The Hypergrowth Startup Index 2025: Part 2
The Anatomy of a Fast-Growing Company in 2025
The numbers behind the fastest-growing startups
Every industry operates differently, and every investor has different expectations for their portfolio companies based on growth strategy. Using PitchBook data, we’ve pulled benchmark data for major industry groups as a reference point.
Commercial services companies lead the way with an average 30% growth rate, outpacing more technology-focused sectors. Consumer durables aren’t far behind at 29%. Healthcare is well-represented in the industry groups with the fastest growth rates, making up four of the 10 industry groups with average growth rates between 22% and 25%.
How do VCs predict and evaluate growth rates?
How investors look at growth targets varies from firm to firm. At Stage 2 Capital, Roberge explains, "We have a long conversation with our founders out of the gate about their five-year scale plan. You can see their mentality around growth — whether they'll fall for the 100-150X valuation and get greedy, or focus on predictable growth.
“One thing we do that's unique is challenge how our portfolio companies determine growth targets. You talk to a business at $2 million, and ask what they're planning for next year. They say '$6 million.' Why? 'Because that's what Databricks did in their third year' or 'Because that's what our VC said we need to do to stay within their IRR.' That's a critical strategic decision that determines everything — how many reps you'll hire, how many support people, how many engineers, how much property.
“So we do a bottoms-up analysis to understand the realistic inputs. What pace are you hiring reps at? What pace has demand been created? You can't go from generating 100 SQLs a month to 10,000 overnight. We take those inputs and increase them by 10-25% for a good baseline plan. With great execution, maybe those inputs increase by 40% for a best case. If execution suffers, or there are unexpected variables like the economy or competitive landscape, you might have a worst case plan. Then, in Q1, they miss the plan by 20%. So many companies think, ‘Increase hiring, hire more reps, we’re broken.’ But they’re just digging a deeper hole, and putting themselves out of business.
“We put together a scale operating system, and increase inputs by 10-20%. Then, we put together a home run plan and a bad plan and set Q1 milestones. What green outcomes would justify doubling the hiring plan? What yellow signs tell us to stay the course? What red flags mean we need to halt and fix things?”
Energy is the fastest-growing industry sector, with an average growth rate of 37%, followed by information technology at 36%, and B2B products and services at 35%.
B2B marketing software company, Goldcast, is known as a "Minicorn," valued above $1M with the possibility to become a unicorn in the coming days. Kishore Kothandaraman, co-founder, has noticed an increasing interest in metrics like growth rate as they’ve scaled. “As we progress to a growth-stage company, there has been a lot more emphasis on metrics (i.e, growth rate, NRR). This becomes even more important at double-digit million ARR as investors are pattern matching to see if your business can be a venture scale business (i.e can grow 30% at $500M ARR, which is expected at public markets to command a good multiple).”
At G2, quality reviews are their North Star metric. “We’re proud to have crossed the $100M ARR threshold over a year ago,” says Godard Abel. “We’re now accelerating our growth by launching new digital AI-powered products to provide more affordable self-serve and advertising solutions to our smaller customers. In addition to tracking our revenue, we’ve always looked at the number of trusted quality reviews we generate as a North Star measure (now we have nearly 3M trusted software reviews!). We continue to focus on ensuring that all software products listed on G2 build a critical mass of software reviews.”
Despite their low volume, IPOs saw the largest average deal size at $83.3 billion (notably skewed by the OQBI IPO), followed by public investment second offerings at an average of $12.3 billion. Mergers and acquisitions, which represented 43% of exits in 2024, averaged $5.08 billion per deal.
AI is impacting startup growth
Investors are increasingly interested in both AI-based startups, and those using AI to build and promote their products. “There's a debate — if you're going to use AI, will it be more powerful to embrace and adopt in your product offering, or in your internal operations?” says Roberge. “I think there’s a huge argument for the latter. It's hard for the incumbents to do it because it means moving people around and changing processes. If you're an entrepreneur with a clean slate, you've got the chance of a lifetime to really leverage that.”
On the other hand, “The bar is incredibly high to stay current,” says McGinnis. “AI is moving fast, and cost efficiency is still a challenge. Winning these deals is tough, but [at Balderton Capital], we’ve been investing in AI for years — companies like Wayne, Photoroom, Deepset, Writer AI, and Convergence AI. We’re deeply embedded in the ecosystem.”
From the founder’s perspective, “AI has been a game-changer for our growth,” says Kothandaraman. “Most of the authentic human-led video content in B2B happens via events, webinars, podcasts, and customer marketing assets. While we have two products to enable marketing teams to run events and webinars and create podcasts and customer testimonials, marketing teams still struggle to figure out how to repurpose and amplify those long-form video assets without letting them collect dust. So we enabled two workflows: our Content Lab product that autonomously cuts the video into short form clips for different social media platforms, blog posts, and more, along with our AI Search product that can semantically search across the entire video library and create content through simple prompts. These two have been adopted so quickly that it has led to an increase in win rate and our expansion metrics.”
As Abel shares, the same is true for G2. “In early 2023, we launched our AI software buying assistant — Monty — on top of G2’s comprehensive dataset to create the ultimate software-buying assistant to help buyers discover, research, and buy the best-fit software solutions that will fuel them to their next peak of productivity and success in the age of AI. Our trusted G2 data signals, which software vendors rely on to reach in-market buyers and inform their go-to-market strategies, will become even more powerful in an age of AI. With G2’s Sales agent—which functions as a dedicated AI sales representative—software companies can quickly and easily educate, prequalify, and convert buyers at scale.
“We’re constantly looking for new ways to improve the experience for all stakeholders in the B2B software ecosystem, including buyers, sellers, investors, and consultants. For example, we recently introduced AI-powered localization to help buyers find the best software for their business with locally relevant content. We’re also adding AI insights and questions to all G2 categories as software buyers around the world now want to know which AI software they can trust to automate their business processes.”