Tom Tunguz

FEBRUARY 26, 2025

Many mid-market software companies price with the goal of revenue maximization, negotiating for the highest possible price in each sale. There are exceptions: Oracle’s database, Tanium’s security product, Workday’s human capital management software. Application software companies typically sell seats.

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SaaS Payments Pricing Strategy Scale 276

SaaStr

FEBRUARY 17, 2021

They want a slick site that does more, from eCommerce to payments to marketing and more. And SMBs are back in SaaS. While their core web site “Creative Subscriptions” are growing at a still impressive 23% year-over-year, their Business Solutions segment with ecommerce and more are growing 60% year-over-year at $200m in ARR.

Payment Methods 310

Payment Methods Payment Solutions Payments SMB 310

SaaStr

NOVEMBER 1, 2023

Well, fast forward to today and it’s truly an SMB powerhouse. How is SMB SaaS doing today? Transaction Fees Growing Far Faster (38%) Than Software / SaaS License (21%). Both Bill and Shopifty have morphed over the years from almost pure SaaS companies to payments platforms built on top of a SaaS core. Bill is one.

Payment Services 339

Payment Services Payments SaaS Payments Payment Solutions 339

SaaStr

APRIL 23, 2021

Now they’ve scaled to $200m+ ARR growing 38% selling just to 100,000+ SMBs, solving a hard problem (i.e., automating the back office and payments and billing for SMBs), and doing it with 120%+ NRR. 121% NRR from SMBs — up from 110% at IPO. Making more and more money on each payment. Pretty impressive.

Payment Solutions 347

Payment Solutions Payments SaaS Payments Payment Services 347

SaaStr

AUGUST 28, 2024

And with that, it seemed a good time to dig in with one of the great SMB leaders Bill. With a super impressive 111% NRR from SMBs. Only 20% of Revenue from “SaaS”, 80% From Transactions and Float (Fintech) Bill started off 100% SaaS, and slowly and deliberately added payments. Grab the final tickets here!!

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Payments Payment Solutions SMB Acquisition 295

SaaStr

SEPTEMBER 9, 2021

Bill.com has become an SMB powerhouse, with 120,000+ customers and a stunning $25B+ market cap. Bill.com had to develop a network that today has millions on vendors processing bills and payments on it. The payments / fintech side of Bill took a decade to come together. But the accountant channel is high volume, SMB play.

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SaaS Payments Payments Payment Services Scale 64

SaaStr

OCTOBER 11, 2023

Software Important. Overall subscription solutions revenue is up just 21%, while payments and merchant solutions are up 35% — from a much, much larger base. #2. 80% Margins on Software, But Just 38% on Payments and Merchant Solutions = 49.3% But a Smaller and Smaller Percentage of Revenue.

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Payments Merchant Services Payment Solutions Revenue 296

SaaStr

APRIL 29, 2021

It would be so helpful to know, as the #1 leader in SMB eCommerce, and also one of the very top leaders in SaaS SMB overall. When you add in payments, i.e. merchant services, NRR for 2018+ is about 110%, based on the below new chart. But likely it’s below 100% excluding payments. Well, it’s murky. Still a lot.

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Merchant Services Payment Methods SaaS Payments Payments 316

SaaStr

AUGUST 29, 2022

SMB SaaS has a lot going for it: – Millions of them – Short sales cycles – Easier compete. But, it's often hard to get to $100m ARR selling just to SMBs. sell just to SMBs pic.twitter.com/Po1I2aMaBK. So many VCs and others have gotten more and more excited about SMB SaaS. Millions and millions more.

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SaaS Payments Scale SMB PayPal 347

SaaStr

AUGUST 24, 2022

Of course, their margins are lower than a pure software play (more on that below). SMB sales (most of Toast) is very tough to do without a highly efficient and effective sales force. Many SMB leaders have to get very, very good at outbound because of the limited deal sizes. 5 Interesting Learnings: #1.

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SaaS Payments Scale SMB Payment Solutions 327

SaaStr

NOVEMBER 19, 2020

But, there are still many interesting things we can learn from Shopify, especially since it sells to so many SMBs, has been late to go upmarket, and combines a payments/fintech element with pure SaaS. So are you sure your trial needs to be so short? Subscriptions can fuel payments and merchant revenue. to promote your app?

Payments 363

Payments Merchant Services Payment Solutions Scale 363

SaaStr

APRIL 19, 2023

So one large category of software spend is on Point of Sale systems. But “POS” systems and software are everywhere, and are a lot more than just Toast and Square. But “POS” systems and software are everywhere, and are a lot more than just Toast and Square. But the margins are tough.

Payment Solutions 287

Payment Solutions Point of Sale Payments SaaS Payments 287

SaaStr

SEPTEMBER 22, 2022

So when we first started writing about Bill.com at its IPO , it was a sleep SMB accounting product. And its payments network to roll out. But yes, it’s the most incredible SMB growth story in SaaS we’ve ever seen. Don’t let anyone tell you it can’t be done with SMBs. #2. 131% NRR.

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SaaS Payments Payment Services Payment Solutions Payments 65

SaaStr

MARCH 28, 2025

SMB customers. Your suppliers might actually be your customers 30% of Bill.com’s core revenue comes from suppliers making payment choices, completely reframing their TAM calculations. billion “We are a software company because we believe you have to have great software to have a great payment experience.

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SMB Payments Payment Services SaaS Payments 130

SaaStr

SEPTEMBER 7, 2024

You really have to do it all now to build a true platform for SMBs: software, payments, payroll, marketing, workflow and more. Automation and AI are critical in SMB Vertical SaaS … due to a lack of labor Automation and AI are less about efficiency in SMB vertical SaaS than simply dealing with a lack of labor.

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SaaS Payments Payments Payment Methods SMB 315

SaaStr

APRIL 17, 2021

Squarespace may be more design-focused, Wix the somewhat more cost-effective solution. Monetizing ecommerce via subscriptions, but not payment processing. Rather, it charges for software subscriptions to take payments on its websites. But it doesn’t monetize the payments themselves directly very much.

Payment Methods 338

Payment Methods Merchant Services Payments Payment Services 338

SaaStr

OCTOBER 22, 2021

It was just amazing that when iPhone launched, you could now take a picture of receipts and have them somewhat automatically “expensed” A jaw dropping, amazing use of the first generation on mobile apps. But after adding more credit cards and payments, and coming out of Covid … boom!! Oftentimes, even.

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Scale SaaS Payments SMB Payment Solutions 327

SaaStr

AUGUST 17, 2021

Could you switch to another app? Coupa isn’t as much a fintech as SMB players like Bill.com, but it’s getting there with Coupa Pay. Coupa plans the majority of its customers to be running payments through their platform in 10 years. This is a bigger task than SMB, but a huge market. Would you want to?

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Payments SaaS Payments SMB Payment Solutions 324

SaaStr

DECEMBER 3, 2023

In particular: Hybrid SaaS with payments and fintech usually has far, far lower gross margins than pure software. See, e.g. Shopify, whose blended gross margins with payments even at its scale are still less than 50%. That’s great, and it enables their software. Often in the 40%-50% range, instead of 75%-80%.

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SaaS Payments Metrics SMB Payments 281

SaaStr

JULY 14, 2020

It may be the most successful SMB-focused app of our current generation. Bigger customers, though, find most monthly payments a huge accounting headache. And dealing with accounting every month to get a credit card payment approved isn’t worth the trouble. You just make buying your app harder.

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Pricing Scale Payment Solutions SaaS Payments 304

SaaStr

MAY 10, 2021

Let’s take a look at a few Cloud leaders that show this quantitatively: #1 Shopify’s NRR has grown from 100% to 110% as its merchant services (payments) has exploded. Pretty good for SMB SaaS. In fact, now it’s more than 2x the size of its SaaS software alone. But then a lot changed in the last few years.

Merchant Services 261

Merchant Services SaaS Payments SMB Payment Solutions 261

SaaStock

JANUARY 25, 2019

Trailblazing through their home continent, venturing successfully onto the world stage or changing from on-premise software to SaaS, these companies could have a postal code in any SaaS hotspot in the world. ContaAzul was acquired by the collaborative software platform Wabbi Software S.A. We can’t wait to meet them. Superlógica.

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SaaS Payments Payment Solutions Payment Methods Payments 257

SaaStr

JULY 11, 2023

Does it hurt enough for buyers to switch to a new solution? So many teams are hiring SDR/BDR teams, and it’s really tough to make that work in SMB sales. Firstly, payment should be easy for customers. Allowing monthly subscriptions is important, and credit card payments are key. This goes beyond focusing on your TAM.

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Sales Hiring SMB Sales Recruiting Payment Methods 202

SaaStr

OCTOBER 31, 2023

With nine figures in revenue, Ariel and SaaStr founder and CEO Jason Lemkin talk about all things Navan, rebranding when you have brand equity, building B2B software for people, pricing and business models, and much more. There was a new emphasis on building software for people. It was a Frankenstein for transient travelers.

Payment Solutions 285

Payment Solutions Payments Travel Scale 285

SaaStr

SEPTEMBER 26, 2019

What we learned from ’08-’09 in SaaS: First, SMB churn went through the roof — as SMBs went under much more quickly and often. As soon as the economy went south, SMBs started to simply go bankrupt and/or shut down. Anyone processing a lot of SMB and credit-card deals saw churn probably double.

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SaaS Payments Sales Hiring Scale SMB 280

Stax

APRIL 11, 2024

SMB owners wear many hats, managing everything from staff to sales. Adding to the already tough job of managing a small or medium business is the complex task of understanding how payment processing works, including managing the fees, equipment, accounts payable and more. Learn More What is a Payment Management System?

Payment Services 88

Payment Services Payment Solutions Merchant Services Payment Methods 88

Payrix

SEPTEMBER 25, 2024

This growing market is switching up how small-to-medium-sized businesses (SMBs) access financial products, creating exciting new opportunities for software companies to reimagine their business models and restructure their product offerings. Embedded Finance trend #3: Ultra-personal services We’re not done with data just yet.

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Payments Payment Solutions Embedded Payments Trends 130

SaaStr

JANUARY 31, 2023

The SMB segment of Zoom has stopped growing, so going from ~0% growth to 7% growth actually might end up being huge. Merchant payments have become the bulk of not only its revenue, but importantly, have been growing twice as fast as SaaS revenues). Because with those apps, we see second-order revenue spread quickly. Yup, $1.00.

Pricing 276

Pricing Merchant Services Payment Solutions Payments 276

Stax

MARCH 17, 2025

Adding PayPal to your list of accepted payment methods opens up a range of benefits for you and your merchants alike. Benefits for merchants Increase conversions – The primary advantage of adding PayPal, Venmo, and Pay Later as payment options is that they enable merchants to boost conversions.

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Merchant Services Stax PayPal SaaS Payments 88

SaaStr

JULY 20, 2022

While these aren’t great metrics if Weave was enterprise, they are still solid for SMBs. Many SMB SaaS companies struggle to hit 100% NRR and 80% GRR. This is a challenge so many SMB businesses have that also have a services component and a hardware component. .” Many SMBs just prefer it. #4.

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SaaS Payments Scale Payment Methods SMB 287

Neil Patel

DECEMBER 8, 2020

They’re not using time tracking software. Or, they’re using a solution that doesn’t fit with their business. Because no one should suffer any longer, I’m going to share the top five time tracking software options on the market today. The Top 5 Options for Time Tracking Software. There is no third reason. Scheduling.

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Payment Solutions Software Payment Methods Payments 140

Neil Patel

NOVEMBER 29, 2020

Adopt the best call center software and you will outfit your teams with the tools they need to communicate effectively. Forget about the requirements of a physical office space, infrastructure, or even a business phone system. Modern call center software is all you need to get up and running. End of story. Calling Capabilities.

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Payment Solutions Software Review Payment Methods Software 144

Neil Patel

DECEMBER 23, 2020

Interested in customer relationship management (CRM) software that’s free forever? I’ve picked out the top five free CRM software products on the market. Let’s run through the important considerations that go into picking the right free CRM software on the first try. The Top 5 Options For Free CRM Software.

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Payment Solutions Software Review Software Payments 139

SaaStr

MAY 25, 2022

It’s not always best to force annual payments. But of course, a core Zoom customer might be using the app 3-4 hours a day. #4. But lower NRR generally comes with SMB customers, at least to some extent. #7. 91%+ of customers pay annually. In any event, SurveyMonkey is an example of pushing folks to annual plans.

Scale 287

Scale Payments Payment Solutions Payment Services 287

SaaStr

JUNE 13, 2019

We invest from the very earliest stages to the latest stages of software and consumer companies and we’re based in California. And they were broken down roughly a third, a third, a third by targeting the SMB, the mid-market, and the enterprise. In terms of ACV, they span the gamut, everywhere from 5K all the way to 150K plus.

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Scale SMB Sales Hiring Payment Services 253

Neil Patel

DECEMBER 28, 2020

It’s a good idea to set up a business security system before you need it. A lot of people see cost as a barrier to installing a reliable business security system. That used to be true, but today, there are tons of really affordable solutions. That used to be true, but today, there are tons of really affordable solutions.

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Payment Solutions Business Wireless Payment Methods 110

Payrix

JUNE 25, 2024

Ian Hillis, Head of Growth at Worldpay for Platforms discusses this new term and what the opportunity may await software providers on our latest episode of PayFAQ: The Embedded Payments podcast. Ian defines it as financial products that are integrated into a familiar software workflow and tailored to the specific needs of the end user.

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Payments Payment Solutions Finance Embedded Payments 100