So Procore is the Vertical SaaS leader you need to follow if you’re in any type of Vertical SaaS.
It took a while to take off, and almost died during the Great Financial Crisis. But then as mobile took off and more, it accelerated and grew to become the #1 U.S. player in construction SaaS.
Today they are at:
- $1.2 Billion in ARR
- Growing 19%
- 12% Free Cash Flow margins
- And worth $11.6 Billion — an impressive 10x ARR
Procore is what a 10x ARR Vertical SaaS leader looks like.
5 Interesting Learnings:
#1. All Growth Today in $100k+ Customers
Procore serves stakeholders of all sizes — and it started very SMB, managing high-end home projects for celebrities. But today the net new revenue growth is in $100k+ customers. $100k+ customers are growing 18% overall. Overall customer count is fairly flat.
#2. 84% of Revenue From U.S.
Going global can take longer and can be harder in vertical SaaS.
#3. Patient Approach to Land-and-Expand
The average Procore customer buys 3-4 products and the average enterprise customer 5-6. But it doesn’t happen overnight. It can take 3-4 years to fully sell customers on the entire Procore suite, and it took 7 years for one of its biggest customers to hit $4.5m in ARR.
#4. Moving From Global GTM Operations to Region-Specific Ones
Interesting this was called out, that generalist AEs and a matrix org led to too much of a U.S.-focus
#5. Up to 9 Buyer Personas Per Deal
This is one of many reasons I see B2B sales execs and marketers that are used to selling to a few specific personas struggle in vertical SaaS. It’s not just a lot of stakeholders. It’s a lot of different personas and users who need and want different things from the vendor.
And a few other interesting notes:
#6. Continuing to Drive Up Efficiency and Non-GAAP Profits
Procore has gotten a lot more efficient since 2022 — as has almost even public SaaS leader — and is aiming for even more efficiency and 13% non-GAAP operating margins this year.
#7. World-Class GRR of 94%-95%
Get Vertical SaaS right, build the whole suite that your industry needs — and folks stay.
#8. 63% Win Rate Vs. Top 3 Competitiors Combined, 86% on Greenfield Opportunities
The best in Vertical SaaS aim not just for 10%, 20%,30% market share. They aim to own it all, or as close to is possible. For 80%+ market share.
#9. Almost Died During the Great Financial Crisis
Construction ground to a halt in 2008-2009, and so did Procore. The founders never quit. But one seed investor had to write a bridge check for them to make it. And almost all their competitors went belly up. More here on our pod with CEO Tooey Courtemanche soon.
And a great deep dive with Procore’s CPO Wyatt Jennings here: “A Playbook for Vertical SaaS: From $10M to $1B with Procore’s CPO”
