So in our 5 Interesting Learnings series, we try to mix it up with a combination of how “hero” companies are doing, like Monday, HubSpot, GitLab, etc. … how some ones that you might know less well are doing, like Doximity, Bill (when we first profiled), … and then how some you may have even forgotten about are doing.

Like Blackbaud.  It’s a real oldie in educational and nonprofit software.  It was founded in 1981 (!) and IPO’d in 2004 (!), and transitioned into SaaS later and through acquisitions, and then into a broad platform for fundraising and educational management.  $100 Billion has been fundraised on its platform.

Fast forward to today, it’s at $1B in ARR, growing 14%, cash flow positive (24% non-GAAP EBITDA), and worth a so-so $3.4 Billion.  A story of a sloooow path to $1 Billion in revenues.

And of a segment of the economy that is more resistant to the macro effects many of us are experiencing — non-profits.

5 Interesting Learnings:

#1.  A very slow, inorganic path to $1B — 9% CAGR.  Blackbaud is in some ways a case study of the perils of vertical SaaS.  If you don’t expand your TAM enough, growth can stall at scale.  Essentially all growth now is inorganic, i.e. from acquiring other products and companies.  Organic growth is only 1%.  Yes, you can exhaust your TAM and market.

#2.  Pushing from 25% EBITDA Margins to 30%.  The goal of everyone at scale is to hit 30%+ margins, including Salesforce.

#3.  40,000 Customers, so about $25,000 on average per deal.  The classic mid-market that many try to avoid.  But Blackbaud is making it work.  And they do have a number of six-figure and now seven-figure deals.

#4.  Increased Transaction Fees and Raised Prices on Renewals.  This is hardly unique, but helpful to see how everyone is handling increases that is doing them:

#5.  Not Seeing Much of a Downturn.  While Blackbaud’s growth isn’t epic, it’s also not seeing much of an economic impact in its core non-profit customers.  Activity is barely down, if at all, at least for now.

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