MongoDB is one of the most interesting “commercial open source” success stories, taking a disruptive but open source database technology and building into an incredible business approaching $1B in ARR … notwithstanding Amazon and others directly competing.
Amazon didn’t kill Mongo or Snowflake — both are racing to $1B ARR in almost record time. In fact, Mongo came back and built functionality that you just can’t get from Amazon. E.g., running across multiple clouds.
Today, MongoDB has 24,800 customers generating almost $700m in ARR, growing a stunning 39% year-over-year. That’s an impressive distribution, with almost 100 $1M+ customers now, and an average customer paying about $30,000 a year.
MongoDB is accelerating at $700m ARR. The size and power of the Cloud is just awesome these days.
5 Interesting Learnings:
#1. 98 $1M+ ACV Customers, Up from 62 a Year Ago. But $100k customers only increased from 898 to 975 year-over-year. That’s an interesting distribution of its 25,000 customers. The top ~100 of its 25,000 customers make up perhaps 15% of their total revenue base, and that’s growing fast. But the $100k-$1m “mid-market” segment isn’t growing as fast as smaller and larger customers … perhaps because sales is whale hunting. Most seven-figure customers start as smaller customers, as they add more workloads over time. More often than not, developers buy first, and then other business stakeholders are brought in as the footprint and deal size expands.
#2. 2,800 of 25,000 customers are “direct sales”. The rest are self-serve. So the long tail of MongoDB’s customers serve themselves (as one might expect), and sales only comes into about 10% of deals. MongoDB looks for signals as to when sales should jump into self-service deals, and continues to improve the signals of which self-service customers for sales to talk to. While still a minority of all customers, direct sales customers are up from 1,900 a year ago, about the same as overall growth (+47% year-over-year).
#3. 120% NRR. World-class, but a bit lower than some other developer-focused leaders. Perhaps a reminder that not everyone needs the 160%+ of a Snowflake or Twilio. 120% may be a great yardstick if you are like Mongo.
#4. Breathtaking acceleration of MongoDB downloads — a good proxy for acceleration in the Cloud overall. Their free version of Mongo has been downloaded 130m times, and of that … 55 million in just the last year. That’s more than all downloads in the first 10 years of the company’s history, and a huge sign that Cloud is accelerating even faster than most of us realize.
#5. Multi-cloud is one of their top accelerants. There is a lot of talk of multi-cloud, but how important is it really? Mongo shows very. Mongo expects 98% of its enterprises to be multi-cloud by 2024.
A great deep dive with Mongo’s VP Corporate Sales and Chief Product Officer here:
And a few bonus notes:
#6. Professional services are a small percent of their revenue (and are gross margin negative). MongoDB like Salesforce, Hubspot, and others has its partners do most of its implementation services. Services are only at about a $28m run rate, and are shrinking as a percent of revenues. They’re only growing 19%. Instead, Mongo invests in supporting a rich SI ecosystem.
#7. Not pushing annual contracts so much helped. As Mongo scaled up its sales team, at first it had an incentive program that heavily pushed annual deals. They saw this creating friction because of the approvals required for long-term commitments, so they changed the sale comp plan to incent sign-ups instead. A reminder that sales incentives really matter … and that you should just let customers buy the way they want to buy. If you want to close the most customers, at least.
#8. Metrics are back to pre-Covid levels. Always good to track. Mongo saw customers belt-tighten after Covid, especially with a slowdown in account expansion. Logo churn didn’t go up, but there was less account expansion, as we saw with many other leaders. But cohort behavior and dynamics are now back to pre-Covid levels.
#9. Mongo plans to go back to the office! Always interesting to hear different strategies here. Mongo feels more junior employees will benefit the most from working together in-person, but isn’t going to force anyone to come back. They, like others, will re-imagine the office so some can come to the office a few days a week.
Wow, what an incredible story 13 years in for MongoDB. And growing 40% at $700m ARR is just incredible.