This analysis based on Shopify's IPO filing was first publishing in the SaaS Business Asia's bi-monthly newsletter. Be the first to read future curated news and analysis about the SaaS ecosystem in Southeast Asia:
Shopify captures 3% of its customers’ revenue!
The well-known e-commerce startup Shopify is moving to the next rung of the ladder and has filed for a proposed IPO. The company is looking to raise $100 million to continue its mission to bring 46 million target retailers online.
We've looked at the IPO filing document and we found out that Shopify is able to collect as much as 3% of the revenue its customers generates through its platform! That figure should inspire any SaaS entrepreneur.
Its customers sell US$35k+ of annual merchandise annually through Shopify
With a gross merchandise volume, i.e. total sales of stores run on Shopify, of $1.3bn in Q1 2015 across 160,000 merchants at the end of the quarter, we can estimate the average of $35k+ annual sales by Shopify's customers.
Average revenue per customer is $80 per month, with $45 coming from subscriptions.
Shopify generated $22m in subscription revenue in Q1 2015 and $37m in total revenue, with 160,000 merchants at the end of the period. $80 per month is ~$1,000 per year, and around 3% of the stores' average sales.
8 years to reach $100m in Annual Recurring Revenue (ARR)
Shopify was launched in 2006 and reached $24m in quarterly revenue in Q2 2014 (with merchant services accounting for 33%). Annual revenue for 2014 stood at $105m, up 100% from 2013.
$230k of revenue per year per staff member
As of March 2015, Shopify has 632 employees.
6% average compounded monthly growth, driven by merchant services more than subscriptions.
Quarterly revenue grew from $18.8m to $37.3m between Q1 2014 to Q1 2015
Growth from subscriptions is at 5%, while growth from merchant services (currently 40% of revenue) is at 8%.
Shopify achieves negative churn
Shopify boasts a monthly billing retention rate of 101%.