ProfitWell gave its subscription metrics product away free, then charged for retention and pricing tools such as ProfitWell Retain, which reportedly cost nothing upfront and charged only when revenue was recovered. The free product reached about 30,000 companies. Paddle announced on 25 May 2022 that it was acquiring ProfitWell for more than $200 million in cash and equity, buying that distribution.
Key takeaways
- Paddle's acquisition of ProfitWell, announced 25 May 2022, was valued at more than $200 million in cash and equity.
- ProfitWell's free metrics product had reached about 30,000 companies, a ready-made customer base for Paddle's payments.
- Retain's basic tariff was zero: customers paid only when revenue was recovered. Outcome-based pricing, years early.
- Give away the dashboard, charge for the fix.
- Ask which bigger company your free product makes more valuable. That's your likely buyer.
Nine months.
That's how long Patrick Campbell gave himself to see whether this "being an entrepreneur" thing could work.
His company was called Price Intelligently. It helped businesses work out what to charge. He worked eighteen-hour days building the software, writing content and shooting videos. A tech journalist at The Boston Globe found one of his posts and ran with the story.
That nine-month experiment ended with a payments company paying more than $200 million for it.
But here's the part I didn't fully appreciate when I wrote the book. What Paddle really bought wasn't the paid product. It was the free one.
What the book said in 2022
ProfitWell was one of my bootstrapper stories in Chapter Ten.
Price Intelligently found product/market fit. Then Patrick had another idea: what if he gave businesses their churn and MRR metrics too? That became ProfitWell, a freemium product. Basic metrics were free. Deeper, customized analysis cost money.
I noted that ProfitWell reported an average customer lifetime value of $150,000 per customer, and that Patrick had just sold to Paddle for $200 million.
The lesson I drew was about doing the marketing yourself. Patrick didn't hire an expensive agency. He wrote, filmed and told his own story, and it worked.
What's happened since
The deal was announced on 25 May 2022, valued at more than $200 million in cash and equity.
| The deal | Detail |
|---|---|
| Announced | 25 May 2022 |
| Value | More than $200 million, cash and equity |
| Paddle's position | First acquisition after a $200 million Series D valuing Paddle at $1.4 billion |
| Companies on ProfitWell's free product | About 30,000 |
| What Paddle did next | Made ProfitWell's metrics free to its billing customers |
| Products today | ProfitWell Metrics, Retain and Price Intelligently, under the Paddle brand |
Paddle pitched the combination as "taxes, payments, billing, reporting, retention and pricing all done for you."
Then there's a detail TechCrunch picked up that I love. The basic tariff for ProfitWell Retain was zero. Customers paid only when Retain recovered revenue for them. That's outcome-based pricing, years before AI companies made it fashionable.
Why did a payments company pay $200 million for a free product?
Because about 30,000 subscription businesses were already plugged into it.
Think about it from Paddle's side. Paddle sells payments and billing to software companies. ProfitWell's free metrics product sat inside the daily workflow of tens of thousands of exactly those companies. Every one of them looked at ProfitWell's dashboard to understand their revenue.
That's not a product. That's a distribution channel.
In the book I described freemium as a way to convert free users into paying ones. ProfitWell shows a second path. The free users don't all have to convert to your paid plan. They can become the reason a bigger platform buys you.
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Why it worked: the frameworks
Land and expand, at scale. The free metrics were the landing offer: an attractive initial offer with no risk. Retain and Price Intelligently were the expansion. Read more about land and expand.
Freemium with a real conversion path. Free reports show you the problem (churn, failed payments, weak pricing). The paid tools fix it. The free product creates demand for the paid one.
Outcome-based pricing on the fix. Charging only when revenue was recovered removed the buyer's risk entirely. Retain was built to win back revenue a business was about to lose, including involuntary churn: failed payments from customers who never meant to cancel.
Shoestring marketing. Patrick's content built the audience that made the free product spread. That's Chapter Eight in action, and it's still the cheapest way to start. See starting a subscription business with no money.
When is "free first" the wrong move?
Free is expensive if your product costs you real money to deliver. ProfitWell's metrics were software, so each extra free user cost very little. If you're a service business, a free version of your whole service will drown you.
Free also needs scale. In the book I shared Jason Lemkin's math: at a 2% conversion rate, freemium needs an enormous user base to pay off. ProfitWell's exit worked because it reached tens of thousands of companies, not hundreds.
What you can steal
- Give away the dashboard, charge for the fix. A free health check, report or audit that shows customers their problem. A paid service that solves it. An accountant might offer a free cash-flow snapshot; a marketer, a free website audit.
- Price the fix on outcomes where you can. "We only get paid if we recover the money" is the easiest sale there is.
- Ask who your free product makes more valuable. Which bigger company would love to own your audience? That's your likely acquirer. Our guide on how to sell a SaaS business covers what buyers look for.
- Know your customer lifetime value. ProfitWell's $150,000 figure is why it could afford to give so much away. Work out yours with the LTV calculator.
What could you give away that would put you in front of your ideal customers every single week?
Stripe Export AnalyserUpload a Stripe subscriptions CSV and get MRR, churn and cohorts in your browser.Open the free tool →Frequently asked questions
How much did Paddle pay for ProfitWell?
Paddle's announcement on 25 May 2022 valued the deal at more than $200 million in cash and equity. It was Paddle's first acquisition after a $200 million Series D funding round that valued Paddle at $1.4 billion. The book, written as the deal closed, rounded it to $200 million.
Is ProfitWell still available?
Yes, under the Paddle brand. ProfitWell Metrics, Retain and Price Intelligently continue as part of Paddle, and Paddle made ProfitWell's metrics available free to its billing customers. Paddle positioned the combination as taxes, payments, billing, reporting, retention and pricing all done for you.
What was ProfitWell Retain's pricing?
TechCrunch reported at the time of the acquisition that the basic tariff for Retain was zero, with customers paying only when revenue was recovered. Retain was built to win back revenue a business was about to lose, so its fee was tied to money it actually saved. That's an early example of outcome-based pricing.
Is giving your product away free a good strategy for a small business?
Only if the free part is cheap for you to deliver and leads naturally to something people pay for. A free health check, audit or calculator can work well. A free version of your whole service usually doesn't. Decide upfront what's free, what's paid and how people move from one to the other.
What is a distribution asset?
It's an audience or customer base that a buyer can sell other products to. ProfitWell's roughly 30,000 companies using its free product were exactly the kind of subscription businesses Paddle wanted as payments customers. For a small business, an email list of engaged local customers can be a distribution asset too.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- PR Newswire, Paddle acquires ProfitWell (25 May 2022)
- Paddle blog, Paddle acquires ProfitWell
- TechCrunch, Paddle acquires ProfitWell for $200M (25 May 2022)
- SaaS Club podcast, episode 327 (about 30,000 companies on the free product)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.