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SME CRM

Old CRMs were complicated, expensive, and limited. Simpler, cheaper CRMs targeting SMEs have arrived.

Overview

Flexible and more affordable CRM apps look to capture the vast SME market

Customer relationship management (CRM) platforms for small and medium enterprises (SMEs) form a sub-segment of the larger CRM market and cater to smaller companies (less than 500 employees). These SME-focused CRM platforms (offered mostly by relatively small vendors) are differentiated by their more affordable pricing and many free features, focus on essentials, basic customization, and simplicity. Some SME CRM vendors also provide social media integration, automation, and extensive customer support.

Considerable market opportunity remains for SME CRM providers because SMEs account for more than 99.9% of all businesses, 45% of economic activity, 47% of the labor force in the US, and have a comparatively lower market penetration. SME CRM penetration for SMEs stands at around 44% versus around 91% for regular CRMs for all enterprises with more than 10 employees.

What's driving this industry?
Market Sizing

SME CRM market in the US could reach USD 7.2- 9.3 billion by 2026

Conservative case

USD 7.2 Bn

68%% penetration
Base Case

USD 8.2 Bn

78% penetration
Expansion case

USD 9.3 Bn

88% penetration
USD billion0246810202120222023202420252026
View details

COVID-19 IMPACT

  • CRM user penetration among employer SME firms in the US has jumped to 50% by September 2020 (from 35% a year ago).

  • This faster adoption comes from the increased rates of remote work, with more companies relying on online marketing and sales. These factors demand a ramp up of digitalization to manage client relationships, which businesses can achieve through the adoption of Small and Medium Enterprise Customer Relationship Management (SME CRM) platform adoption.

  • Further, 40% of SMEs are focusing on investing on marketing while 20% of SMEs are looking at increasing employee strength to improve customer interaction and service. This provides a positive outlook for the SME CRM market in the short to medium term.

  • However, with the second wave of the pandemic in full force, nearly 14% of SMEs are planning staff reductions, while 74% are seeking further government assistance, which could partially offset the positive impact coming from the rising SME adoption rates.

View detail

Market Mapping


Majority of the incumbents focus on the collaborative segment and have entered the SME CRM space through in-house development. While most of the disruptors are pure plays, there are a few that operate in multiple segments, such as Pipedrive and Insightly. Overall, the majority of the players are involved in the operational and collaborative segments, as these are areas in which SMEs would require the most help.

Incumbents
Growth
Early
Seed
Pre-Seed
Operational
?
Analytical
?
Collaborative
?
whitefluffy.cloud
whitefluffy.cloud
whitefluffy.cloud
Hubspot
Freshworks (Freshstack)
SuperOffice
Keap
Copper
Pipedrive
Insightly
Nimble CRM
Benchmark Email
ConvergeHub
Bitrix24
Thryv
vTiger
Swiftpage
Finally
FreeAgent CRM
Book'n'Bloom
Shore
YCLIENTS
Method:CRM
Avochato
Streak
Sprout
Highrise
Mimiran
Goldmine
Pipedrive
Insightly
Capsule
DongoCRM
Salesforce
Microsoft Dynamics CRM
Oracle - NetSuite
Zoho (Bigin)
Claritysoft (Pathfinder)
Freshworks (Freshstack)
SuperOffice
Converge Technology Solutions
Weave
Pipedrive
Sellsy
vCita
SuiteCRM
Apptivo Inc.
ConvergeHub
Bitrix24
Thryv
vTiger
Podium
Book'n'Bloom
Shore
Method:CRM
Less Annoying CRM
Sprout
Capsule
Plutio
WORKetc
Teamgate
Semilimes
BigContacts
whitefluffy.cloud
Exsalerate

The Disruptors


Among small and medium enterprise customer relationship management (SME CRM) vendors, Bitrix24 leads in terms of active users (~10 million users), mainly due to their strategy of offering a core CRM service for free. The other disruptor companies also differentiate themselves in terms of product strategy or target market. Some are either focused on local level interaction only (e.g. Podium), targeting non-employer SMEs engaged in professional services (e.g. Keap) or including additional features such as lead generation tools and modern designs (e.g. Pipedrive).

Operational

?

Disruptors

?
Funding in USD Millions
Thryv
Public - Market cap USD 986.0 mn
Keap
208
Copper
102
Finally
99
Pipedrive
90
Insightly
38
FreeAgent CRM
26
Book'n'Bloom
15
Shore
14
Nimble CRM
12
YCLIENTS
11
Method:CRM
9
Avochato
6
Benchmark Email
3
Streak
2
Sprout
Unknown
Highrise
Unknown
ConvergeHub
Unknown
Bitrix24
Unknown
vTiger
Unknown
Swiftpage
Unknown
Watchlist
?
Mimiran

Analytical

?

Disruptors

?
Funding in USD Millions
Pipedrive
90
Insightly
38
Capsule
Unknown
Watchlist
?
DongoCRM

Collaborative

?

Disruptors

?
Funding in USD Millions
Thryv
Public - Market cap USD 986.0 mn
Weave
Public - Market cap USD 379.7 mn
Podium
419
Pipedrive
90
Sellsy
73
vCita
15
Book'n'Bloom
15
Shore
14
Method:CRM
9
Less Annoying CRM
0
Sprout
Unknown
ConvergeHub
Unknown
Bitrix24
Unknown
vTiger
Unknown
Capsule
Unknown
SuiteCRM
Unknown
Apptivo Inc.
Unknown
Plutio
Unknown
WORKetc
Unknown
Watchlist
?
Teamgate
Semilimes
BigContacts
whitefluffy.cloud
Exsalerate

Thryv

Thryv offers a SME focused end-to-end Software-as-a-Service (SaaS) CRM . Formerly known as DexYP, the company changed its name to Thryv in July 2019. The platform provides functions to help users reach more customers, manage them, get paid quicker, and generate more customer reviews. 

Thryv enhances customer reach through tools that: centrally manage social media presence, create custom marketing videos, automate marketing processes, and also includes features to manage and sync business information across more than 40 listing sites, including Google My Business (GMB), which allows the management of  the business’ Google listing directly through Thryv. To facilitate customer management, Thryv features scheduling tools that can be used across teams, automated reminders, dedicated client portals to manage and engage clients through text and email, and provide online document storage.

Thryv has also partnered with PayPal, Apple Pay, Google Pay, Stripe, to facilitate payment receipts, and the company also provides mobile app-enabled ThryvPay, a payment processor designed specifically to target SMEs, allows customers to pay with credit cards or ACH payments, set up scheduled payments, apply for installment plans, and leave tips. Thryv also integrates with multiple third-party apps, such as QuickBooks Online and Shopify.

In March 2021, Thryv acquired Sensis, an Australian digital marketing and directory services provider, for approximately AUD 257 million (USD 200 million). The acquisition is reported to have brought onboard more than 100,000 Sensis customers to Thryv.

As of September 2021, the company served over 40,000 SMEs across the US.

Funding and financials

Thryv went public through a direct listing on NASDAQ on October 1st, 2020, opening at a market capitalization of USD 432.6 million. 

For the full-year 2021 (FY2021), Thryv reported a marginal revenue growth of 0.4% YoY to USD 1.1 billion.The operating profit was USD 190 million (up 25% YoY) in FY2021, and adjusted EBITDA was USD 350.5 million, which represents an adjusted EBITDA margin of 31.5%. The company reported a diluted EPS of USD 2.78 in FY2021, compared to a diluted EPS of USD 4.42 in FY2020. With the release of Q2 2022 earnings, the company upgraded its full-year 2022 SaaS segment revenue guidance to USD 209.5 million–211 million. Meanwhile, the SaaS EBITDA loss is estimated to narrow further to USD 16 million–19 million due to strategic investments earmarked for product development.

Segment:
Operational
Competitors:
Keap, Podium, Act!, vCita
Disruptor Funding History

Operational:

Keap
Copper
Finally
Pipedrive
Insightly
FreeAgent CRM
Book'n'Bloom
Shore
Nimble CRM
YCLIENTS
Method:CRM
Avochato
Benchmark Email
Streak

Analytical:

Pipedrive
Insightly

Collaborative:

Weave
Podium
Pipedrive
Sellsy
vCita
Book'n'Bloom
Shore
Method:CRM
Less Annoying CRM
Teamgate
Semilimes
BigContacts

Incumbents


The incumbents consist of leading enterprise customer relationship management (CRM) players Salesforce Essentials, Microsoft Dynamics, Oracle, and Zoho. The incumbent list also includes Hubspot, one of the leading and oldest SME CRM system providers, which had a user base of nearly 121,000 as of November 2021.

Although user data from the incumbent operators is not readily available, it appears that Microsoft Dynamics and SalesForce Essentials have a considerable user base within the small and medium enterprise (SME) CRM market. This is evident from these two products being ranked No. 1 in the 2018 and 2019 SME CRM awards, respectively.

One of the leading enterprise players, SAP, entered the SME space in 2018 by launching the SAP Sales Cloud platform, which was formed by combining three acquisitions made by SAP since 2013—Hybris in 2013, Gigya in 2017, and CallidusCloud in 2018. However, in September 2020, two years after launch, SAP announced it would be exiting the CRM space, conceding it’s 5.3% market share to existing leader Salesforce.

Acquisition

In-house product development

Partnership

Investment

Salesforce
check
Microsoft Dynamics CRM
check
Oracle - NetSuite
check
Hubspot
check
Zoho (Bigin)
check
Goldmine
check
Claritysoft (Pathfinder)
check
check
Freshworks (Freshstack)
check
SuperOffice
check
Converge Technology Solutions
check
Salesforce

Founded in 1999, Salesforce is the largest player in the global CRM market, accounting for around 19.8% as of 2021. In 2018, it launched Salesforce Essentials—a CRM platform for businesses with up to 10 employees. It’s more affordable for SMEs at USD 25 per month, while the enterprise package starts at USD 75. Salesforce Essentials combines contact management with configurable reports and dashboard features, activity tracking, and collaboration tools, all of which can be managed via a mobile app. In July 2019, Salesforce partnered with Deluxe, a tech-enabled solutions company with 4.8 million SME customers, to offer the Essentials product to Deluxe’s customers.

In May 2021, Salesforce partnered with UK-based Neobank Revolut to offer Salesforce Essentials as a product in Revolut’s “Business Rewards” platform. The platform provides solutions for SMEs in areas of customer management, finance, and communications. Under the partnership, Salesforce’s SME solution will be offered at a discounted rate to Revolut’s Business Rewards platform users.

Notable Investors


No investor data is available

Funding data are powered by Crunchbase
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