Squarespace has crossed $700,000,000 ARR selling just to SMBs, still growing 30% (!)
Enterprise is < 1% of their business
But without the commerce boom, growth would have been much slower
5 Interesting Learnings: ⬇️⬇️⬇️⬇️⬇️
Enterprise is < 1% of their business
But without the commerce boom, growth would have been much slower
5 Interesting Learnings: ⬇️⬇️⬇️⬇️⬇️
#1. Over $500,000 revenue per employee
Squarespace has 1,200 employees and $700m in ARR. That’s pretty darn efficient
As a result, it’s quite profitable, with $150m in free cash flow in 2020
When your CAC is low, it can be done
Squarespace has 1,200 employees and $700m in ARR. That’s pretty darn efficient
As a result, it’s quite profitable, with $150m in free cash flow in 2020
When your CAC is low, it can be done
#2. Monetizing ecommerce via subscriptions, but not payment processing
Squarespace rapidly expanded into ecommerce, with $3.9 Billion in GMV, up a stunning 91% from 2019. But in contrast to Wix & Shopify, it doesn’t keep much of the revenue from merchant services itself
Squarespace rapidly expanded into ecommerce, with $3.9 Billion in GMV, up a stunning 91% from 2019. But in contrast to Wix & Shopify, it doesn’t keep much of the revenue from merchant services itself
Rather, it charges for software subscriptions to take payments on its websites.
This ecommerce revenue was $143m in 2020, about 22% of total revenue. But it doesn’t monetize the payments themselves directly very much, unlike Wix
As a result, its margins are higher
This ecommerce revenue was $143m in 2020, about 22% of total revenue. But it doesn’t monetize the payments themselves directly very much, unlike Wix
As a result, its margins are higher
#3. 85% NRR. Common for self-service & SMBs, but pretty low for public SaaS company
Most higher-churn SaaS & self-serv companies seem to obscure, or at least, not highlight any NRR below 100%.
Wix doesn’t disclose its churn, but it’s likely similar.
Most higher-churn SaaS & self-serv companies seem to obscure, or at least, not highlight any NRR below 100%.
Wix doesn’t disclose its churn, but it’s likely similar.
#4. 70% annual, 30% monthly subscriptions.
Helpful to see, and not inconsistent with other similar self-serve webservices that offer discounts to go annual.
Helpful to see, and not inconsistent with other similar self-serve webservices that offer discounts to go annual.
#5. Seasonality: Q1 and Q3 are their strongest quarters.
Squarespace still sees seasonality even at $700m ARR, with Q1 benefitting from new marketing spend at the start of the year, and Q3 benefitting from a holiday rush.
So seasonality is real here at scale.
Squarespace still sees seasonality even at $700m ARR, with Q1 benefitting from new marketing spend at the start of the year, and Q3 benefitting from a holiday rush.
So seasonality is real here at scale.
And a few bonus learnings:
#6. Growth would be mediocre without ecommerce.
Websites revenue (so-called “presence” revenue) only grew 18% -- while ecommerce revenue grew 78%.
Blended together, that worked out to 28% growth
#6. Growth would be mediocre without ecommerce.
Websites revenue (so-called “presence” revenue) only grew 18% -- while ecommerce revenue grew 78%.
Blended together, that worked out to 28% growth
Both Squarespace and Wix would be >much< less interesting companies without their strong ecommerce components.
You have to add a second product to really scale beyond $1B in ARR
You have to add a second product to really scale beyond $1B in ARR
#7. Less than 1% of revenue from enterprise customers.
A potential growth path after $1B ARR for Squarespace, but they'll have waited until after $1B+ ARR to truly go upmarket!
Contrast that with Shopify in ecommerce where Plus is a big part of growth story
A potential growth path after $1B ARR for Squarespace, but they'll have waited until after $1B+ ARR to truly go upmarket!
Contrast that with Shopify in ecommerce where Plus is a big part of growth story
#8. Founder-CEO Anthony Casalena started Squarespace in his dorm room, controls 68% of the voting rights, and still owns 36% of the company!!
Woah. Casalena maintained such a large share by mostly bootstrapping until growth stage.
Not easy, but it can be done.
Woah. Casalena maintained such a large share by mostly bootstrapping until growth stage.
Not easy, but it can be done.
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