So we haven’t checked in on Procore since after its IPO, when it was at $500m ARR.

It’s a true vertical SaaS leader — “Cloud for Construction” — growing an impressive 33% at $1 Billion (!) in ARR now.  And it’s a great story of going long.  It took Procore years to really take off, and it didn’t take off at all until mobile became the accelerant.  Procore in fact was founded way back in 2002.

Today though, it’s worth a stunning $10 Billion.  That’s 10x ARR, even in today’s tougher environment and a world of 6x multiples even for many of the best in SaaS.

Why?  Strong growth, break-even margins, and very high-quality revenue.

So let’s dig in.

5 Interesting Learnings:

#1.  Growth Has Mostly Held Up, Even in a “Tougher Demand Environment”

Procore hasn’t been immune to some macro pressures, with growth declining from 41% a year to 33% today.  Still, its growth has held up far better than many SaaS leaders.  Selling to “normal industries” outside of tech as customers is a theme here.  E.g., Monday’s growth has held up much better than competitors like Asana and Atlassian which have much more customer concentration in “tech”.

#2.  Gotten Much More Efficient — But Hasn’t Pushed It Too Far And Sacrificed Growth

Yes, Procore has impressively improved its non-GAAP operating margins from -15% a year and a half ago to just -1% today, with a goal of +2% to +3% over the coming year.  That’s a ton of progress and a much more efficient business.  But they resisted the pressure to take it even further.  They are still growing 33% at $1 Billion in ARR.  It’s still time to invest!   So they have pushed operating margins even higher, but do have contingency plans to do so if market conditions get tougher (i.e., growth slows more than planned).

#3.  The Big Efficiency Cuts Have Been in Sales & Marketing

Procore got more efficient and its operating margins up mainly by cutting sales & marketing expense — down almost 10% this past year.  But engineering / product and G&A still grew.

#4. $62,500 Per Customer on Average, Across 16,000 Customers

With $1B in ARR and 16,067 customers, their average ACV is $62,500.  Many see the “mid-market” as the toughest market segment to win in.  Not Procore. They’re very good at it, in fact.

#5.  GRR Has Held Up at an Impressive 95%.

Wow.  Folks don’t leave Procore.

And a few other interesting learnings:

#6.  New Customer Count Growing 10%, ARR Growing 33%.

Another theme of the past 18 months.  The leaders are really leaning into their base.  Procore is still growing its customer count by a healthy 10% a year at scale.  That’s hard to do at $1 Billion in ARR.  But they are selling them more, and growing the accounts.  That, plus the 95% GRR, leads to 33% growth.

#7.  It’s Still Tougher Out There for Procore

Even with this impressive growth at $1B in ARR, it’s tougher for Procore than it was.  Like many of you, they are seeing longer sales cycles, deals take longer to close, and more decision-makers in deals.  And like you, now they are seeing CFOs need to approve deals, where they didn’t need to convince the CFO before.  So it’s not just you 🙂 They’re also going more and more upmarket to counterbalance some of this.

#8.  Just Starting to Get into Payments, Working Capital and Insurance / Fintech

Procore is just starting to get into payments and fintech … at $1 Billion in ARR.  They already manage invoicing, so adding “Procore Pay” to invoicing makes a ton of product sense.  But it’s interesting how hard this is to get right.  Procore is rolling it out slowly.  And they waited all the way until $1 Billion in ARR to go here.

#9.  Founded in Santa Barbara, Still HQ’d There Today

Yes, you can build a great SaaS company from anywhere.  I still say come to the SF Bay if you can.  But …

Not too shabby, Procore!

Go long, folks.  Tooey Courtemanche did.  It worked out.  He founded Procore in 2002.  21 years later, he’s still CEO.


Related Posts

Pin It on Pinterest

Share This