SaaS Interviews with CEOs, Startups, Founders
Leasecake Helps Companies Manage Leases, Breaks $1m in ARR
28 Oct 2021
Chapter 1: What is Leasecake and how does it help companies manage leases?
We're basically at a million in ARR. We're tracking to be a million in ARR. I think it was very important to make sure it was an affordable price point. It's a totally new domain, so we can't just say, hey, it's a $50,000 enterprise sales cycle. We typically have a fast sales cycle of anywhere between two days to two months, I'd say, on average.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Taj Adhav.
He spent more than 25 years in technology and business. After starting as a big four CPA, he managed more than 2 billion in assets for Disney development company. As an early hire at Channel Intelligence, he helped drive the company to a successful exit to Google in 2013. Taj, you ready to take us to the top?
Absolutely. Thank you very much, Nathan. Looking forward.
So what was Channel Intelligence? What were you guys building back then?
It was an e-commerce data platform that effectively put buy now buttons on manufacturers' product pages as the internet and e-commerce was really taking off. We literally managed billions of microtransactions and billions of dollars of making it easy for consumers to click and find the places they can buy products.
Were you early enough there to get some equity or no?
Yeah, absolutely. I was employee number eight. While I was a CPA at Disney, I'm like, man, I need to repop myself. And was there CFO? Then I transitioned into business development. I saw the power of software. So it was good to get in early.
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Chapter 2: How did Taj Adhav transition from Channel Intelligence to Leasecake?
One of the most obvious is missing a renewal option. The others are dates that are specific to when a personal guarantee should expire, or do you need to get permission from a landlord to sell your locations? All of those kinds of things are really buried in a piece of paper that sits in a drawer that no one looks at until it matters.
So we've created a cloud-based system that puts all that information in a very easy-to-use application and provides proactive notifications as well and team collaboration.
And so what are customers paying on average for this technology?
Yeah, so we're based on a per-lease model. Our average customer is probably around $10,000 to $15,000 a month on average as our deal size has gotten larger. We've seen explosive growth through COVID, which frankly surprises the investor community, but it doesn't surprise us. So that's our average deal size. And it's an annual licensing fee.
And it really kind of scales up or down whether you have three locations, 30 or 300 or 3,000.
Preston Pyshko So, Taj, just to be clear, average customer paying $10,000 a month or $120,000 a year upfront? Taj Mahal Nope, $10,000 a year. That's the ACV. Preston Pyshko Oh, got it. So that's not the ARPU. That's the ACV is $10,000. Taj Mahal
Yep, that's correct. And we found that this model is a very simple model to understand. And because we're a network effects play, we're an operating system play, it's important as we look at these clients and we say, there's a better way to do this than spreadsheets or Judy in the back that's
I totally get the product. It makes complete sense. I think the audience totally gets that. People are rushing to sign up right now. So when you're charging a per-lease model, someone paying you $10,000 per year, how many leases are they probably managing at that price?
Anywhere between, let's say, $25,000 to $80,000 to $100,000.
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Chapter 3: What unique market need does Leasecake address?
Okay. Yeah.
So a lot of growth here. So you raised the seed sort of right in the middle of all this growth, 3.2 million raised. Now, did you do that on a priced round or a save? It was a priced round. Yeah. Okay. And what sort of valuation did you go out and raise that?
It was a, let's see, it was a 12 post. So it's 12.2 right now.
12 post. And was that the right, looking back, was that the right price or would you, could it get higher or lower? What'd you think?
I think we got a really fair deal. We pushed and we negotiated a term sheet that was very palatable to us as founders. I think our initial term sheet was a little bit lower, but I think we found the right number to make sure that it was kind of a win-win on both sides.
And it sounds like when you closed that earlier this year, what you're probably doing like 40 or 50 grand a month in revenue?
Yes. Yeah. A little less than that. We saw this hockey stick happen, Nathan, probably in June. Hockey stick happened again back in 2020, despite COVID, but certainly with more rocket fuel in the engine. This summer was phenomenal.
Now, is the $3.2 million you raised in February the only money you've raised, or did you raise any before that in 2018?
We did have a convertible note that was provided to our earliest investors. So that kind of helped us continue to bootstrap. But this round, this is the only price round that we've had.
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Chapter 4: How does Leasecake's pricing model work for customers?
Kids are off and they're, they're living there. How many, how many kids? Two daughters. Two. Very cool. And how old are you? I am a lot older than you would think.
Okay, you don't want to share your age. No problem. We ask because then the next question as we wrap up here is take us back to your 20-year-old self. What's something you wish you knew?
What I wish I knew was, man, find something that makes you happy. Success will be absolutely yours to have, right? Never ever become a CPA because your parents told you to. I have no regrets, but that's my story.
Leasecake.com founded in 2018. They raised $2 million on a note, then raised a price around $3.2 million on a 12-post money earlier this year as they continue to scale up to about $1 million in terms of run rate. That's up from just $10,000 a month a year ago. So really healthy growth, serving 250 customers.
Over 10,000 locations are managed by these B2B corporate clients, again, who need this location management system called Leasecake.
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Chapter 5: What growth metrics has Leasecake achieved during COVID-19?
Taj, thanks for taking us to the top.
Thanks very much, Nathan. Enjoyed it.