By Justin Kaufenberg, Partner at Rally Ventures and the founder or co-founder of 10+ businesses, including SportsEngine and Vertical Insure; and Rick Ehrman, Former Head of Corporate Development at SportsEngine and Current Head of Partnerships at Vertical Insure
Partner ecosystems can be a powerful growth engine for SaaS+ companies. When built thoughtfully, they expand your market, strengthen your product and create new revenue streams. But when managed poorly, they can stretch teams too thin and distract from core priorities.
In this article, we share lessons learned about building great partnerships, drawing on our experiences at SportsEngine and Vertical Insure. Together, we’ve seen how a strong partner ecosystem can change the trajectory of a business and generate billions in value through SaaS+ distribution channels.
SaaS+ is the strategy of layering payments, lending, insurance, background screening and other financial tools onto a SaaS platform. This model can significantly multiply revenue potential while deepening customer relationships. Over the past few years, Rally Ventures has published a series of articles exploring the benefits of building a SaaS+ company, complete with practical how-to guides and real-world examples.
Why Partner Ecosystems Matter in SaaS+
When you build a great partner ecosystem, your company becomes much more than its core product. It becomes the go-to platform in your space, offering a full suite of products and services your customers need. There are two main ways to participate in a partner ecosystem:
- Distribute other companies’ products. You bring in complementary products or services and make them available to your customers, creating new revenue streams while adding value for end users. At SportsEngine, we partnered with other companies to give families and youth sports teams easy access to useful products and services.
- Embed your product in someone else’s platform. Your solution becomes part of another company’s workflow, so end users find it where they already are. Vertical Insure integrates insurance into checkout paths and registration forms, letting people add coverage at checkout while sharing revenue with the partner.
Both approaches let you reach more customers without proportionally higher sales and marketing costs. The best partner ecosystems don’t just add features. They solve real problems for end users and create value for everyone involved. Done well, they move you beyond just selling software licenses to a more defensible, networked business.
For SaaS+ companies, this means creating a system of solutions that works for both partners and end users. Partners benefit by reaching new customers, generating more revenue and enhancing their own offerings. End users benefit by getting a seamless experience with the products and services they need, all in one place.
At SportsEngine, we saw this play out firsthand. We built a large, engaged audience of sports parents, leagues and clubs, and many companies wanted to reach them. We established clear criteria to ensure partnerships added value for both our B2B partners and for our end users—the B2B2C layer.
Expanding Your Market
A good partner ecosystem can change how you define your market opportunity. While at VNN, Rick first measured their market based on what high school athletic departments spent on software to manage scores, standings, schedules and stats. That number was small and pretty fixed. Once they reframed it around what families spent on sports overall, the opportunity grew dramatically.
VNN worked with every high school in the country, and they had contact with every athletic director. There are lots of products and services that are trying to reach that stakeholder. That shift led them to partners in recruiting, fundraising, streaming, insurance and e-commerce. Each one made the core platform more useful and increased the lifetime value of every customer.
At SportsEngine, the focus was less about TAM and more about pure revenue diversification. SportsEngine had a gigantic TAM. We were never going to be able to penetrate that entire market, but there were countless ways to drive more revenue through the same distribution channel by adding options for recruiting, insurance, spirit wear, safety and more.
Choosing and Working with the Right Partners
In Rick’s first year at SportsEngine, the focus was largely on M&A. We spent a lot of time talking with customers and asking them directly who they wanted us to acquire. That experience led us to create the SportsEngine Marketplace: a way to test potential partnerships and acquisitions before making big build-or-buy decisions.
Testing before building. Streaming was an early example. At the time, it was the Wild West. Every day, a new company wanted to handle streaming for us. By listing those options in a marketplace, we let customers choose “grocery store style” while we gathered data on which partners performed best. That insight helped us decide where to deepen partnerships, where to build internally and where to stay out entirely. Ultimately, SportsEngine acquired one of its top-performing streaming partners using real customer data to guide the decision.
Evaluating build vs. partner. We took a similar approach with recruiting. With millions of youth athletes on our platform, it seemed obvious we should help them reach the next level: college athletics. We evaluated building our own solution but ultimately partnered with NCSA (then Reigning Champs), led by Luke Zaientz, now one of Rally’s operating partners. Luke had built one of the best partner models we’d ever seen, offering strong economics and scalability without the need to build internally. Parents often struggled to navigate recruiting, so offering that service through our platform delivered tremendous value to families while driving meaningful revenue for SportsEngine.
Big vs. small partners. We learned early on that bigger isn’t always better. It’s tempting to chase large, recognizable partners, but those deals often move slowly and offer little flexibility. Smaller, focused startups usually make better partners because they’re faster, more motivated and easier to work with on favorable terms.
At SportsEngine, we faced this choice often: partner with a startup like SquadLocker or a giant like Amazon for uniforms and gear. We learned that going smaller almost always worked best. With large players, you lose control of the terms, get locked out of other relationships and struggle to get the attention or speed you need. On paper, those deals look safe, but in reality, they’re often the riskiest.
Setting expectations. We set clear expectations for our partners: their product needed to be high quality, serve a meaningful market and have the financial stability to scale. We also asked for a minimum annual revenue commitment of $250,000–$300,000 so both teams stayed committed and focused on results. This model worked well, helping partners like NCSA and SquadLocker emerge as strong long-term collaborators.
The tradeoff was that we had to say no to many smaller startups, including nutrition and mental health apps, performance tools and sports sensors. Most could not meet the minimum revenue guarantee, and instead of creating a second-tier marketplace for smaller partners, we chose to focus on a smaller group of high-performing collaborators. Keeping our partner ecosystem focused allowed us to scale more effectively and maintain quality.
Registration Insurance was another standout success. We launched RegSaver, a proprietary embedded insurance product that refunded registration fees if a child was injured or unable to play. While some parents were hesitant at first, once they understood it, satisfaction was extremely high and the program became a multimillion-dollar business for SportsEngine. The concept worked so well that, after the company was acquired, we launched Vertical Insure to bring embedded insurance to other platforms.
That experience reinforced a core principle of the partner ecosystem: successful partnerships solve real customer problems. The best offerings—like jerseys, insurance or streaming—weren’t just “nice to have”; they met essential needs that customers expected us to solve.
Enabling, Measuring and Scaling Success
The most successful partnerships don’t end when the deal is signed. They’re built through ongoing engagement. A strong partner ecosystem depends on enablement: giving both partners and internal teams the training, tools and structure they need to succeed together. We invested heavily in educating our sales and marketing teams, integrating partner products into their daily workflows and keeping the relationship active. The partners who did the same—like SquadLocker—saw the greatest success.
SquadLocker stood out because they were relentlessly scrappy. Their CEO regularly flew to Minneapolis, dropping off branded gear and leaving quarter-zips on every salesperson’s desk as a reminder to mention SquadLocker in conversations. They sponsored pond hockey tournaments, stayed visible and made it easy for our team to champion their product.
In our model, most every add-on was optional. It was up to the customer to turn on these extra products, so partners had to win over not just the end user but our sales team too. That was the key: sell the seller. The best partners taught our team how to talk about their product and stayed engaged long after launch. Ongoing enablement wasn’t optional. It was the foundation of a successful channel partnership.
Measuring impact. SportsEngine formalized its partner architecture around $20M in revenue, but the real signal is having repeatable, partner-worthy customers and the internal discipline to execute. Even at $5–10M ARR, setting clear partnership standards helps teams focus on the opportunities that matter most.
A rough benchmark: a partner that can deliver 3–5% of total revenue is worth prioritizing. If a prospective partner can’t realistically hit that share, it may not justify the investment.
As the program matures, track metrics like partner-attributed ARR, pipeline impact, customer retention with partner-assisted accounts and cost to manage the partner. Use that data to decide where to double down and where to pull back.
The Bottom Line
Partner ecosystems are a force multiplier for SaaS+ companies. They turn your platform into a distribution engine, deepen customer relationships and open up new growth channels.
