So we’re very excited to have René Lacerte, founder and CEO of Bill, at 2024 SaaStr Annual, Sep 10-12 in SF Bay! Grab the final tickets here!!
And with that, it seemed a good time to dig in with one of the great SMB leaders Bill. At $1.4 Billion in ARR, growing 22% year-over-year. With a super impressive 111% NRR from SMBs.
5 Interesting Learnings:
#1. NRR Still 111% — And Has Been Through IPO. From SMBs.
A reminder and a challenge to not settle for < 100% NRR from SMBs. At least at scale.
#2. Only 20% of Revenue from “SaaS”, 80% From Transactions and Float (Fintech)
Bill started off 100% SaaS, and slowly and deliberately added payments. Float began to get material pre-IPO. Fast forward to today, and only 20% of its revenue is from software subscriptions. Shopify has seen the same trend with its SMBs as well.
But both are still at their core software platforms. But a reminder how software + payments can really work well, when it works.
#3. 87% Gross Margins (even with the majority of revenue from transaction / payment revenues)
One challenge with adding payments in SaaS is keeping the gross margins up. It’s easy to pass through revenues, it’s much harder to build enough of it yourself to keep the lion’s share of the margin. But Bill hasn’t. It’s gross margins are 87% — about as high as it gets.
#4. Divvy Acquisition Very, Very Successful
Ramp and Brex create the most noise in the expense management space, but Bill scooped up Divvy for $2.5 Billion in 2021 — and boy did it work. Divvy, now Spend & Expense Solution, has grown to a stunning $500m run-rate, growing faster than the original standalone platform.
#5. 5 Quarter CAC Payback Period
Everyone calculates this a bit differently, but it’s still very helpful Bill calls this out. 5 quarters is fairly efficient for an enterprise model, but it’s not always enough for SMBs if the churn is high and NRR low. But with 111%+ NRR, Bill can be quite profitable on a 5 quarter CAC.
And our last great deep dive with René Lacerte, Founder CEO here:
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Jason Lemkin, Khareem Sudlow
