edrone with a strong start to 2023

I’m thrilled to report a strong start to 2023. Our Q1 revenue has surpassed $5.5 million ARR, resulting in an 11% growth in just three months. March alone contributed to 5% of our growth, marking the best monthly growth since October 2021. What's even more exciting is that our growth is in contrast to the trend in the industry. According to reports, the median growth rate of SaaS companies in CEE in 2022 was 24%, while eCommerce declined by 5%. The good news I’m sharing can be attributed to our focus on improving performance metrics and growth rates, experimenting with flexible pricing, and concentrating on our most important markets. With our customers seeing an 18% YoY growth rate, we are confident about our long-term growth prospects.

Our growth accelerated in 2023!

We started the year with revenue of $5million. We close the first quarter with more than $5.5m and an 11% growth in three months. March alone is responsible for 5% growth and this is the best monthly growth since October 2021. Forecast for this year is an acceleration of growth.

We are improving performance metrics and growth rates when around SaaS companies are slowing down and our TAM, or eCommerce is experiencing declines. According to the Vestbee and WEG (Warsaw Equity Group) report, the median growth rate of SaaS companies in CEE in 2022 was 24%, and the 75th percentile is somewhere around 35-40%, while according to the CSO, eCommerce shrank by 5%.

The year 2022 was a big slowdown for SaaS and technology companies and 2023 is unfortunately a continuation of this trend. We hear about very many problems of SaaS companies, How come we didn't reverse this trend in edrone?

First, more data for a broader context. We closed 2022 with 39% YoY growth, 2021 with 64% growth. Base line projection for the current year is 40% and 56% in the more optimistic forecast. We do not plan to raise capital this year. This means that we are increasing our efficiency while consistently reducing the burn rate. In other words, as revenues increase, each month brings us closer to profitability, and we will not need additional financing to achieve it.

Data presented based on monthly recurring revenue from our two companies edrone sp. z o.o. and Edrone Brasil Tecnologia Ltda.

Transparency

Sharing the current results of a privately held SaaS company is not a common practice, but I think in the situation SaaS companies find themselves in today, it's worth sharing the good news and talking about the decisions that led to it.

We started the year with revenue of $5million. We close the first quarter with a result of more than $5.5m and growth of 11%. The last month, March, is responsible for 5% growth.

In the previous year we grew by 39% and the year before by 64%. In H1 '22 we saw a slowdown, and half-year growth was less than 18%, due to a series of experiments including testing several new markets and an opportunistic strategy. In the middle of last year, we stopped initiating new experiments, and from January 2023, we focused 100% only on those markets where we had previously done full product localization and support. In our case from GoGlobal, the Land & Expand strategy, that is, running operations in markets that have localization of educational materials, support of support in the local language and full translation of the system, support local payment systems, etc., works much better.

What has allowed us to improve efficiency?

Since last July, we have also introduced a more flexible pricing based on system usage. The license fee increases as the database increases. We also have not decided to raise license fees so far due to inflation. We have cut the minimum plan by more than half compared to the one before July. ARPU, which initially declined returned to its previous level after 9 months. At the same time, we reduced CAC by 30% in 6 months, and the LTV/CAC ratio was over 6.?

But the best news, which also allows us to believe in long-term growth, is that our customers' average year-on-year turnover growth was 18% in 2022. Against the backdrop of eCommerce as a whole, which saw a 5% YoY decline in PL according to the CSO.

Key Takeaways:

1. experiment with pricing so that it is attractive to customers but provides a gradual, organic increase in the amount of subscriptions.

2. In times of low supply and high capital prices, focus on improving your key metrics.

3. focus on your most important markets.

Special thanks to WEG for sharing CEE SaaS insights.

All images: edrone, Midjourney