AppDirect’s Revenue Growth Ran Through Bell and Comcast, Not a Big Sales Team

Nathan had a number. Daniel Saks had a policy.

“What do you have today in terms of revenue?” Nathan asked. “Can’t disclose,” said Saks, then president and co-CEO of AppDirect. Nathan came back with figures of his own: “There’s a pretty reliable source that said in ’13, you passed 9,000,000. And then in ’14, you’d more than doubled up to 18. Have you guys passed the $100,000,000 mark yet?”

Like I said, I can’t say, but definitely, you know, growing tremendously since then.

Daniel Saks, then president and co-CEO, AppDirect

So the $9M and $18M belong to Nathan’s unnamed source, not to AppDirect, and Saks confirmed neither of them, nor the $100M. The one revenue figure he did give was the first year’s. Asked what 2011 revenue was, he said: “it was in the hundreds of thousands.”

Public reporting adds little. On 7 October 2015, the day AppDirect announced its Series E, TechCrunch reported that the company “isn’t currently profitable” and, citing Saks, that it was “doubling its revenue growth annually” and that “half of AppDirect’s revenue is international.” Neither came with a dollar figure.

An earlier version of this article put $60M and 49 salespeople in its headline. Neither figure is on the tape. Both came from GetLatka’s own dataset, not from the interview, and the revenue row had no recorded source. Saks gave no current revenue figure and no count of salespeople.

The figures he did give on the tape:

The first customer was a phone company

Saks grew up in his family’s furniture store on Main Street in Niagara Falls, Canada, a business his great-grandparents started. When the recession hit, the family had to shut it down. What stuck with him was the buying. Software was “a major decision,” and the family knew the person who sold it to them: “I still remember the person’s name who sold my family their ERP solution.” That is the gap he built a company around: “this global network that connects the developers of applications with the end businesses,” with a trusted seller in between.

So the first customer was not a small business at all. It was Bell Canada, landed when AppDirect was “two people in an apartment.” (A January 2015 company release says Saks and co-founder Nicolas Desmarais started AppDirect in 2009 “out of a San Francisco apartment.”) Bell, Saks said, “had over half a million business customers at the time in Canada”, which is Bell’s figure, not AppDirect’s. “So we went and we aggregated relevant services for the Canadian market, and that was our first footprint.” AppDirect’s seed announcement of 28 April 2011 names the result: “Their first white-labeled marketplace, the Bell Business Apps Store.” One partner led to the next: “because of Bell, we got Deutsche Telekom. And because of that, we got Google.”

Comcast Business runs on the same logic. “One of the opportunities that’s emerged over the last several years with the growth in cloud,” Saks said, “is that businesses want to be able to access cloud services from people they trust.” A company that already sells a business its telecom and internet is, in his words, “a great trusted provider to also offer things like collaboration services, email, backup, and others.”

The price of that leverage was time and a bruised assumption. The first launch ran “a nine month sales cycle,” and the budget was nothing like what the founders had penciled in. “We went in with this idea that, okay, we’re going to propose this, we’re going get budget and it’s going to be millions of dollars,” Saks said. The project as a whole had a lot of money, but “they didn’t have a lot of budget for us ourselves. So we had to think creatively about how we help them to support the business case and get to market.”

What the first launch did unlock was outside money. “We bootstrapped as long as we could,” Saks said, and then: “once we had the letter of intent from the company, then the investor said, okay, we’ll give you the first seed money to make this happen.” He gave no amount on the tape. AppDirect announced a $3.25M seed round led by iNovia Capital on 28 April 2011.

Partner reach is where the numbers get big, and Saks was careful with them. “We reach now over 35,000,000 customers around the world,” he said, and when Nathan asked what that meant: “That’s our reach. So that would be the customers of our customers that we have reached to, but we do have millions of paid business users.” The 35 million are the partners’ customers, not AppDirect’s. Nathan then set a floor of “definitely more than a million”; that is his arithmetic, which Saks met with “Sure, yeah.” The company’s October 2015 Series E release had put its own count at “over one million paid business subscribers.”

How AppDirect earns its revenue

Two revenue lines, and Saks described them at different stages.

Asked what a customer pays per month, Saks gave a range rather than an average: “our license fees range dramatically, but we have entry level perspectives that would start around a few K per month depending on the complexity and going all the way up to the hundreds of thousands for more complex deployments.” Nathan checked the period (“you’re talking ACV there or monthly ARPU?”) and Saks answered in one word: “Monthly.” (If the distinction is fuzzy, our annual contract value explainer covers it.)

Saks placed AppDirect against the suite vendors rather than the point tools: “you can think of it as what HubSpot is for marketing and sales or for what NetSuite is for back office. We are for commerce.” Nathan described four sectors, each with a giant competing in it. Saks gave no count of his own, and argued that while “within each area there may be pure play competitor,” AppDirect is “operating as the only suite.”

The verticals ladder outward from that first telco beachhead. “We started the highest of upstream and then we created beachheads in different verticals”:

• Telco — where it started, and still the marquee logos: Bell Canada first, then Deutsche Telekom, and today “a lot of major telcos, Comcast, and others around the world.”
• VARs and MSPs — the next step out: “we’ve rolled out from telco to VAR and MSP.”
• Manufacturing — the one Saks called “a fascinating vertical for us.” For firms going digital through IoT, “the value is not necessarily in the hardware itself, it’s around the connectivity and the software and the ecosystem you can provide.”

A small elephant-hunting team

Asked what AppDirect pays to acquire a customer, Saks answered with the shape of the team instead of dollars: “we have a really kind of small elephant hunting type team. So for the revenue scale that we have, we’ve traditionally had a relatively smaller enterprise sales team, which really gives us an effective cost of acquisition. Because to get some of these large deals, we have one rep.”

One repon some of the large deals, in Saks’s words: “to get some of these large deals, we have one rep”

He gave no headcount for the sales team. The company as a whole was “about six fifty people,” he said. AppDirect “started in San Francisco and scaled to about 200 here,” then grew elsewhere “through both acquisition and organic,” with “a big footprint in Canada, both in Montreal, Calgary and Ottawa.” He pointed to a second benefit of keeping sellers: “the more they stay, typically the more skill sets they gain and they can really make a lot of money in terms of working with the right deals.”

He would not name a payback period. Asked for one, he said AppDirect has “internal targets in terms of where we want to be” that depend on the cohort. When Nathan offered options (north of eighteen months, closer to twelve, or six), Saks said only “We’re definitely in that range depending on the cohort,” adding that because of customer lifetime values it “can definitely be in a larger range than six.” The reasoning was more useful than a number would have been: “if we pay more upfront from a compensation perspective or cost of sales perspective, over time, we make that back pretty significantly.” His advice to anyone setting comp was to anchor on “the behaviors or drivers that will happen no matter what.” If customers sign up and stay a long time, “you can afford to be more flexible on the upside, provided the market opportunity is really big.” Where that sits against the rest of the market is in our SaaS CAC benchmarks.

Retention above 100%, and no number after it

The churn answer was the most confident moment on the tape and still contained no figure. Nathan asked whether AppDirect’s net dollar retention was “more than 100%.” Saks said “Yeah, exactly,” and gave the reason: “our customers stick with us and buy more, which is super exciting.” Pressed on 110% or 140%, he picked neither: “It ranges by customer, but what we definitely see is that once our customers get going, there’s a trajectory that’s north of double digits in terms of predictable growth. It definitely depends on the size and the scale of the company.”

The lever he described for driving it was not a price change. AppDirect “kept the same pricing framework, but really always anchored it based on value,” and went after the cost of deployment instead. Some of the first customer launches “would have taken thousands of custom engineering hours,” and “we’ve gotten that down to point and click,” which, he said, “reduces time to market, drives more predictability.” The metric he watches is what the partner sells, not seats: “the aggregate sell through across any one client.”

On growth rate he offered a shape instead of a percentage: “we used to call this thing called the Formula One track, which is if you can go triple, triple, double, double, double. So for a while, that was the trajectory that we’re on. And now we’re falling nicely into what you’d see in public comps in terms of growth rates for benchmarks.” He tied no years to it. Nathan tried “just south of doubling”; Saks: “I can’t say.”

On lifetime value, Nathan asked how he keeps himself honest about a metric that can be argued to infinity when churn is low. Saks did not pretend the model settles it. The past informs the estimate (“you can lean from the data in the past”), but “ultimately there has to be a call and comfort level made.” What moves the call is cash. With “more of a cash cushion,” a company that wants “to capture a lot of market” can “take a bolder stance” on customer lifetime value. Without one, it “can be much more conservative.”

The funding ladder

Where the $245M came from

The episode was titled around whether a company that has raised this much can go public, and Saks gave the careful version of the answer. AppDirect has “always had a long term approach to the business and had clean terms for investors”; there is “a bigger opening than ever for enterprise companies of our profile to go public”; and the choice stays open, “whether that means private or public down the road.” Asked whether AppDirect was filing to go public in the next twelve months: “I obviously can’t answer that, but I think we’re really excited about the position we’re in.”

The $245M he gave matches the company’s own announcements. Each round below is dated from AppDirect’s press release, except the Series D, which is from TechCrunch:

• 28 Apr 2011 · Seed $3.25M, led by iNovia Capital.
• 18 Jul 2012 · Series A $8.5M, led by iNovia Capital.
• 10 Sep 2013 · Series B $9M from existing investors, led by iNovia Capital, announced with the Standing Cloud acquisition.
• 10 Apr 2014 · Series C $35M, led by Mithril Capital Management.
• 2015 · Series D $50M, which TechCrunch described in October 2015 as raised “earlier this year.”
• 7 Oct 2015 · Series E $140M, led by a fund advised by J.P. Morgan Asset Management. The release: “Since its founding in 2009, AppDirect has raised a total of $245 million.”

The six rounds add up to $245.75M, the total TechCrunch reported that day.

The next raise came after the interview. On 16 September 2020 AppDirect announced US$185 million from CDPQ and existing investors, which “brought the total equity raised by AppDirect to approximately $465 million.” That is about $34M more than the announced rounds add up to ($245.75M plus $185M is $430.75M), and the release does not say where the difference came from. It named no valuation either. BetaKit wrote in January 2024 that the round “reportedly came at a post-money valuation of more than $2 billion.” On 21 December 2021 AppDirect and CDPQ announced USD 80 million (CAD 100 million) “to launch AppDirect Capital,” a set of funding programs for channel partners. CDPQ called it “alternative financing,” set apart from “its initial equity investment in 2020,” and BetaKit describes AppDirect Capital as “non-dilutive funding to technology advisors” on the platform. It was not an equity round.

What AppDirect has said since

None of the AppDirect releases cited here reports the company’s revenue; the closest is a forecast of gross ARR. What the company has published since the interview, by date:

• 16 Sep 2020 — Gross Merchandise Value up “more than 1500 percent since 2015 to over US$1 billion,” with “more than 2000 merchants.” GMV is the value of what sells through the platform, not AppDirect’s revenue.
• 21 Aug 2025 — “AppDirect anticipates crossing the $1 billion threshold in gross annual recurring revenue over the next 18-24 months.” That is a forecast, and of gross ARR, not revenue. The same release’s boilerplate: “More than 1,000 providers, 14,000 advisors and 16 million subscribers rely on the AppDirect ecosystem.”

The leadership has changed too. By January 2024, BetaKit was describing Nicolas Desmarais as AppDirect’s “chair, co-founder, and CEO” and Saks as a “fellow AppDirect co-founder.” Current figures live on the AppDirect profile.

The last question of the episode was what Saks wished his 20-year-old self knew.

Just have conviction in your vision and keep going.

Daniel Saks, then president and co-CEO, AppDirect