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Business Operations Business Models

How Does Mailchimp Make Money (Business and Revenue Model)

The Mailchimp business model

Mailchimp logo
Here’s what you should know:
  • What is Mailchimp, and how does Mailchimp work?
  • How does Mailchimp make money?
  • Email Marketing Service (Subscription Revenue)
  • Website and Commerce (Subscription + Transaction Fees)
  • Mailchimp subsidiaries, acquisitions, and exits
  • Mailchimp profit and revenue
  • What is the Mailchimp business and revenue model?
  • Mailchimp funding, net worth, and valuation

How does Mailchimp make money and how is it free to use? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Mailchimp business and revenue model, how much Mailchimp makes per year, and how Mailchimp works.

What is Mailchimp, and how does Mailchimp work?

Mailchimp is a email marketing service that enables users to manage mailing lists and create email marketing campaigns using automation.

Founded in 2001 by Ben Chestnut, Dan Kurzius, and Mark Armstrong, Mailchimp went on to later get acquired by Intuit for a reported $12 billion on September 13, 2021.

Since that time, Mailchimp now has more than 14 million customers that send more than 333 billion emails per year using the Mailchimp platform.

So, how does Mailchimp work? To use Mailchimp, users can start by first creating a free account.

Once signed up, users can begin setting up and sending emails to up to 1,500 email contacts per month. Anything more than that, customers will need to upgrade their account to a paid plan.

Some of Mailchimp’s competitors include Gmail, Salesforce, HubSpot, and other email marketing services.

Mailchimp App in Apple App Store | Mailchimp Business Model | How Does Mailchimp Make Money? | How Does Mailchimp Work?
Source: Apple App Store | Mailchimp

How does Mailchimp make money?

According to Mailchimp, Mailchimp has more than 14 million customers who have sent more than 333 billion emails using Mailchimp in 2020 alone.

So how does Mailchimp make money off of all those customers and sent emails?

Below is a breakdown of how much money Mailchimp makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Mailchimp makes money in 2022

Mailchimp has a revenue model that makes money in two (2) ways; subscription revenue and transaction fees.

#1. Email Marketing Service (Subscription Revenue)

Mailchimp makes most of its money through the subscription service it offers its customers.

Although Mailchimp is free to use for customers with less than 1,500 contacts, they also offer three (3) paid subscription tiers for customers who need more; Essentials, Standard, and Premium. All of which offer their own set of perks that the free version does not offer like being able to send more than 10,000 emails per month, A/B testing, phone support, and more.

Mailchimp pricing:

  • $0 to $1,300+ per month (depending on the plan and how many contacts you have)

#2. Website and Commerce (Subscription + Transaction Fees)

Another subscription service Mailchimp offers and makes money from is their website and commerce offering.

Just like their email marketing service, Mailchimp offers a freemium tier, as well as two (2) paid subscription tiers; Core and Plus.

According to Mailchimp, their customers who set up their e-commerce websites through Mailchimp have had more than $61 billion in sales in 2020. Of which, Mailchimp takes a 0.5% to 2% transaction fee on all of it, depending on the plan.

How much does Mailchimp cost?

  • $0 to $29 per month and;
  • 0.5% to 2% transaction fee of each sale

Mailchimp subsidiaries, acquisitions, and exits

Aside from Mailchimp being acquired by Intuit for $12 billion, Mailchimp has had its own fair share of acquisitions as well.

To date, Mailchimp has made a total of 7 acquisitions.

Mergers and acquisitions business model
Source: Crunchbase | Mailchimp

Mailchimp profit and revenue

Mailchimp’s last reported earnings came in 2020 when they brought in $800 million in revenue. Since then, Mailchimp has not released any official reports in regards to company earnings.

Note: Because Intuit Inc., the parent company of Mailchimp, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Intuit’s publicly released financial reports, including annual reports, through  Intuit’s investor section on their website.

What is the Mailchimp business and revenue model?

Mailchimp makes money through a few revenue models that they combine within their company, they are:

  • Freemium business model
  • Software as a service (SaaS) business model
  • Commission based business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Mailchimp funding, net worth, and valuation

On September 13, 2021, Mailchimp was acquired by Intuit for a reported $12 billion.