Shopify and Toast and Monday Are On Fire: There’s No “Downturn” in B2B2C

So while many in B2B2B are still struggling today — Salesforce has predicted growth will fall to single-digits — the U.S. economy overall remains very strong.

So it would make sense that SaaS companies that sell primarily to customers outside of tech, “B2B2C”, would be having their moment.  Even if B2B2B folks that were on fire in 2021 are struggling now.

And indeed that’s the case.  SaaS leaders that sell to SMBs selling to end consumers … are often doing pretty darn well today.

#1.  Let’s Start With Shopify.  Growing 21% at $8.2 Billion in ARR — And Accelerating (!)

Shopify is on fire.  After a post-Covid slowdown bump, Shopify has rocketed back as ecommerce overall has continued to gain more and more market share.  Even at $8+ Billion in ARR, it grew 21% last quarter.  Even more importantly, it’s projecting faster growth going forward.  Growth in “the low-to-mid twenties”.  That’s incredibly impressive at Shopify’s scale, coming up on a $10 Billion run-rate.

Now it’s not all roses and daises.  Parts of ecommerce are growing more slowly, and others from Amazon to Amex have warned of slower growth in ecommerce.  But the growth is still real and a force of nature.  And Shopify has leaned in on larger merchants and business customers to fuel growth.

#2 Toast is Growing 29% at $1.5 Billion in ARR

SaaS selling to restaurants that sell to consumers.  There are some headwinds in this space as the cost of going out in particular has outpaced inflation.  But overall, growth in this segment is outperforming.  And Toast is one of the leaders we all know best.

They’re now growing 29% at $1.5 Billion in ARR.  With very strong EBITDA and now GAAP profitable.  SMBs and mid-market are driving most of the growth.  That’s down a smidge from last quarter, but they are importantly projecting this growth rate to stay pretty stable (and high).  Unlike B2B2B leaders from Salesforce to Asana, who are cutting their growth estimates in half or below.

 

#3. Monday.com is Growing 34% at $940,000,000 in ARR

Another great case study of a SaaS leader “less exposed” to tech.  Monday’s main customer base is outside of tech.  Their growth has stayed strong, while adjacent players that sell more to tech have seen bigger slowdowns (e.g., Asana).  More here.

 

The “downturn” in tech today?  Again, it’s a bit uneven. Security is on fire, AI is having a glow up, and B2B2C in many cases remains very, very strong.  Not 2021 strong.  But very, very strong.

Find your pockets of strength.