The new growth indicator is taking place rounds in Silicon Valley. This shows how enthusiastic investors have turned out about the AI generated.
With a new state in the AI 2025 report, Bessemer Venture Partners has introduced a growth benchmark that sets the high standards for today's AI startup ecosystem.
Called Q2T3 – short for quadruple, quadruple, triple, triple – This metric shows a dramatic departure from more measured growth expectations in the SaaS era, represented by “T2D3”.
“We share these clearly whimsical new benchmarks to showcase the reality of standout AI startups in the moment,” writes Bessemer.
Bessemer did not name any particular startups. However, the company said it came up with this new metric by studying its portfolio including Abridge and Cursor, as well as 20 high-growth AI startups since then.
Escalation of expectations
Bessemer typically releases a “cloud state” report each year. This year, VC companies changed it to “AI state.” This is a sign of how much AI is changing the tech industry, suppressing cloud computing and putting pressure on established software business models.
T2D3 has become the North Star of SaaS startup over the past decade.
This metric required startups to triple their annual recurring revenue in their first year and try again in their second year. They then had to double the arr in their third year and repeat the feat in their fourth and fifth years.
In theory, this would give you an ARR of $1 million or $2 million to over $100 million over about 5-6 years.
Bessemer believes T2D3 is being rapidly ingrained by AI-Native companies. This shows unprecedented speed thanks to the unique dynamics of the AI generated, rapid product cycles, explosive user demand and new distribution channels.
Enter Q2T3, which is a much more aggressive trajectory. According to Bessemer, the new benchmark reflects a faster path for AI startups to register quadruple income in their first and second years with triple ARRs in four and two years.
This means increasing ARRs from $3 million to over $100 million in just four years, and more feats afterwards are feats that redefine the meaning of overgrowth in a post-chat grit world.
“Shooting Star” vs. “Supernova”
Bessemer's Q2T3 model is based on a new archetype called “shooting stars.” These are AI startups that grow faster and faster than SaaS counterparts, while maintaining capital efficiency, total solids margin (~60%) and strong product market fit.
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According to Bessemer, these startups achieved around $3 million in the first year of monetization and about $164,000 per employee at ARR.
Some AI startups are growing even faster, reaching an ARR of $100 million in five years. Bessemer calls these “supernova” startups.
“These are the most exciting and most frightening startups we see at one time,” the venture capital firm wrote in its report.
These numbers can often be driven by rapid adoption where revenues may be vulnerable and may not reflect lasting value. Low switching costs, a highly competitive market, and thinly differentiated products could push profit margins below zero, Bessemer warned.
In contrast, shooters are clearly lower than SaaS peers due to rapid finding fit in the product market, maintaining and expanding customer relationships, maintaining strong gross profits, and due to growth and modest model-related costs. They grow faster on average than their SaaS predecessors, but at rates they still feel locked into the traditional bottlenecks that expand the organization.
“Those businesses may not control the headlines yet, but they are loved by their customers and are on the trajectory of creating software history,” writes Bessemer.
It's “freakish” but it's possible
Q2T3 seems “funny,” but the company said it's not impossible for AI startups to achieve.
Generation AI has dramatically reduced time to market by speeding up development, deployment and moving cycles, and Bessemer claims that dozens of startups are already proving that this curve is within range.
Still, Q2T3 is not for the timid. Is it a new way to redefine the success of a startup or is it a sign of an ai bubble? Only time can be seen.
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