A study by GetLatka has revealed that of the 156 fastest growing SaaS companies of 2019 - lemlist has taken the third spot.
With a team size of five, they've managed to boost 2018 revenue from $48k to $720k, a growth rate of 1400%. As one of the 53 bootstrapped companies on the list based outside of San Francisco and New York, lemlist is also one that's turning a profit.
To explain the fantastic growth they had in 2019, it's important to pull back the curtain on the success of the email outreach industry as a whole, and why the channel remains popular amongst marketers.
How lemlist ranked compared to other email outreach companies
SaaS is exploding; there is no doubt about that. And when we talk about marketing automation, reports predict the industry will be worth almost $30 billion globally by 2026.
The reason behind its popularity is because it remains the no #1 chosen channel for marketing and sales teams.
In Drift's 2019 study, State of Conversational Marketing, email came out on top as the leading communication channel for businesses to interact with their customers.
Of course, lemlist is up against some big names like Adobe Systems Incorporated, HubSpot, Oracle Corporation, and Salesforce, along with other companies like Outreach and Mailshake.
So, how did they compare to them in 2019?
The closest competitor in the study, OmniSend, sits at #25 on the list with a growth rate of 232%. PushEngage was at #39 with a 166% growth rate. Looking at these numbers, lemlist's growth rate seems remarkable.
Yet getting the first 8000 customers on board in their first year and achieving a 33.19% Month over Month growth wasn't a result of financing or expensive marketing campaigns. Nope, it was the result of a lot of experimentations and testing.
To achieve that growth, the focus was on seven core pillars:
- ⬆️ Growing their audience, making friends and being kind
- 📧 Using their product and telling everyone about it
- 🚼 Giving birth to a baby product and teaching it how to walk and talk like a real human being
- 📝 Writing kick-ass content
- ❤️ Sharing the lemlist love and knowledge everywhere
- 🤑 Not being afraid to ask for more money
- 🤝 Knowing our users better than we know ourselves
Their CEO, Guillaume Moubeche, detailed their first year strategies in this article.
Part of this was getting in the trenches with their future (and current) customers. They built a #family page on Facebook to launch their ideas and create discussions, and spent a lot of time creating valuable content that was repurposed across a ton of growth channels.
The growth has been a mix of popularity in the respective sector, keeping the costs low, and building up trust in the product using a combination of methods and platforms.
1400% YoY growth without taking funding
First off, lemlist doesn't have hundreds of employees on their books. Or even tens. Apart from the three founders of lemlist, they employ just two people.
365 days after launching our product, they reached the quarter of a million Annual Recurring Revenue (ARR) milestone. Part of the growth is driven by the fact they're a fully bootstrapped startup (with $0 in funding), so reaching profitability as quickly as possible has always been their primary focus.
Although the churn is still a bit high, their Customer Acquisition Cost (CAC) is very little, thanks to the efforts to bring new customers on board through grassroots marketing across social media and LinkedIn.
What's more, lemlist went from 0 to 8000+ customers in a single year thanks to LinkedIn videos and their popularity. And as each of these customers has a Lifetime Value (LTV) of $750, it's not hard to see why the growth rate has hit the numbers it has.
Another indicator of lemlist's strong growth is the Net MRR Churn, which has evolved from 10% to -2%. Their negative net MRR churn rate means that the revenue was generated by people upgrading (adding more seats) is higher than the revenue lost by actual customer churning.
But two of the metrics that are most exciting about their growth is the annual Net Revenue Retention (sitting at 104%) and Expansion Revenue (sitting at 100%). Looking at the Expansion Revenue, lemlist is sitting in a sweet spot amongst other SaaS companies as a whole:
Yet it is their Net Revenue Retention that's one of the most exciting metrics predicting the future. This metric looks at the total revenue of a company and deducts any revenue churn (caused by departing/downgrading customers) and adds any revenue expansion from upgrades, upsells or cross-sells.
SaaS Venture Capitalists look at Net Revenue Retention as one of the most important metrics when trying to figure out the overall health of a company. Lighter Capital's Rachael Pilcher says the metric is perhaps the most fundamental indicator of a customer's success and happiness with a company's product.
"If you’re a highly successful company with happy customers, your NRR will most likely exceed 100%," she says.
"If you’re closer to 0%, it’s time to start taking a serious look at where your customers are churning out and take evasive action."
All signs are looking positive for lemlist. Not only did they had an amazing year of growth in both customers and revenue in 2019, but they're also sitting in a perfect spot for 2020 to ride the wave of the email outreach surge that's coming this decade! 🥳