According to Business Wire, the global market for web hosting is expected to reach 2.4 billion dollars by 2027, growing at a compound annual growth rate of 5.5% between 2021 and 2027. The global web content management market is estimated to be 16.2 billion dollars by 2027 with a compound annual growth rate of 14.8%. Additionally, McKinsey estimates that millennials and Gen Z’s spending power neared 3 trillion dollars in 2020, half of which comes from online spending. Consumer behavior is evolving rapidly, forcing brands to differentiate themselves on digital spaces and develop impactful, cost-effective interactions with customers.
Squarespace is a leading unified platform for businesses and independent creators to build a beautiful online presence, grow their brands and manage their businesses across the internet. The company offers websites, domains, e-commerce, social media management tools, marketing tools and scheduling capabilities. Small and medium sized businesses face several key challenges when it comes to online branding including:
• Accessibility of solutions: Small businesses often do not have enough resources to maintain an attractive, functional website as it usually requires the engagement of professional developers. Traditional do it yourself solutions often lack necessary functions to create impressive content.
• The lack of integrated solutions: Small brands have to utilize multiple different software such as data analysis, marketing, customer experience, etc. simultaneously, which is extremely difficult for management.
Squarespace is superior to its competitors as it owns many inherent strengths to deal with such challenges.
First, Squarespace can support a wide range of customers with beautiful and simple designs. Squarespace’s design-first platform empowers millions of customers in approximately 180 countries thanks to modern architecture, a scalable delivery platform and secure solutions that can support customers just getting started, as well as large brands that need scale, flexibility and reliability.
Second, Squarespace has an all in one platform that offers all necessary functions to build and manage online presentations and commerce across devices and social media. Its content management solution offers the integration of website builders, commerce solutions, blogging infrastructure, hosting services, domain registration, marketing tools and analytics tools across digital channels into a single platform. This comprehensive approach enables customers to aggregate and analyze data easily. Thus, they can better understand their audience and drive higher traffic, sales and conversion through only a single interface.
Third, Squarespace welcomes all types of business models as customers can sell physical products, subscriptions, content and services within the same platform. Its beautiful templates enable deep levels of customization for each business purpose so that vendors can express their story and brand in a consistent and engaging way.
Besides those key benefits, Squarespace’s major growth driver is its leading position in an ever growing but undigitized small and medium business market. According to Kauffman Index, about 540,000 businesses are established monthly in the U.S. Additionally, in the first quarter of 2021, e-commerce sales grew 39% year over year and are expected to reach more than 4 trillion dollars by the end of the year. With a total of 800 million small and self-employed ventures globally, 46% of which do not yet have an online presence and a surge in e-commerce buyers, there is ample headroom for Squarespace to penetrate this 150 billion dollar market.
The majority of Squarespace’s revenue comes from subscription plans with various levels of functionality designed for individuals and businesses of all sizes. Total revenue in the quarter was 201 million dollars, up 24% year over year. Unique subscriptions reached 4 million in the third quarter, up 13.5% year over year, while average revenue per unique subscription grew to 198 dollars, up 5.7% year over year.
The company is developing a holistic growth strategy where it will expand new international customer bases, deepen commerce offerings, develop enterprise capabilities and expand experts’ community. We believe that Squarespace’s differentiated technology will continue to drive its market opportunity and unlock new monetization opportunities.
