So ON24 is one of those SaaS companies you sort of know and have probably used if you’re a marketer … but probably didn’t pay too much attention to otherwise.  Haven’t they been around forever?  They were founded in 1998 (!).  Are they as good as Zoom?  Sometimes yes, if you need lead-capture, etc. (marketers).  Sometimes, well, Zoom has a simpler webinar product too if all you need is broadcast capabilities.

But then Covid hit, and ON24 went into overdrive — and a $3B IPO.  From just 8% growth in ’18 to ’19 — hyper-mature — to a stunning 59% growth rate after Covid and to almost 100% year-over-year growth at the end of 2021.  After Covid hit, we needed to do a lot more webinars and digital events!

I can’t imagine another SaaS leader has even gone from super slow growth to hyper growth at this scale (almost $100m+ ARR).  A Covid Beneficiary, indeed.

So what are 5 Interesting Things We Can Learn?

1. 1,900 Customers, so about $100,000 per customer, $2m+ for its biggest.  ON24 is enterprise, although not ultra enterprise, but much more than broader competitors.  271 of its 1900 customers pay more than $100,000 per year, and the average customer pays just about that ($100k).  Its Top 10 Customers have historically paid about 20% of its total revenue, so its whales matter, paying ~$2m a year on average each.  They focus on customers with at least 2,000 employees or more.

2. Significant Professional Services — 20%+ of their revenue.  ON24 takes more work to deploy than a simpler service like Zoom, and that’s reflected in over 20% of their revenue from professional services.  CMOs have budget to pay to get digital engagement done the way they want.  So ON24 isn’t necessarily as easy to deploy as other solutions.  But that may be OK for their core use cases.

3.  23 Years (!) to IPO and $200M in ARR.  That’s quite a long path.  As the Cloud expansion continues its unprecedented run, we’re seeing more and more 20+ years young SaaS companies get acquired for $1B+ and/or IPO.  Impressively, Sharat Sharan remains founder and CEO since its inception! He also retained 11% ownership even after 21 years.

4. Covid was #1 factor in growth, but multiple products is the #2 factor fueling growth  Like Box and others, much of ON24’s growth outside of Covid has been fueled by customers buying more than 1 product from them.  29% of customers now buy more than 1 product from ON24, up from 15% in 2018.

5.  Land-and-expand strategy.  Land-and-expand seems to work for ON24, and they take a classic “named account” approach to penetrate a core business unit at a customer, and then expand from there.  “After establishing a customer relationship with a business unit of an Enterprise, we seek to expand to new business units, divisions, departments and geographic regions, as well as increase subscriptions to additional products, which we refer to as “attachments,” and expand product use cases.”  Land-and-expand is often harder than it looks in the enterprise, when other players can go and try and close the entire company in one bigger deal.  So it’s interesting to see it working at scale for ON24.

And a few other, bonus learnings:

6.  Mostly annual contacts, and more and more multi-year deals.  While many Zoom customers still pay monthly, more enterprise ON24 is almost entirely annual contracts — or longer.  27% of customers are now on multi-year contracts.

7. 23% of revenue from international.  About standard for many scaling SaaS leaders.

8. Mediocre NRR before Covid, high after.  NRR was only 106%-108% pre-Covid, and then quickly grew to 147%.  While that’s great, it shows that high NRR doesn’t always reflect fundamentals.  GRR is just as important.

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