How to Cross 500,000 SMB Customers with Bill’s Founder CEO Rene Lacerte

As we gear up for 2025 SaaStr Annual, May 13-15 in SF Bay, we want to take a look back at a few of our top sessions from last year.  Rene Lacerte, founder and CEO of Bill, came to SaaStr just as Bill was crossing 500,000 (!) SMB customers.

5 Non-Obvious Learnings from Bill.com’s Journey to $1.4B

1. The first 90 days of customer adoption are make-or-break — Bill.com discovered their highest attrition occurs in this critical window, after which customers become remarkably sticky.
2. Regulatory compliance can be a moat, not just overhead — Spending five years securing money transmitter licenses across 50 states created a significant barrier to entry that competitors can’t easily replicate.
3. Your suppliers might actually be your customers — 30% of Bill.com’s core revenue comes from suppliers making payment choices, completely reframing their TAM calculations.
4. For SMB SaaS, aim for 6 quarters of LTV:CAC, not 4 — René adjusted the traditional benchmark because SMB customers stay longer than typically measured.
5. Managing 12+ payment revenue streams requires its own engineering team — Bill.com dedicates 100 engineers just to their payment engine, a hidden cost many fintech founders underestimate.

The Power of Solving a Universal Pain Point

When René Lacerte started thinking about the problem that would become Bill.com in 2004, he was focused on a simple yet profound frustration: why were businesses still paying bills the same way they had 60 years ago? Filing cabinets, physical checks, lost paper – the entire accounts payable experience was stuck in the past.

“I was frustrated,” René explains. “I was looking at the filing cabinet, signing checks, and having paper misplaced. I remember thinking, ‘Why are we still doing this the same way as 60 years ago?'”

This frustration led to a realization that the cloud (though it wasn’t called that yet) could enable something revolutionary: two entities seeing the same transaction from their own perspective simultaneously. This network effect concept was baked into the company’s database design and workflow from day one.

From Zero to $1.4 Billion in 18 Years

Bill.com’s trajectory illustrates the power of compounding growth and long-term vision. Founded in 2006, Bill.com has grown to:

• $1.4 billion in revenue
• 475,000 customers across all platforms (Bill, Divvy, Invoice to Go)
• 250,000 customers on the core Bill platform
• A payment network of 7.1 million members
• Processing $1 trillion in the last 5 years (1% of US GDP)
• 86% logo retention (approaching the coveted 90% mark)

But this success didn’t happen overnight. It took approximately six years for the business to “click” and around 10,000 customers before the network started showing real strength. The company went public in 2019, thirteen years after its founding.

The Three Keys to Bill.com’s Competitive Moat

1. The Network Effect

The network effect is central to Bill.com’s competitive advantage. With 7.1 million members using the platform to pay each other, there’s a high likelihood that when a new customer joins, their vendors are already on the platform. This creates immediate value and reduces friction.

“We had the network effect baked into the database design and workflow from the beginning,” René notes. “We knew the idea of having a network was going to be important.”

2. High Switching Costs

Small businesses lack the resources – like change management teams or IT departments – to easily transition between vendors. Once they’ve spent a decade on Bill.com with hundreds of connected vendors, the switching costs become prohibitively high.

“Think about all the things that are connected to a transaction – documents, employees, suppliers, customers. These are all connections that would be hard to replicate if you left,” René explains.

3. The Regulatory Moat

Moving money in a regulated environment is hard, and Bill.com has built the infrastructure to do it safely and efficiently. The company spent five years obtaining money transmitter licenses across all 50 states – a significant barrier to entry for competitors.

“When you’re moving people’s money, you better be prepared for when things go wrong, because people get angry. The compliance risk is significant,” René says. “It’s a lot of human capital to make it work across 50 states and a trillion dollars of revenue.”

This commitment to compliance requires a dedicated team of approximately 100 engineers and product managers working full-time on the payment engine.

The Economics of Building a Financial Operations Platform

From Payments to Software

Bill.com’s revenue model has undergone a significant transformation:

• Initially: 85% of revenue came from non-software sources
• Today: 81% of revenue comes from software, with total revenue of $1.3-1.4 billion

“We are a software company because we believe you have to have great software to have a great payment experience. If you don’t have that, there’s no point in offering payments,” René explains.

Gross Margins and Revenue Streams

Managing 12+ different payment revenue streams while maintaining strong margins requires sophisticated risk management:

• Bill.com achieves 80% gross margins – comparable to pure software companies
• This contrasts with Shopify (50% margins) and Toast (30% margins)
• The high margins are possible because payment processing was built in-house rather than bolted on

Customer Acquisition Economics

René believes the right target for SMB customer acquisition is six quarters of customer lifetime value:

“The rule of thumb for customer lifetime value used to be one year’s worth of revenue, which is four quarters. But for us, six quarters is the target because customers are expected to last longer than four years.”

This focus on sustainable economics has helped Bill.com maintain profitability while continuing to scale.

The Rising Bar for SMB Software

One of the most significant changes René has observed is the increasing expectations of SMB customers:

“Small to medium-sized businesses have increased their demands dramatically over the last two years. They expect products to be more elegant and integrated, with features like payments, workflow, and AI.”

This shift is driven by the abundance of choice in the market – thousands of cloud-based companies competing for attention. To succeed, companies need to:

1. Focus on becoming a hub for financial operations
2. Provide a consolidated solution that meets evolving needs
3. Consider how to transition from being just a product to a standalone company
4. Explore opportunities for growth and acquisition

Expanding the TAM Beyond the Core Customer Base

Bill.com has rethought its approach to its total addressable market (TAM):

• Core customer TAM: ~6 million businesses with employees in the US
• Expanded international TAM: ~35 million businesses with employees globally
• Supplier TAM: A newly recognized opportunity, as 30% of core revenue comes from suppliers

“We’ve changed our thinking about our network. We now consider suppliers as customers as well, since 30% of our core revenue comes from suppliers who make a choice about payment.”

Despite having 475,000 customers, this represents only about 1.2% of the 33 million SMBs in the US, suggesting significant room for growth.

The Divvy Acquisition: Expanding the Platform

The acquisition of Divvy represented a strategic move to expand Bill.com’s platform capabilities:

“The acquisition of Divvy was strategic because it fits with financial operations and leads with software. It focuses on workflow, budgeting, and other essential aspects for customers.”

Despite entering an increasingly competitive space with players like Brex and Ramp, the acquisition has been successful:

• The spend expense platform is growing at approximately 30% year-over-year
• Integration provides visibility into customer payments and usage of other products
• The platform leverages data and AI to manage credit and drive growth

AI Integration: Beyond the Hype

Bill.com is integrating AI across its platform, but with a practical approach:

“The integration of AI in financial operations is fundamental. It’s not just about having an AI chatbot, but about leveraging AI to enhance the risk engine and improve the processing of hundreds of millions of transactions.”

The company currently makes five million predictions daily on incoming documents and envisions a future where AI streamlines the entire workflow:

“The vision is to use AI to create a workflow where customers can simply send in their documents, and we’ll take care of the rest, making it easy for customers to approve or pay.”

Importantly, René emphasizes that SMBs aren’t asking for AI specifically – they want solutions to pain points like eliminating data entry, simplifying workflow, and moving money quickly.

Building for the Long Haul: Lessons for SaaS Founders

René’s journey with Bill.com offers several key lessons for SaaS founders:

1. Be constructively dissatisfied: Always look for ways to improve and don’t settle for the status quo.
2. Find your “why”: Having a clear purpose helps drive through challenges and maintain motivation over decades.
3. Plan for the long game: True category creation takes time – often 5+ years before seeing significant traction.
4. Focus on customer experience: Bill requires all 2,200 employees to use the product to stay connected to the customer experience.
5. Balance tech debt with innovation: Even after 18 years, Bill continues to invest in modernizing its platform while developing new capabilities.
6. Design for network effects from day one: The most valuable moats often take years to develop but need to be architected from the beginning.

For founders building in the SMB space, René’s message is clear: the market is more demanding than ever, but the opportunity to build category-defining platforms that solve real pain points remains enormous.

As Bill.com crosses half a million customers, its journey demonstrates that patient, persistent execution combined with a clear vision can create extraordinary value in even the most mundane business processes.