes fintech attractive

Huge TAM (Total Addressable Market): Everyone uses money.
Regulatory moats: Hard to copy if done right.
Sticky behavior: Once users move their money, they stay.

Tips for fintech founders

Get compliance right from day one.
Choose your wedge: P2P, payments, credit scoring, etc.
Focus on mobile-first design — most users start there.

6. Subscription-based businesses have a 3x higher likelihood of receiving Series A funding

The beauty of subscriptions

Whether it’s software, content, or even food — the subscription model keeps cash flowing.

Investors love the visibility into future revenue and the ability to scale easily once product-market fit is achieved.

Why it works

Predictability: Easier to model growth.
User habit formation: Subscriptions become routines.
Lower CAC over time: Retained users are cheaper to keep than new ones to acquire.

Tips to raise on this model

Keep churn low from the start.
Use trial periods to hook users.
Build in upsells — can you upgrade users to higher tiers?

7. AI-focused SaaS businesses raised 1.7x more than traditional SaaS in 2023

AI is the future — and the present

Artificial Intelligence isn’t just hype anymore. When integrated into SaaS, it creates features that are smarter, more efficient, and harder to replicate. This makes AI-SaaS startups incredibly attractive to investors.

Why AI-SaaS gets more capital

Better differentiation: You’re not just another CRM — you’re a predictive CRM.
Efficiency gains: AI automates tasks that used to take teams.
High defensibility: Proprietary models or datasets are hard to copy.

Tactical advice for AI-SaaS founders

Focus on a clear use case — don’t try to do everything with AI.
Prove your AI actually works with case studies and metrics.
Get real-time feedback from early adopters.
Use open-source models only if you have a unique data advantage.

8. Enterprise software businesses average $30M in Series B funding rounds

Enterprise-scale means enterprise-size checks

Enterprise software solves big problems for big companies. That means big contracts, long-term revenue, and complex integration — all of which make investors eager to fuel growth.

Why VCs back enterprise software hard

High contract values: Six- and seven-figure deals aren’t uncommon.
Long sales cycles but long retention: Once you’re in, you’re hard to replace.
Customizable solutions: Tailored platforms serve unique needs.

How to build a fundable enterprise SaaS

Build relationships, not just leads — enterprise deals take time.
Invest early in security and compliance.
Get a strong enterprise sales team.
Focus on integrations with other enterprise tools.

9. Cloud-native platforms raised 75% more capital than on-premise software startups

Why “cloud-first” is now the standard

Cloud-native software isn’t just hosted online—it’s built for flexibility, scalability, and performance. Startups that embrace this architecture raise more because they align with the modern infrastructure stack.

What makes cloud-native models win

Speed to deploy: No need to install software on local servers.
Global access: Serve users anywhere, instantly.
Lower upfront cost: Makes adoption easier for customers.

Founders’ checklist

Make sure your solution scales well on cloud infrastructure.
Offer API-first design to support integrations.
Use cloud certifications (AWS, Azure) to build trust with investors.
Emphasize uptime and reliability in your pitch.

10. Consumer marketplaces raised $65B globally in 2021 alone

People love platforms that connect them

Consumer marketplaces are easy to understand and solve real-world problems. Whether it’s booking a ride, renting a home, or buying vintage goods — these models scale fast and raise big.

What fuels this model

Clear problem-solving: It’s obvious what value is being delivered.
Scalable unit economics: Once the platform is built, each transaction costs less.
Powerful network effects: More users = more value.

How to make it work

Solve a real trust problem — think reviews, identity verification, etc.
Make the first few transactions delightful.
Balance both sides of the market — supply and demand must grow together.

11. SaaS businesses receive an average valuation of 10x–15x ARR (Annual Recurring Revenue)

The valuation magic of SaaS

Investors don’t just love SaaS for the revenue; they love it for the multiples. If you’re doing $1M in ARR, your valuation could hit $10–15M. That’s rare in other models.

Why ARR multiples are so high

Predictable cash flow: Makes the business easier to model.
Low churn = high confidence.
High margin structure: More profit means more room to grow.

What you can do

Nail your metrics. Know your MRR, ARR, CAC, LTV, and churn.
Don’t inflate your ARR — it must be real, not projected.
Highlight upsell and cross-sell potential in your pitch.

12. Freemium business models outperform traditional paid models by 2x in attracting early-stage investment

Why giving it away can work

Freemium gets people in the door. It’s a low-risk way to grow fast and prove product-market fit. Investors see rapid user growth and know you can monetize later.

Why freemium wins

Low barrier to entry: Users don’t need to commit money up front.
Viral growth: People share free tools faster.
Monetization optionality: You can add tiers, ads, or premium tools later.

How to build a strong freemium model

Make sure the free tier delivers real value.
Create urgency to upgrade — not through paywalls, but through added benefits.
Monitor how users convert — optimize the journey.
Don’t overload with too many features upfront.

13. E-commerce platforms using vertical integration raised 2.3x more than standard dropshipping models

Owning more of the stack = more value

Vertical integration means you control everything—from production to delivery. That may cost more, but it raises investor confidence in your quality, margins, and long-term scalability.

Why investors like vertical e-commerce

Better customer experience: You own delivery, packaging, and returns.
Stronger margins: No middlemen means more profit.
Brand control: You’re not just a storefront — you’re the product.

Actionable tips

Start small: vertical doesn’t mean you need 10 factories.
Build direct relationships with manufacturers early.
Automate fulfillment and inventory where possible.
Tell your full-stack story clearly when pitching.

14. On-demand service platforms (like ride-sharing) raised over $100B in the last decade

The power of instant gratification

Whether it’s a ride, a cleaner, or a massage — on-demand services are big money. They promise speed and ease, which modern consumers love. And investors know it.

Why it works

High frequency of use.
Tech-enabled logistics: Real-time tracking and fulfillment.
Scalable across cities and markets.

How to build this model

Solve a real pain point, not just a want.
Focus on speed — how fast can you deliver?
Localize operations. One city at a time.
Use data to improve matching and reduce wait times.

15. Blockchain-based platform models attracted $33B in VC in 2021–2022

Blockchain isn’t just crypto

Platforms using blockchain for contracts, identity, payments, and provenance are gaining serious ground. These are not coin projects — they’re infrastructure plays.

Why VCs poured in

Decentralization = new trust layers.
Token incentives create user alignment.
Programmability = innovation.

What to focus on as a blockchain founder

Prove your use case — don’t rely on hype.
Focus on UX — blockchain still feels hard to use.
Be regulation-aware from the start.
Consider tokenomics carefully — it’s part of the model, not an afterthought.

16. B2B subscription companies had a 55% higher Series C closure rate in 2023

B2B subscriptions = long-term growth engines

When a business sells subscriptions to other businesses, it creates deep, sticky revenue that grows year after year. Investors love this model because it shows signs of maturity and long-term potential—especially by the time Series C comes around.

Why these companies close Series C easier

Proven retention: B2B customers rarely churn fast.
Expansion potential: One client can become a multi-seat deal.
Data-rich: Years of usage give insight into upsell and cross-sell.

What you need to show at Series C

High Net Revenue Retention (NRR) — 120%+ is excellent.
A clear path to enterprise deals if you’re not there yet.
A sales team that’s scalable and repeatable.
Multi-product or multi-market expansion plans.

17. Enterprise SaaS represents 60% of all SaaS unicorns

Enterprise + SaaS = unicorn material

SaaS is powerful. Enterprise SaaS takes it up a level by targeting large companies with large budgets. That’s why a huge share of SaaS unicorns live in this space.

Why this model breeds billion-dollar companies

Big contracts: $100K+ per year isn’t uncommon.
Lock-in: Switching tools is painful, so clients stay.
Custom features: You can charge more for specialized add-ons.

How to follow their path

Choose an enterprise problem that’s urgent and expensive.
Build around workflows, not just features.
Invest in white-glove onboarding.
Nail SOC 2, GDPR, and other security frameworks early.

18. Healthtech startups using SaaS or platform models raised $45B in 2022 alone

Tech + healthcare = explosive growth

Healthcare is ripe for disruption. Combine that with the scale and predictability of SaaS or platform models, and you’ve got a fundraising magnet.

Why investors are bullish on healthtech SaaS

High impact: Life-saving or efficiency-improving tools attract attention.
Recurring revenue from clinics and providers.
Strong moat: Regulatory approvals create barriers to entry.

For founders in healthtech

Choose one vertical (mental health, diagnostics, patient records, etc.).
Partner with providers early and build trust.
Emphasize outcomes, not just usage.
Make compliance a competitive advantage.

19. Ad-based business models raised 50% less than subscription or transaction-based models

Ad revenue is out of favor

Yes, Google and Facebook built empires on ads. But today’s startups don’t get the same investor love. Why? Ads are unpredictable, depend on huge user bases, and often hurt user experience.

Why investors hesitate

Revenue is tied to traffic, not retention.
CPMs fluctuate wildly.
Privacy changes (like iOS updates) can kill performance overnight.

What to do if you’re ad-based

Layer in subscriptions or in-app purchases.
Focus on niche audiences advertisers will pay more to reach.
Build owned channels — don’t rely just on social platforms.
Prove you can monetize without hurting user trust.

20. Fintechs using a B2B2C model saw a 40% higher Series A success rate

B2B2C = high reach, smart scale

Instead of selling to consumers directly, B2B2C fintechs sell to businesses that serve consumers. Think of a payroll platform that offers employee savings tools, or a bank backend for apps.

Why this model works

Distribution through partners = faster growth.
Shared customer acquisition costs.
Better product-market fit across segments.

How to build this well

Make your product plug-and-play for partners.
Choose distribution partners with existing trust.
Create value for all sides — your partner must win too.
Avoid custom builds for every client unless it pays well.

21. SaaS with AI integration grew funding by 80% YoY between 2022–2024

AI is no longer optional

Investors aren’t just curious about AI—they expect it. SaaS companies that blend AI into their core functions are showing massive growth and landing larger funding rounds.

Why this trend is accelerating

AI drives automation = higher ROI for users.
Companies want insights, not just data.
It enhances personalization at scale.

To stand out with AI-SaaS

Be specific. “AI-powered” means nothing unless you show the use case.
Use data unique to your product — that’s your edge.
Continuously improve the model using feedback loops.
Show performance benchmarks versus non-AI competitors.

22. Open-source software companies using commercial add-ons raised $5.4B in 2023

Community + monetization = open-source gold

Open-source used to mean “free forever.” Today, companies build open-source cores and offer paid features, support, or hosted services on top. Investors love the adoption scale and monetization clarity.

Why it works

Adoption is faster — people can try before they buy.
Community-driven improvements reduce dev costs.
Paid tiers scale with usage.

Building a strong model

Create clear value between free and paid versions.
Use GitHub or forums to collect user feedback early.
Provide seamless paths to upgrade.
Offer hosting or security layers for enterprise users.

23. Vertical SaaS (industry-specific) receives 1.5x more investor interest than horizontal SaaS

Specificity wins funding

Instead of building a general tool for everyone, vertical SaaS focuses on one industry—like real estate, restaurants, or manufacturing. Investors like this because it shows depth, not just breadth.

Why it attracts more interest

Less competition: You’re not fighting Salesforce.
More loyal customers: They see you as “built for them.”
Deeper integrations = more stickiness.

Tips for founders

Talk like your users. Know their workflows inside out.
Tailor onboarding, support, and pricing to the niche.
Don’t expand horizontally too soon — own your vertical first.
Partner with industry-specific resellers or influencers.

24. Hardware-as-a-Service (HaaS) models grew in funding by 60% in 2023

Hardware meets predictability

Instead of selling a device once, HaaS companies lease or rent them with ongoing service. Think printers, wearables, or medical devices with cloud connections. Investors love the blend of physical and recurring revenue.

Why HaaS is hot

Smooths out cash flow.
Locks in long-term customers.
Allows for remote diagnostics and upgrades.

Building a HaaS business

Get unit economics right — margin must be healthy.
Offer a clear value in the ongoing service, not just the device.
Use financing partners for upfront costs if needed.
Highlight retention rates and lifetime value in your pitch.

25. APIs as a product (API-first businesses) raised over $15B between 2020–2023

APIs are the plumbing of the internet

From Stripe to Twilio, API-first startups are enabling others to build faster. These businesses don’t serve end-users directly—they power other apps. The simplicity and scalability are huge draws for investors.

Why API-first models raise big

Usage-based pricing scales well.
Low-touch sales = efficient growth.
Developers love easy-to-integrate solutions.

To win as an API-first company

Make documentation your superpower.
Track and showcase usage metrics.
Offer dashboards to clients with real-time usage and billing.
Keep latency and uptime top-notch — developers will notice.

26. Freemium SaaS startups have a 25% higher seed-to-Series A conversion rate

Starting free can get you funded faster

Freemium SaaS products make it easy for users to get started, build habits, and eventually upgrade. That ease of access is also why more freemium startups get from seed to Series A—they prove traction quicker.

Why this model works early on

User growth signals PMF (Product-Market Fit).
Early feedback = faster iterations.
Metrics like MAU and DAU drive early investor confidence.

Building a freemium model that scales

Let users get real results from the free version.
Define a clear upgrade path — it should feel like a natural step.
Make data collection seamless so you can measure engagement.
Don’t wait to monetize — experiment with pricing early.

27. Decentralized finance (DeFi) platforms averaged $20M+ per Series A round in 2022

The new frontier of finance is decentralized

DeFi platforms are reshaping how we borrow, lend, and earn—all without banks. Despite regulatory questions, investors backed these platforms heavily because of their high engagement and potential to disrupt huge markets.

Why DeFi attracted large Series A rounds

Capital efficiency via liquidity pools.
Token mechanics drive user growth and loyalty.
Global, permissionless systems.

How to build a fundable DeFi platform

Focus on security — smart contract audits are non-negotiable.
Build real use cases (not just token speculation).
Engage your community — DeFi is social at its core.
Be transparent — dashboards, audits, and documentation matter.

28. Multi-sided platforms raised 2x more in late-stage funding rounds than single-sided businesses

Connecting multiple user groups is valuable

Multi-sided platforms (like marketplaces, ad networks, or payment systems) serve multiple types of users at once. That complexity, when solved, becomes a huge moat. Late-stage investors love the scale and network effects.

Why they raise more in later rounds

Strong network effects.
Cross-selling and upselling opportunities.
Platform resilience — if one side slows, others can grow.

What founders need to scale this model

Solve one side deeply before expanding.
Use incentives to grow both supply and demand.
Track metrics separately — engagement by user type.
Build internal teams focused on each audience segment.

29. DTC subscription brands raised 35% more than traditional e-commerce DTCs

Subscriptions give DTC brands staying power

Selling direct-to-consumer is already attractive—but adding a subscription layer makes it even more fundable. Why? Predictable revenue, better customer data, and improved retention.

Why investors pay a premium

LTV is higher.
Churn is more manageable.
Cash flow becomes smoother.

How to win with DTC subscriptions

Make delivery cadence flexible — don’t lock people in.
Offer personalization — tailor the experience over time.
Use post-purchase flows to suggest bundling or upgrades.
Analyze churn triggers and fix them quickly.

30. SaaS startups in Fintech and Cybersecurity raised the highest average deal sizes across all models

Mission-critical + recurring = investor gold

When SaaS meets fintech or cybersecurity, it becomes non-optional. Businesses can’t run without secure infrastructure or financial tools. That’s why deal sizes here are consistently the highest.

Why this combo works so well

High urgency: Everyone needs secure systems and clean financial ops.
Complex problems: Makes competition lower and defensibility higher.
Huge market sizes: Every business needs them.

Tips if you’re in this space

Get credibility early — white papers, certifications, expert advisors.
Focus on outcomes — what pain do you eliminate?
Use real-world case studies to highlight your product.
Expect longer sales cycles — but much stickier retention.

Conclusion

If you’re building a startup and hoping to raise funds, your business model matters more than you might think. The data shows clear trends—investors are doubling down on recurring revenue, sticky user behavior, and models that scale without burning cash too fast.