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Best of Bootstrapping: Mailchimp Bootstraps to $600M Revenue

Posted on Thursday, Mar 28th 2019

According to a Transparency Market Research report, the worldwide market for email marketing is expected to grow at a CAGR of 19.6% from $4.51 billion in 2016 to $22.16 billion by the end of 2025. Mailchimp is a bootstrapped business that provides email marketing services targeting small businesses.

Mailchimp’s Journey

Mailchimp was started by Ben Chestnut and Dan Kurzius in 2001 as a web design firm called Rocket Science Group. The firm then focused on big, corporate clients but started an email marketing service called Mailchimp for their smaller clients.

Ben and Dan loved serving the small business users. They had a keen understanding of the nuances in running a small business. Ben grew up helping his mom around her hair salon that she ran from their family kitchen, and Dan’s parents ran a bakery. With Mailchimp, they found that working for small businesses gave them the freedom to be more creative and adapt quickly to their needs. In 2007, Ben and Dan decided to shut down the web design firm and focus exclusively on Mailchimp and small business owners.

Mailchimp saw a five-fold jump in its userbase after it introduced a freemium option in 2009. In 2014, it hit the milestone of 10 billion emails per month. In 2017, Mailchimp launched its marketing automation service with a slew of new channels: Instagram, Facebook, and Google ads, landing pages, and more. That year, it was reportedly signing up 14,000 customers per month.

Today, Mailchimp serves over 16 million customers around the world. The company is headquartered in Atlanta with additional offices in Brooklyn and Oakland.

Mailchimp’s Offerings

Mailchimp follows a freemium pricing model. The service is free for up to 2,000 emails. Premium plans start at $10 per month. It also has a pay per use plan for occasional email senders.

Using the Mailchimp platform, subscribers can send emails as well as create email campaigns, landing pages using custom domains, pop-up forms, postcards, and Google, Facebook, and Instagram ads. It also helps automate marketing, welcome emails, product recommendations, order notifications, and abandoned cart emails. It also offers optimization tools for segmentation and tagging, A/B and multivariate testing, and data analysis and reports.

MailChimp integrates with other popular applications and systems such as Salesforce, Eventbrite, Google, Twitter, Facebook, Shopify, and SurveyMonkey.

Mailchimp’s Financials

Mailchimp is a bootstrapped success story. It has not raised any outside financing and is still 100% founder-owned. It doesn’t reveal details of its financials, but it is estimated to profitable with revenue of $600 million in 2018.

Mailchimp’s customers include East Fork, Chronicle Books, Fader, Sweat, and Magnolia Bakery. About 20% of its business comes from e-commerce businesses followed by nonprofits and educational organizations.

Its competitors include Campaign Monitor, Constant Contact, AWeber, AcyMailing, Mailjet, VerticalResponse, Robly, iContact, Zoho, SendinBlue, OmniSend, Moosend, Act-On, Iterable, and Mad Mimi.

Mailchimp’s Acquisitions

Mailchimp has made two acquisitions so far. In 2011, it acquired newsletter platform TinyLetter, which continued to remain a standalone unit. Founded in 2010, Atlanta-based TinyLetter was founded by Philip Kaplan and was bootstrapped. It is eventually expected to merge with Mailchimp’s newsletter service.

Last month, Mailchimp acquired another bootstrapped startup called Sawa. Sawa uses automated design technology to design commonly-needed brand communication materials. Sawa was founded by Francis Tao in 2017 and is estimated to have $1 million in revenue. In 2018, Sawa joined Ocean Accelerator, which typically backs companies with a seed investment of $50,000. It went on to join Techstars Atlanta in July 2018.

Mailchimp’s bootstrapped success story is a source of inspiration for other startups. Mailchimp is now on the next step where it is providing exit for other capital-efficient or bootstrapped startups. What other capital-efficient businesses can Mailchimp acquire?

This segment is a part in the series : Best of Bootstrapping

. Bootstrapping to an Exit
. Why is Bootstrapping Important?
. How Can You Play this Low-Probability Game Intelligently?
. Do NOT Go to VCs as Beggars - Go as Kings
. Excess is NOT Required for Success
. Bootstrap First and Raise Money Later
. Some Bootstrapping to Exit Case Studies
. The Buy Side of Bootstrapping to an Exit
. Blitzscaling vs. Bootstrapping
. Bootstrapping to Unicorns
. Cinedigm Acquires Bootstrapped 1Mby1M Company Future Today for $60 Million
. Mailchimp Bootstraps to $600M Revenue
. Bootstrapping from Arizona to $10 Million
. Bootstrapped Basecamp Executes a No Nonsense Strategy
. How Under30Experiences Bootstrapped to $5 Million
. Bootstrapping with a Paycheck
. How CEO Amjad Hussain Bootstrapped using Services from Michigan
. Seed Investors Who Like Bootstrapped Businesses
. How iHeartRaves CEO Bootstrapped a Niche e-Commerce Company to $20 Million
. Bootstrapping with Services
. How The Intern Group CEO David Lloyd Bootstrapped to $13 Million
. How Passageways CEO Paroon Chadha Bootstrapped from Indiana
. How SmartBuyGlasses CEO David Menning Bootstrapped to $50 Million
. Death by Overfunding
. How RainmakerForce CEO Mack Sundaram Bootstrapped Decisively to $5 Million+
. How FormAssembly CEO Bootstrapped a Virtual Company with a Paycheck
. TimeSlips CEO Mitch Russo Bootstrapped to Exit with Sage
. The VC-Entrepreneur Compensation Disbalance
. BioConnect CEO Bootstraps with Sophisticated Strategic Maneuvering
. Tremend CEO Marius Hanganu Bootstraps from Romania
. Gesture CEO Jim Alvarez Bootstraps to $10 Million
. SproutLoud CEO Bootstraps to $30 Million from Florida
. Tuft & Needle CEO Bootstraps to Over $100 Million
. Co-founders Bootstrap Linguamatics to Over $10M from the UK
. Ownership Matters
. Vainu Co-founder Mikko Honkanen Bootstraps from Finland
. Entrepreneur Couple Bootstraps to $10M from Colorado
. Power2Motivate CEO Bootstraps to $80M from Canada
. Financial DNA CEO Bootstraps to $10M+ from Australia
. Big Barker CEO Bootstraps a Niche E-commerce Brand
. PrecisionLender CEO Bootstraps to Over $10M from North Carolina
. Master Bootstrappers with Over $1B in Exits
. Ultra Mobile Founder Bootstraps to Over $100 Million
. Bootstrapping a Two-Sided Marketplace to $10M
. Can You Bootstrap a Virtual Company to Over $5 Million?
. Capital Efficient Entrepreneurs Turn $1M into $80M
. Discussing the Journey Through Failure to Success
. From a Small Town to $12 Million
. Bootstrapping to Y Combinator and $10 Million Series A
. Bootstrapping a Marketplace to Over $10 Million
. Freightwise Bootstraps to $33 Million
. Bootstraps First to $5M ARR, Raises $10M Later
. Bootstraps in Europe, Raises Money and Goes Global in the US
. English Major Bootstraps a Tech Company
. Bootstraps with a Paycheck to $15M from Tennessee
. Queue-It Bootstraps from Denmark to the US
. Bootstrapping A Virtual Company To $25M
. ActiveCampaign CEO Bootstraps Using Services to $40M
. Alteryx Bootstrapped with Services to a Public Unicorn
. Inspyrus Bootstraps Using Services to an Awesome Business Model
. CEO Bootstraps Using Services to Millions from Russia
. Wiredrive CEO Bootstraps Using Services to $10M
. Scaling to Over $10M by Bootstrapping Using Services
. Bootstraps Using Services from Poland to a US SaaS Company
. ButcherBox CEO Bootstraps a Perishable Meat Business to Significant Scale
. Waveform CEO Bootstraps to $8M
. Bootstrapped Entrepreneurship from Estonia
. From Laid-off Engineer to Successful Startup CEO
. Imagine Easy Solutions CEO Bootstraps to Exit
. BannerBuzz CEO Bootstraps to $35M
. Bootstrapping a Virtual Company to Scale
. Bootstrapping Using Services from Wisconsin
. Best Tactic for B2B Startups
. Bootstrapping by Piggybacking from Romania
. Bootstrap First, Then Scale with VC Funds
. Bootstrap to +$10M First, Raise Money Later
. Madwire CEO Bootstrapped First, Raised Money Later to $120M
. Bootstrap Using Services First, Raise Money Later

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