Founders ask us every week: what does a dedicated development team actually cost? The honest answer depends on squad size, seniority mix, domain complexity, and whether you need AI-native capabilities from day one. This guide breaks down the numbers so you can budget and compare options without surprise invoices.
Typical squad compositions
- Lean MVP squad: 2 full-stack engineers + fractional design/PM — from ~$12k–18k/month offshore.
- Growth squad: 3–4 engineers, designer, PM — from ~$22k–35k/month for serious SaaS velocity.
- Platform squad: 5–8 engineers across backend, frontend, DevOps — enterprise or multi-product scale.
Offshore vs in-house: the real comparison
A mid-level US engineer often costs $150k–200k fully loaded. Three US engineers plus benefits, equipment, and recruiting easily exceed $600k/year before management overhead. A dedicated offshore squad with overlap hours and delivery ownership frequently lands at 40–60% of that cost with comparable output when the partner is strong.
What drives price up
- 1Regulated domains — fintech, healthcare, jewellery bullion compliance.
- 2Real-time systems, multi-branch ERP, or heavy integration surface.
- 3AI features requiring evals, guardrails, and observability — not just API calls.
- 424/7 on-call or strict SLAs beyond business hours.
Red flags in cheap quotes
If a quote is half the market rate, ask what is excluded: code review, tests, documentation, security, deployment, or maintenance. The cheapest team often becomes the most expensive when you pay twice to rebuild.
Price dedicated teams monthly per squad, not hourly per developer. Hourly models reward slow delivery; squad models reward shipping.
