• by Ray Schultz , August 16, 2021

Mailchimp has not yet announced a buyer for all or a part of its business, but observers say the Atlanta-based company could get its alleged $10 billion price — or more.

Bloomberg reported on Friday that Mailchimp was open to sale of all or part of its ownership. To explore this possibility, Email Marketing Daily spoke with Massimo Arrigoni, CEO of BEE, a business unit of Growens.

Email Marketing Daily: Is Mailchimp really worth $10 billion?

Arrigoni: Mailchimp may actually sell for more. In 2019 they had reached $700M in annual revenue and with at least 25% in YoY growth in the last two years — ending up with annual recurring revenue of over $1.1B. 

Mailchimp is very profitable: It reportedly has $300M in earnings before interest, taxes, depreciation, and amortization — 27%), it could reach $14-15 billion in valuation, more if there's a bidding war especially considering this research from SaaS Capital re: Private SaaS Company Valuations: Q2 2021 Update. 

EMD: Who would be interested in paying that price?

Arrigoni: Any large company that has a strong focus on small businesses: take a company like Intuit, that serves mostly small businesses: market cap of $148b. They could certainly afford it and would be adding a whole new marketing layer to their offering.

Another potential buyer, although they have had quite a rivalry over the last several years, is Shopify, market cap of $186b.

HubSpot too could be interested in growing their penetration in SMBs, so that they automatically become the platform of choice as those small businesses scale up. In their case, given their $31b valuation, it would be a big purchase for them There are many others: even Microsoft itself could see something like Mailchimp as a marketing extension of Office 365.

EMD: Is the Mailchimp audience of sufficient interest? 

Arrigoni: Absolutely. You are talking about an ocean of 14,000,000 small businesses from virtually every corner on earth.”  Anyone that markets to SMBs would love that.

But there’s more to it. It’s not just small businesses: there are lots of large senders of email on the Mailchimp platform, spending thousands of dollars per month.

As far as I know, there is no marketing platform that sends as many emails as they do (333 billion emails in 2020: So, you could also see companies that focus on the higher end of the market buy Mailchimp as a top-of-the-funnel, freemium play (the same report mentioned above indicates that in 2020 they were signing up ~14,000 new users per day, from 178 countries).

EMD: Is this a harbinger of even greater consolidation in the email service field?

Arrigoni: Yes, there is and there will be consolidation in the space — consolidation not just in the email space, but in martech overall. There are simply too many providers of marketing technologies (over 8,000, as the famous “landscape” shows.

In fact, Mailchimp itself has acquired several companies in the last few years. In the case of Mailchimp, they acquired different pieces of the marketing stack. In other cases, you see companies acquire different segments of the market (e.g. CM Group’s acquisition of Emma, Sailthru and Selligent).