This post is by Jason Lemkin from SaaStr
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We last checked in at Xero when it crossed $650m in ARR. Xero is a very interesting SaaS case study with (x) the majority of its revenue outside the U.S., and (y) a complex sales process with sales reps selling to very small businesses not paying all that much. A tough way to build a decacorn — sales-driven very small-business sales — but they’ve done it, so there’s a lot to learn here. Here are a few:
- All the way until $600m+ ARR, the majority of Xero’s new bookings and revenue still came from Australia and New Zealand! The U.K. has since grown substantially to $200m ARR, but they got all the way to $500m+ ARR selling mainly in Australia+NZ. So nail a niche!! It’s often much bigger than it looks at first.
5. Their CAC isn’t small/short at 15 months. It takes them over a year to go profitable on an SMB customer. They have a sales-assisted SMB sales process, which isn’t easy to make efficient. But they’ve done it. A LTV/CAC of 6.0 still makes for an efficient model.
Thank you so much for the kind words! We're thrilled to have your continued encouragement! ^SR pic.twitter.com/Y0Cb3fGNtL— Xero (@Xero) January 11, 2021
5 Interesting Learnings from Xero. As It Approaches $1B in ARR. appeared first on SaaStr.
It would probably cost me £20K in accountants’ fees to move away from Xero, they have me — Jack Bremer (@jackbremer) January 11, 2021