Thread by @jasonlk

So you might have missed one of the most impressive SaaS IPOs on 2021 this week ... Samsara

It's at $500m+ ARR growing a stunning 72%, and the founders still own half the company

5 Interesting Learnings: ⬇️⬇️⬇️⬇️⬇️

#1. Multiple Products are Key to Growth at Scale

We’ve seen this time & time again. 89% of 700 $100k+ customers use multiple Samsara apps. One for video and one for telematics do $200m ARR >each<. If wasn't multi-product, Samsara would be less than half the size is today.

2. Still hit 72% Gross Margins even with a hardware component.

This is pretty impressive, many SaaS companies with hardware struggle to hit 60% gross margins. Having customers sign 3-5 year contracts (see below) helps Samsara amortize the hardware costs over a lengthy period

3. 90% of Revenue Still from U.S., although now expanding

Connected vehicles have different regulatory req'ts per country. Samsara focused almost entirely on U.S. until recently, 7.8% of revenue outside the U.S. in 2020 & 10.2% today.

Now global expansion is increased focus

#4. 694 folks in sales at $500m in ARR — just under half of the total 1,490 total employees, to sell $5k-$100k+ deals

A good yardstick for folks selling direct to both larger SMBs, mid-market, & enterprise. Samsara has 13,000 “core” customers, ones that pay $5k a year or above

#5. 13k “core” customers out of 25k total.

As Samsara continues to push into $100k deals, its sub-$5k customers have been de-emphasized. Tiny customers ($1k-$5k ACV), while half customer base, only make up 7% of revenue. Largest 700 customers pay $100k & represent 44% of MRR

And a few more:

#6. Growing beyond its initial market for fleets of vehicles in Transportation has been key to growth

Transportation was first target market & remains its #1 vertical, but only 23% of total revenue today

#7. NRR of 115%, & 125% for its $100k+ customers

Strong, but nothing out of ordinary. Solid NRR for purchase that is on average $40k ACV, w/ smaller customers paying $5k. If NRR is 125% for $100k cos, it’s likely around 90%-100% for the smallest customers (<$5k)

#8. Adding $100k+ customers has been key to growth.

Samsara still has many SMB customers, but adding $100k+ customers fueled growth after $100m ARR. Samsara went from 64 $100k customers in 2019 to 715 in 2021.

#9. Customers sign 3-5 year, non-refundable contracts.

This is common in the connected vehicle space, where long-term contracts have traditionally been paid to offset the upfront hardware costs. But it's rare for SMBs and mid-market in general.

and a final note:

#10. The co-founders still each own 25% of the company. By growing so quickly, and by being repeat founders, they were able to raise just 2 core VC rounds at relatively high valuations. This left each co-founders with 25% each.

A deeper dive here: