Despite a turbulent market, Wix, a $5bn SaaS leader, outperforms estimates. A significant catalyst? Their partners grew 📈 36% YoY, ~3X rate of their direct business, explains Avishai Abrahami, its co-founder & CEO. Let’s dive into how Wix re-oriented their strategy towards partners.
Wix is a leading website builder on the market. It simplifies website design and development with its no/low-code platform. Whether you're a creator or a small business, Wix provides the tools to craft your website, blog, event webpage, or online store.
Founded in 2006, the company is on track to achieve an impressive $1.5Bn ARR in FY23.
🎯 The Shift Towards Partners
Initially, Wix's primary audience was "self-creators". However, as growth in this segment began to plateau, Wix recognized the untapped potential of partnering with agencies and freelancers who create websites for others, opening the door to a sustainable, compounding revenue stream.
Wix's pivot to a partner focus began in 2019, and the momentum surrounding their partner business has become increasingly evident in recent quarters.
Now, partners contribute to 30% of Wix's total revenue, and this proportion continues to grow. This strategic move helped the company achieve $390M in revenue in Q2FY23, surpassing their projections.
Lior Shemesh, their CFO, remarked in Aug ‘23:
“If you look at the net growth of the ARR, which was about 66% this quarter and Q1 was more than 90%... we managed to generate an incremental revenue to our business, mostly coming from partners.”
🏆 Unlocking Compounding Growth with Partners
Wix collaborates with digital agencies and freelancers who build and manage websites for their clients. While partners demand more advanced features and have distinct needs compared to individual users, they also present vast opportunities.
3 undeniable benefits of partner business that Wix discovered:
✔️ Partner revenue compounds mid-long term, driving 49% CAGR growth (vs 14% direct)
✔️ Partners bring users with higher ARPU, greater product attachment, payment volume, etc.
✔️ Partner revenue boasts high retention, with an NRR of 116% even in 2022.
Nir Zohar, President and COO, elaborated:
“Compounding growth is inherent to the difference between partners and self-creators. Partners take on more and more projects over time. And therefore, each partner generates more subscription revenues over the lifetime of the cohort.
Partners' website also delivered higher GPV [Gross Payment Volume], and they have a deeper grasp of advanced capabilities, adopting more business solutions and generating higher ARPS [Average Revenue Per Subscriber] across the board.”
Wix also learned that partners can 3X (triple) their Total Addressable Market.
Impressive, don't you think?
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