Tom Tunguz

FEBRUARY 26, 2025

They prioritize revenue growth, market share and profit maximization differently. Maximization (Revenue Growth) - maximize revenue growth in the short term. Many mid-market software companies price with the goal of revenue maximization, negotiating for the highest possible price in each sale.

SaaS Payments 276

SaaS Payments Pricing Strategy Scale 276

SaaStr

APRIL 17, 2021

Over $500,000 revenue per employee. Monetizing ecommerce via subscriptions, but not payment processing. Billion in GMV processed, up a stunning 91% from 2019. But in contrast to Wix and Shopify, it doesn’t keep much of the revenue from merchant services itself. 30% of its revenue outside the U.S.

Payment Methods 338

Payment Methods Merchant Services Payments Payment Services 338

SaaStr

OCTOBER 11, 2023

That’s not just pretty epic growth at almost $7 Billion in revenue, it’s one heck of a comeback. But a Smaller and Smaller Percentage of Revenue. From a business model perspective, Shopify has in essence been a fintech and merchant product first and a SaaS product second for quite some time. A tough transition.

Payments 296

Payments Merchant Services Payment Solutions Revenue 296

SaaStr

MARCH 25, 2021

It’s done it by going more upmarket, and better monetizing partners and services. Having said that, the average ACV here is $14,615 … so that’s at the high end of a traditional SMB spend, which probably accounts for the high NRR. Driving existing customer revenue up more than new logos.

Outsourcing Services 293

Outsourcing Services Payments Merchant Services SaaS Payments 293

SaaStr

NOVEMBER 1, 2023

Well, fast forward to today and it’s truly an SMB powerhouse. How is SMB SaaS doing today? Both Bill and Shopifty have morphed over the years from almost pure SaaS companies to payments platforms built on top of a SaaS core. The rest of the growth is from its Divvy platform, which is bought in 2021 for $2.5

Payment Services 339

Payment Services Payments SaaS Payments Payment Solutions 339

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. “It’s a lot of human capital to make it work across 50 states and a trillion dollars of revenue.” From Zero to $1.4

SMB 130

SMB Payments Payment Services SaaS Payments 130

SaaStr

SEPTEMBER 7, 2024

So one of SaaStr Fund’s latest investments is Mangomint, a vertical SaaS platform for spas and salons. And yet, today Mangomint is at eight figures in ARR, growing 100%+, with 110% NRR from SMBs. You really have to do it all now to build a true platform for SMBs: software, payments, payroll, marketing, workflow and more.

SaaS Payments 315

SaaS Payments Payments Payment Methods SMB 315

SaaStr

APRIL 29, 2021

Shopify’s first quarter revenue: Q1 2021: $989 million Q1 2020: $470 million Q1 2019: $321 million Q1 2018: $214 million Q1 2017: $127 million Q1 2016: $73 million Q1 2015: $37 million Q1 2014: $19 million Q1 2013: $9 million. When you add in payments, i.e. merchant services, NRR for 2018+ is about 110%, based on the below new chart.

Merchant Services 316

Merchant Services Payment Methods SaaS Payments Payments 316

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. So they let folks use the platform the way they wanted, from paper checks to fax and more. #2. But it paid off.

SaaS Payments 64

SaaS Payments Payments Payment Services Scale 64

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. From SMBs. A reminder and a challenge to not settle for < 100% NRR from SMBs. Fast forward to today, and only 20% of its revenue is from software subscriptions.

Payments 295

Payments Payment Solutions SMB Acquisition 295

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 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.

SaaS Payments 347

SaaS Payments Scale SMB PayPal 347

SaaStr

AUGUST 17, 2021

They are at 2,000 customers, a stunning 40% revenue and 46% billings growth, at $700m in ARR. Network effects are real in Spend Management. Coupa isn’t as much a fintech as SMB players like Bill.com, but it’s getting there with Coupa Pay. This is a bigger task than SMB, but a huge market. And a few bonus notes: 6.

Payments 324

Payments SaaS Payments SMB Payment Solutions 324

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. That’s the power of recurring revenue. eCommerce and Business Tools Are Key Drivers to Accelerating Growth. Efficient at SMB marketing — an ~8 month CAC. But much lower in Payments.

Payment Methods 310

Payment Methods Payment Solutions Payments SMB 310

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.

SaaS Payments 65

SaaS Payments Payment Services Payment Solutions Payments 65

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.

Merchant Services 88

Merchant Services Stax PayPal SaaS Payments 88

SaaStr

AUGUST 24, 2022

SMB sales (most of Toast) is very tough to do without a highly efficient and effective sales force. At least 20% of your customers from referrals and second-order revenue. #4. Many SMB leaders have to get very, very good at outbound because of the limited deal sizes. 20% of new customers / locations come from referrals.

SaaS Payments 327

SaaS Payments Scale SMB Payment Solutions 327

SaaStr

JULY 11, 2023

Gorgias, an eCommerce customer service platform, discovered that their customers’ main pain points were a lack of centralized customer support channels and poor integrations. Platform: Will any integrations or partnerships be beneficial or a “must” to attract customers? Firstly, payment should be easy for customers.

Sales Hiring 202

Sales Hiring SMB Sales Recruiting Payment Methods 202

Payrix

MARCH 12, 2024

Embedded Payments have become a popular initiative among vertical specific software companies looking to deliver a more seamless customer experience, introduce new revenue into the business, and stay competitive in today’s digital world. How do they think about attaching payments to those existing customers?

Payments 100

Payments Embedded Payments Merchant Services SaaS Payments 100

SaaStr

OCTOBER 22, 2021

GRR of 86% and NRR of 119% are very impressive for SMBs … although they only count customers with 5+ seats. Still, 119% NRR from SMB is world-class even for 5+ seats accounts and sometime to strive for if you have similar sized customers. #4. But after adding more credit cards and payments, and coming out of Covid … boom!!

Scale 327

Scale SaaS Payments SMB Payment Solutions 327

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%. Non-Recurring Revenue Doesn’t Count, At Least Not as Much. Pass-Through Revenue Simply Doesn’t Count.

SaaS Payments 281

SaaS Payments Metrics SMB Payments 281

Payrix

MAY 14, 2024

No one knows this better (or more intimately) than a software company Chief Revenue Officer (CRO). Adam Tesan, CRO at Worldpay for Platforms, is a seasoned executive leader with decades of experience in sales, marketing, and revenue in the software space. It was an Embedded Finance play starting with payments. [It

Payments 147

Payments Payment Services Payment Solutions SaaS Payments 147

Payrix

JUNE 25, 2024

Embedded Finance is more than just a buzzword; it represents a fundamental shift in how financial services are delivered and consumed today. 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.

Payments 100

Payments Payment Solutions Finance Embedded Payments 100

SaaStr

JULY 20, 2022

Weave started off as a dental ERP and comms platform (including VoIP / phone), and then expanded beyond that as it scaled. 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. A fairly standard SMB price point.

SaaS Payments 287

SaaS Payments Scale Payment Methods SMB 287

SaaStr

DECEMBER 10, 2019

110% Net Revenue Retention and 8 2% Customer Retention from 81,000+ SMB Customers. Bill.com sells to very small businesses that do churn at a higher rate. But that also proves that’s no excuse to drop below 100%+ net revenue retention. Bill.com manages 110% Net Revenue Retention on 82% Customer / Logo retention.

Payment Services 276

Payment Services Payments Payment Methods SMB 276

SaaStr

APRIL 19, 2023

One leader in SMB commerce is Lightspeed Commerce, founded way back in 2005. And their mix of software, payments and hardware revenue drives up the total deal size — but puts a lot of pressure on margins. 39% of their revenues from software, and going down. Driving up ARPU at scale key to growth with SMBs.

Payment Solutions 287

Payment Solutions Point of Sale Payments SaaS Payments 287

Payrix

SEPTEMBER 25, 2024

In 2023, the Embedded Finance market was valued at $73 billion and projected to grow to $523 billion by 2032, growing at a compound annual rate of 24%, according to a recent report. It’s still early days for Embedded Finance, but the preliminary statistics coming out of this space are rather significant.

Payments 130

Payments Payment Solutions Embedded Payments Trends 130

SaaStr

MAY 26, 2019

Its growth has been more slow-and-steady than traditional rocketship, crossing $69m in Q4 revenues (let’s call that $280m+ in ARR, so soon to be $300m) — growing 17% a year by revenue, and 10% a year by customer count. That is a similar revenue growth rate to Salesforce’s core CRM product. A few learnings: 1.

Scale 273

Scale SaaS Payments Payments Payment Services 273

SaaStr

MAY 10, 2021

Fast forward to today, and we can add an important nuance to that: a second core product not only helps you grow faster at scale (a bigger TAM), but it drives up NRR and more revenue from your existing customers. Pretty good for SMB SaaS. Box at $800m ARR is about 30% SMB / 70% enterprise, the inverse of Shopify.

Merchant Services 261

Merchant Services SaaS Payments SMB Payment Solutions 261

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. And even before they did, panic set in in businesses with no cash reserves. functioned.

SaaS Payments 280

SaaS Payments Sales Hiring Scale SMB 280

Payrix

OCTOBER 1, 2024

In the latest episode of PayFAQ: The Embedded Payments Podcast, host Ian Hillis sits down with Candice Raybourn, Head of Partner Activation at Payrix and Worldpay for Platforms, to discuss the crucial topic of PCI compliance. What is PCI DSS? Candice explains the basics of PCI DSS. The shift to PCI DSS 4.0 is essential.

Payment Services 113

Payment Services Merchant Services Payments compliance 113

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. Before Navan, there were different apps for managing expenses, events and meetings, payments, etc.

Payment Solutions 285

Payment Solutions Payments Travel Scale 285

SaaStock

JANUARY 25, 2019

ContaAzul is a business management platform for small businesses created in Brazil. Its focus is on helping companies handle financial routine and streamlining processes related to accounting, banks, stock, and electronic invoicing, among others. Vindi is a PCI-certified online payment platform for recurring billing.

SaaS Payments 257

SaaS Payments Payment Solutions Payment Methods Payments 257

SaaStr

MAY 25, 2022

If Momentive / SurveyMonkey had stayed 100% self-serve and low end, it likely wouldn’t be growing much at all, with self-serve revenue now only growing 7%. Far forward to today, 1/3 of its revenue is sales-driven, but it’s the core growth driver, up 35%. #2. It’s not always best to force annual payments.

Scale 287

Scale Payments Payment Solutions Payment Services 287

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.

Pricing 276

Pricing Merchant Services Payment Solutions Payments 276

SaaStr

OCTOBER 29, 2019

SaaS is about creating long-term value for your customer, and being compensated appropriately for that value as a business. Learn actionable monetization tips from a Product/Growth operator turned VC. This is a mobile solution for SMB’s to send an invoice and get paid. Want to see more content like this? Hi, everybody.

Payments 113

Payments Pricing Compensation Scale 113

SaaStr

JUNE 13, 2019

To give you a sense of the distribution, by ARR, of the 600 or so respondents, about two-thirds of them are 5 million in ARR or under, but we had five or six different companies that were publicly traded well north of 100 million, who are using free trial in order to continue to grow their businesses. What does this mean?

Scale 253

Scale Sales Hiring SMB Payment Services 253