Npo saas market
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The document discusses the non-profit software market, which is valued at $8 billion globally and growing at a 10% compound annual growth rate. It is an attractive market due to the recurring revenue SaaS business model and opportunities for cross-selling additional products. While there is one large player, the market remains fragmented with room for additional large competitors. Growth drivers include the transition from on-premise to cloud-based software and expanding into adjacent verticals and geographies.
Npo saas market
- 1. By Patrick Gildea 9/6/17 1 DRAFT FOR DISCUSSION PURPOSES ONLY
- 2. 則 NPO Software an $8 billion global market (1) 則 >10% CAGR, reaching $12.9 Billion by 2022 (2) 9/6/17 2 Large Growing Market Attractive SaaS Model Fragmented Landscape Several Growth Drivers 則 Recurring revenue model, typically high retention / low churn 則 Low cost to maintain annuity; scale delivers strong EBITDA 則 Transitioning from on-premise to cloud a key market accelerant 則 Blackbaud only scaled player, with only a handful of well funded competitors- room for 2-3 scaled leaders in space 則 Several adjacent verticals and likely add-on cross-sell/upsell opportunities 則 Market shift from on-premise to cloud; digital transformation 則 Expansion via International, enterprise, vertical reach and product cross/up sell Notes: 1) Forbes article 6/15/2017 and company website 2) Grand View Research 12/2016 and own estimates based on census data
- 3. 則 $335 Billion annual U.S. contributions (1) 則 25% increase in # of U.S. non-profits 2001-2011 (1) 則 Online contributions growing >10% YoY (1) 則 Global software market for NPO an estimated $8Bn 9/6/17 3 Non-profit is a large market opportunity Non-profit Software growth driven by digital transformation Winners will be companies that can differentiate through a combination of: 則 Email, social media, web multi-channel > direct mail, phone and TV ad multi-channel engagement 則 Big data, personalization and automation becoming critical to conversion 則 Positioning as single source of truth (salesforce) or at the center of the ecosystem (Okta) 則 Constant innovation doing it better/faster 則 Unique content - analytics, insights and predictive modelling 則 Table stakes simple product with great UI/UX and comprehensive features 則 Brand recognition word of mouth and reference accounts 則 Aggressive sales / marketing 1. Source of data Blackbaud investor presentation, various research. 2. Estimate based on various research. Payments 24% Online 14% Foundatio ns 5% Political 8% Financial 12% Education 11% Corporate Social Responsi bility 4% Arts & Culture 2% Data & Analytics 7% CRM 13% 2017 NPO Software Market 1. Source of data Blackbaud investor presentation 2016, various research. 2. Political on total global political campaign funds raised per year of $13.3Bn from various websits x estimate of tech spend at 5% 3. Excludes services 4. Payments assumes inclusion of processing fees. $8.2Bn
- 4. Digital Transformation Driving Growth 則 Digital age transformation and convergence of tools to help non-profits scale their user base, increase fundraising and more cost effectively support operational growth are driving the demand for software 9/6/17 4 Legacy non-profit software market Niche focus On-premise Siloed Demands of today non- profit organizations. Suite of products Latest tech and services Integrated with leading tools
- 5. with one large public company and many small under capitalized players; there is room for a strong #2 to emerge 9/6/17 5 Market Size(1,2) (in Billions) Growth(1) Competitors Political Payments CRM Financials Online Data & Analytics Education Foundations Corporate SR Arts & Culture $0.67 $1.95 $1.10 $0.99 $1.10 $0.56 $0.92 $0.42 $0.34 $0.19 Medium Medium Medium High High Medium Low Low Medium Low 1. Source of data Blackbaud investor presentation, various website research. 2. Campaign spend based 5% of estimated total global political campaign funds raised per year of $13.3Bn
- 6. 則 Blackbaud appears to have most comprehensive software and services (albeit across several separate systems) and is the largest in terms of revenue (~$400M in SaaS) with NB/Everyaction tied for distant second 則 NB robust partner integration, full suite of vertically integrated features and position as platform are key to differentiation but no clear secret sauce 則 Everyaction has exclusive Democratic database, once this is freed, opens up greater competition. 9/6/17 6 Product Category Political/General NPO Focused Companies Web/Mobile Community (Membership Mgmt.) Engagement (CRM, Email, Social) Fundraising Tools Services Strong Weak Index Analysis based on review of companies' website marketing and support pages. Web/Mobie features analyzed include: custom templates, SSL, responsive design, SEO, Analytics. Engagement features analyzed include: dashboard, email templates, segmentation, personalization, spam score, A/B multivariate testing, email analytics, text support, soft phone, bank/dialing, history, direct mail integration, automated workflows. Community management features analyzed include: dashbaords, filtering, tagging, segmentation, user sign up / account creation, user profile/social graphing, duplicate mgmt, import/export, other 3rd partty user data, personalization/analytics, task mgmt, integrations, leaderboards. Fundraising features analyzed include: dashboards, transaction tracking, task mgmt, contact history, document mgmt, payment processing, social integration, access to networked profiles, financials, compliance and gamification. Tools features analyzed include: event mgmt, ticketing, social integration, API access, 3rd party integrations, and other niche features. Services refers to customer support, account management and professional services.