Kajabi LLC Chief Executive Ahad Khan says the seismic changes of the past two years have lent momentum to his company’s online software platform for small- and medium-sized businesses and individual entrepreneurs, and it’s still the “top of the first inning” for further expansion.
Irvine-based Kajabi, founded in 2010, helps its customers build businesses with websites and other digital offerings such as online courses, coaching, membership communities, podcasts, newsletters and more in what it has dubbed the “knowledge economy.”
Tens of thousands of entrepreneurs and creators rely on the company’s platform to build and manage their online businesses. The company says it has helped these entrepreneurs generate over $3.5 billion in sales from over 60 million users who have paid for a service such as a webinar or podcast.
Khan says the company is now “north of $100 million” in annual recurring revenue, a 267% increase since 2020. Annual recurring revenue is a measure favored by companies providing subscription-based services and products.
“If you’re a customer of Kajabi, you pay us a subscription fee,” according to the CEO, who says his company doesn’t take a portion of the earner’s revenue, unlike some competitors.
A Kajabi subscription costs $119 per month billed annually for the basic service, while the pro service costs $319 per month on the same annual billing terms.
There are numerous competitors in the online and digital creator space, including Udemy Inc. (Nasdaq: UDMY) of San Francisco with a market cap of about $2 billion; Ruzuku of North Carolina; Podia Labs Inc. of New York; Thinkific of Canada; and Passion.io of Germany.
Kajabi says it provides a unified platform for its creators to publish, market, and sell knowledge products.
“We have about 56,000 customers on Kajabi right now,” Khan said. “We continue to grow really well.”
$550M Funds
Kajabi is one of OC’s better-funded private tech companies; it completed a $550 million growth round of funding in 2021.
The fund was led by Tiger Global, with participation from TPG, Tidemark, Owl Rock, and Meritech, with continued support from Spectrum Equity, the original investor in the company.
Kajabi is profitable and currently has “no financing rounds planned,” according to the CEO.
The company boasts 414 employees, about double the number last year.
Still, there’s plenty more room for growth, the executive says.
“We need to evangelize what we do as the market continues to move in our favor,” Khan told the Business Journal on May 10.
“We’re at the top of the first inning in terms of what this knowledge economy is going to look like in five to 10 years,” says Khan.
Knowledge Economy
The company has a clear purpose—to turn knowledge into income, especially for small- and medium-sized firms.
The company’s own research, summarized in its inaugural Creator Economy Report released last month, includes the following findings:
• Kajabi customers make an average of $30,000 per year on the platform.
• Personal development and health and fitness are the top two topics for knowledge creators.
• Kajabi customers in the academic world increased their earnings by 253% in January 2022 compared to January 2020.
The most popular and lucrative products for knowledge creators on Kajabi in 2021 were online courses and membership sites.
Creators who incorporate podcasts into their services earn 26% more than those that do not, according to the report.
Coaching, Teaching
Kajabi says it has already helped people, from first-time creators to seasoned entrepreneurs, on topics ranging from coaching new parents on sleep training their children to teaching people how to incorporate their small business, to training people how to forage for mushrooms.
Khan says “a lot of momentum swung in our favor” as people stayed home in front of their computers during the pandemic.
He took over the CEO role at Kajabi last year from company co-founder Kenny Rueter, who now serves as executive chairman.
Khan said he talks to Rueter “all the time.” “We don’t want to lose his voice around the table,” the CEO said.
Kajabi is “really proud to be an Orange County company,” he adds.
“We applaud other companies that move down here and well as well,” according to Khan.
“We hopefully are going to be a trailblazer for what happens in Orange County as we continue to do well.”
