Vimeo is certainly a fascinating web service, once we’ve used for years at SaaStr and even Adobe Sign / EchoSign before that, and we’re excited to have CEO Anjali Sud presenting at 2021 SaaStr Annual Sep 27-29 in SF Bay Area!
Vimeo started off 16 years ago as a creator-focused alternative to YouTube, and in many ways it still is, with over 200,000,000 users. But over time, it’s added a large enterprise and B2B component for marketers and others to track, manage and market videos that we’ll spend a bunch of time digging in on, as it’s the fastest-growing segment, growing from little-to-none in 2017 to 25% of revenue today.
Today, Vimeo is at $330m in ARR growing a stunning 56% year-over year!
It has 1.5m self-service subscribers at an average of $214 year, paired with 3,300 enterprise customers that go through the sales team that pay $22,000 a year on average.
5 Interesting Learnings:
#1. 75% self-service, 25% sales-driven. Vimeo has an interesting blend of self-service / freemium revenue and sales-driven larger deals. It has both (x) 1.5m self-service subscribers at an average of $214 year, (y) combined with 3,300 enterprise customers that go through the sales team that pay $22,000 a year on average.
Going upmarket and selling more to existing customers are critical to Vimeo’s growth, as revenue growth substantially exceeds new subscriber growth of 21%.
2. Upgrades are key to growth, 110% NRR from enterprise customers. The NRR story, told differently. Vimeo has 110% NRR for its enterprise customers, but doesn’t break it out for the self-service business. In any event, 25% of their new bookings come from the existing base.
3. Closing more $20k+ deals other key to growth. $2k+ month deals are growing 85% year-over-year, much faster than the self-service business. These “enterprise” deals are only 1% of customers by number, but by far the fastest-growing segment of revenue. Put differently, 1% of the customers are fueling half the growth, and the long tail, the other 99% of customers, make up the rest of growth.
4. Just 674 employees or almost $500,000 revenue per employee. Vimeo is pretty efficient, leveraging the low cost of the self-service side of its business to hit almost $500k in revenue per employee.
5. Gross margins grown to 70%. An interesting note for a product with a lot of hosting and serving costs. Vimeo has driven its video costs down and now has SaaS-like 70% gross margins, up from 60% a year ago.
And a few other interesting learnings:
6. Publish diversity metrics, 39% female, 62% white. “Based upon employee self-identification, 62% white, 12% Asian, 7% of two or more racial groups, 4% black, 7% of Hispanic or Latin background, and 0.2% Native Hawaian or other Pacific Islander; 8% declined to self-identify. As of the same date, our workforce was 60% male, 39% female, and 1% non-binary. We publicly publish metrics on these and other measures of diversity at least once annually.” Helpful to all of us to see newly public entities share their metrics and progress.
7. 50% of revenue outside the U.S. The rest of the world loves Vimeo!
Vimeo is an incredible success story of tenacity, being early to market, and finding new markets and segments to grow in. Yes, YouTube today does a reported $20 Billion in revenue. That means Vimeo is 1.5% the size of YouTube. But the market is so large, Vimeo has won in segments YouTube doesn’t really care as much about (marketers, segment of professional creators).
Every $100B+ market can spawn many unicorns and maybe even 2-3 decacorns Even just out of the 10%-20% of the market they ignore. The Cloud is just that big.