Wix: A Website Building Powerhouse

In today’s digital age, having a website is essential for businesses of all sizes. Wix has become a key player in making website building accessible to everyone, regardless of technical skill.

Section 1: Background and History

Wix was founded in 2006 to make website building easy for everyone, even those without technical skills. Today, it has grown to serve over 273 million users, including 4.5 million premium subscribers. A key turning point for Wix was its shift from Flash to HTML5, which helped it stay relevant as the internet moved towards mobile use.

Wix is headquartered in Tel Aviv, Israel. Wix has ~5,500 full-time and part time employees across 17 countries including Israel, United States, Canada, EU, UK, India, Brazil and Singapore.

Section 2: Business Model

Wix uses a freemium model, providing basic website-building tools for free and charging for premium features. This approach helps attract many users, some of whom eventually upgrade to paid plans. Wix also offers a range of add-ons, like e-commerce and online booking tools, that users can easily add to their sites without any coding.

Section 3: Market Size/Opportunity

Wix targets a broad market, including small businesses, freelancers, and digital creators who need an online presence but lack technical skills. The shift towards digitization, especially after COVID-19, has increased the demand for online storefronts. This broad approach allows Wix to tap into multiple industries, further expanding its market potential, which is estimated to be worth over $30 billion globally.

Section 3.1: Competitors

Wix faces strong competition in the website building market. Key rivals include:

• WordPress: An open-source platform popular with developers for its high customization.

• Squarespace: Competes directly with Wix, offering an all-in-one solution focused on design and ease of use.

• Shopify: Specializes in e-commerce, providing a platform for online stores.

• Weebly: Similar to Wix, it targets non-technical users with its easy-to-use website builder.

• Webflow: Appeals to designers and developers who want more control over design and coding.

Section 4: Revenue and Strategy

Wix earns most of its revenue from subscription fees for premium services, priced between $17 and $159 per month, depending on the features users choose. They also make money from add-on services like e-commerce tools and online bookings. Wix invests heavily in marketing on platforms like Google and Facebook to attract users, aiming to convert free users into paying customers by making their platform easy to use and offering valuable add-ons that keep users engaged.

Section 4.1: Revenue Streams

• Premium Subscriptions: Most of Wix's income comes from paid plans, which offer advanced features for $17 to $159 per month. (70-75% of revenues)

• Add-On Services: Wix earns extra by offering tools like e-commerce, online booking, and email marketing, either as part of higher plans or separately. (15-20% of revenues)

• App Market: Wix takes a cut from apps sold in its marketplace, where users can add extra features to their websites. (5-7% of revenues)

• Domain and Hosting Sales: Wix makes money by selling custom domain names and providing web hosting services. (5-7% of revenues)

• Enterprise Solutions: Wix offers customized services for larger businesses, bringing in additional revenue from high-value clients. (1-3% of revenues)

• Advertising: Wix may earn some revenue from ads displayed on free websites, encouraging users to upgrade to paid plans. (<1% of revenues)

Section 4.2: Revenue Geography

Wix's revenue is distributed as follows: 60% from North America, 25% from Europe, 11% from Asia, and 4% from Latin America.

Section 4.3: Financials (LTV, CAC)

Lifetime Value (LTV) is calculated by multiplying the average revenue per user (ARPU) by the average customer lifespan. Wix's ARPU is influenced by the type of subscription (free, premium, or enterprise). Given that premium subscriptions range from $17 to $39 per month excluding enterprise, and assuming an average customer lifespan of 2-3 years, the estimated LTV could range from $408 to $1,290.

Customer Acquisition Cost (CAC) is calculated by dividing the cost of sales and marketing expenses by the number of new customers acquired. A ballpark figure could be around $100 to $300.

The average LTV/CAC is 4.2x

Section 5: Fundraising

Wix raised funds from top investors like Benchmark, Bessemer, and Insight Partners. These early investments were vital for product development and marketing, especially during tough times like the 2008 financial crisis.

Wix went public on November 6, 2013. The company raised approximately $127 million in its initial public offering (IPO) by selling 7.7 million shares at a price of $16 per share.  As of August, 2024, Wix has a market capitalization of ~$9 billion ($163 per share).

Section 6: Competitive Advantage

Wix’s competitive edge is its simple, user-friendly design, perfect for non-technical users. Its closed ecosystem offers a seamless, all-in-one solution for building and managing websites. Wix's strong focus on performance marketing and quick adaptation to tech changes, like moving from Flash to HTML5, have kept it ahead in a competitive market.

(Sources: Wix-Statistics, Builtwith, Wix-Website, Techcrunch, Wix-Investors, Wikipedia)