The Story of Veeva Systems: An Amazing Software Business You've Never Heard Of

An early Salesforce employee built a $45B vertical SaaS company for the life sciences industry.

He only raised $7M before going public at a massive valuation of $4.4B. All in just 6 years.

The story of Veeva, an amazing software business you've never heard of 🧵 pic.twitter.com/CpKJ4V63gW

— Luke Sophinos (@lukesophinos) April 12, 2023

Peter Gassner is the CEO and Founder of Veeva Systems, a cloud software provider for pharmaceutical and biotech companies.

Their customers include Pfizer and Abbvie.

In 2013, Veeva IPO'd just 6 years after it launched at a $4.4B valuation.

— Luke Sophinos (@lukesophinos) April 12, 2023

It is one of the most capital-efficient businesses in software history.

VCs thought Veeva's market was too small, and that they were crazy to only be focusing on one industry.

Peter only raised $7M for Veeva — talk about creating value and valuation simultaneously. pic.twitter.com/oVheOBJPdw

— Luke Sophinos (@lukesophinos) April 12, 2023

In 2007, Peter met Matt Wallach at a tech conference.

They hit it off immediately and bonded over their love for cutting-edge software solutions.

They saw a gap in the life sciences industry and knew they could fill it with cloud-based software.

And, Veeva Systems was born.

— Luke Sophinos (@lukesophinos) April 12, 2023

Combining their skills (Peter, an exec for 20+ years and Matt, a sales exec for healthcare tech companies), they founded Veeva Systems in January 2007.

With their flagship product, Veeva CRM, Peter and Matt have taken over the life sciences industry. pic.twitter.com/cjTvnR5Csb

— Luke Sophinos (@lukesophinos) April 12, 2023

Their cloud-based CRM system was a game-changer, making sales and marketing more efficient for pharmaceutical and biotech companies.

Salesforce had a horizontal focus and didn't meet the unique needs of the life sciences world.

Veeva changed that & the software was a hit.

— Luke Sophinos (@lukesophinos) April 12, 2023

AstraZeneca, the $180B pharmaceutical behemoth, saw a:

• 29% ROI
• 30% annual cost savings

directly from its use of Veeva CRM.

— Luke Sophinos (@lukesophinos) April 12, 2023

In 2010, Veeva added Vault, a content management system for regulated industries, to their offerings.

Vault ensures secure content sharing with third parties while staying compliant with regulations.

— Luke Sophinos (@lukesophinos) April 12, 2023

Veeva's platform is divided into two main parts:

• Commercial Cloud for customer-facing teams
• Development Cloud for R&D teams

Veeva's Commercial Cloud focuses on their CRM system, while the Development Cloud revolves around their content management system, Vault. pic.twitter.com/lMbNVT58tI

— Luke Sophinos (@lukesophinos) April 12, 2023

Veeva categorizes its products based on their maturity and popularity.

CRM and Commercial Content are well-established and popular.

Other products in Veeva's ecosystem are early but have potential for rapid growth. pic.twitter.com/iKpxBMzCAs

— Luke Sophinos (@lukesophinos) April 12, 2023

It only took Veeva 7 years to generate $100M+ in ARR with fewer than 200 customers.

They are doing some serious WHALE HUNTING.

In January 2022, they generated $1.48 billion in ARR, a 26% YoY growth, with a gross margin of 84.8% and a total business EBIT margin of 27.3%.

— Luke Sophinos (@lukesophinos) April 12, 2023

Veeva started as a CRM built on top of Salesforce. with a low SaaS gross margin of 72.3%.

But they improved, now hitting 84.8% gross margins.

Today, only 30% of their subscription revenues come from products built on top of Salesforce. pic.twitter.com/RguxrcsUXg

— Luke Sophinos (@lukesophinos) April 12, 2023

Veeva has been growing by 25%+ each year for the past 5 years, even though they were already making over $500 million every 12 months.

And during the pandemic (2020–2021), their growth sped up. pic.twitter.com/A0exkxHxY2

— Luke Sophinos (@lukesophinos) April 12, 2023

3 reasons why Veeva Systems became such a massive success 👇

1. Product Strategy

Instead of adding similar features to their initial product (CRM for sales), they launched a second product called Vault for R&D.

— Luke Sophinos (@lukesophinos) April 12, 2023

This was a riskier move, but it paid off.

Veeva doubled its addressable market from $6 billion to $13 billion.

Now, Veeva has two product platforms centered around their initial products, CRM and Vault. pic.twitter.com/NHwClNce2d

— Luke Sophinos (@lukesophinos) April 12, 2023

2. Lucrative Industry

Veeva sells to a profitable industry, pharmaceuticals, with a high willingness to pay.

The pharmaceutical industry is way more profitable than most, with a 26% EBITDA margin compared to the 14% average across all industries. pic.twitter.com/O8NPDGQaC8

— Luke Sophinos (@lukesophinos) April 12, 2023

3. Company Values

Veeva has four main values:

• integrity
• customer success
• employee success
• speed

Veeva's main focus is on doing right by customers, promoting employees, and creating a great work environment. pic.twitter.com/ZrBDLL5Rzi

— Luke Sophinos (@lukesophinos) April 12, 2023

In 2021, Veeva became the first public company to convert to a public benefit corporation (PBC).

That means they have a legal duty to take care of their employees, customers, and community — not just shareholders.

— Luke Sophinos (@lukesophinos) April 12, 2023

"Speed - that's the thing you're most likely to lose. As you get big, you get slow, and you get bureaucratic.

We specifically call out that we're okay with inefficiency because if you want speed and autonomy and you're big, you have to be okay with inefficiency."
~ Peter Gassner

— Luke Sophinos (@lukesophinos) April 12, 2023

Veeva is a case study in leveraging both SPEED and EFFICIENCY while scaling.

Something incredibly rare in Silicon Valley.

We all have much to learn from Veeva -- one of the GOATS of vertical SaaS.

— Luke Sophinos (@lukesophinos) April 12, 2023

Thanks for reading.

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— Luke Sophinos (@lukesophinos) April 12, 2023