ByteDance-Backed Feishu Sees $100M Annual Recurring Revenue in 2022
On February 16, Feishu, an office tool owned by Chinese tech giant ByteDance, announced that its annual recurring revenue (ARR), a key indicator, reached $100 million in 2022, an increase of 2.7 times compared with 2021. This is the first time that Feishu has disclosed its core business indicators since its establishment, according to 36Kr‘s report.
For software companies, the higher the proportion of ARR in total revenue, the higher the stability of revenue and the higher the future potential. “Crossing $100 million ARR is a very important milestone for Software as a Service (SaaS) products,” Xie Xin, CEO of Feishu, said.
In comparison, according to the statistics of Bessemer Venture Partners, the top 25% of the listed SaaS companies in the world need to spend an average of 5.3 years to reach an ARR of $100 million, including well-known companies such as Slack, Shopify and Twilio. It took Feishu three years to reach this figure.
Founded in 2016, Feishu, formerly known as an efficiency tool within ByteDance, officially began offering its services in China in 2019. Since 2021, the company has established a commercialization strategy focusing on major customers and has secured many orders from tech giant Xiaomi, automaker Li Auto, electronics manufacturer Anker Innovations and mobile fitness app Keep.
Since 2022, Feishu’s rivals, such as DingTalk and Tencent Meeting, have begun to call for paying more attention to customer composition, income, self-developed products and delivery quality besides the scale of users. Feishu also expressed the same opinion at an internal meeting on February 16.
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The reason for the shift is that after three years of the epidemic, although the office tool market has ushered in a wave of rapid growth due to the demand for telecommuting and online courses, users’ willingness to pay is not very strong.
Many companies have vigorously promoted commercialization since last year. For example, after giving up the goal of 1 billion DAU, DingTalk focused on large customers with a stronger ability to pay for their services. At Tencent‘s internal meeting at the end of 2022, Pony Ma, the firm’s founder, said that the Cloud and Smart Industry Group (CSIG) should begin to look at subscription offerings to boost revenue.