SaaS Interviews with CEOs, Startups, Founders
Rockstar Guitarist Launches SaaS, Breaks $3.6m in revenue, $30m valuation
30 Jun 2022
Chapter 1: What is the revenue and valuation of Ember after 10 months?
3.6 million already there on Uplift. 10 months in is pretty good.
Pretty good for 10 months.
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 these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Kurt Averall.
He's the co-founder and CEO of Ember, where he's responsible for leading the development and execution of long-term strategies and identifying key opportunities for growth within the industry. He's obsessed with helping people own the vacation home of their dreams, where they can create lasting memories of family and friends.
He's a serial entrepreneur and has taken more than one company from inception to scale, having raised over 70 million in venture capital financing at his prior startups. Kurt, you ready to take us to the top?
Absolutely. Thanks for having me.
You bet, man. So before we get into Ember real quick, quick on your backstory. So what was your last company?
Company was called Canopy. So Canopy is a SaaS software solution for accountants.
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Chapter 2: What is Kurt Averall's background before founding Ember?
I mean, obviously, I think you guys raised significant capital there. How much did you raise at Canopy?
We raised, at the time that I left, it was about $70 million.
Yeah. So that would have been what? That would have been just post series C?
It was like a B1, I think.
Yeah. You guys have quite the funding history. Not traditional. There's some debt mixed in. There's some up, down, all over the place.
Yeah. Yeah.
Yeah. Okay. So I guess that's a good lesson here. First, too, before we jump into Ember, how did you replace yourself as founder? So leave it in good hands and make sure you're exiting gracefully there.
Yeah. I mean, I think like as founders, you have to realize that, you know, there's going to be a time when you're there with the company growing it. And then there's going to be a time when it's time to move on. And for me, it was like a deeply personal decision to move on to the next thing.
The way I viewed it is I think, you know, I thought that there, you know, a after five years of being a founder at a high growth startup, you're ready for a sabbatical. And so taking a sabbatical was probably one of the best things I've ever done. And then, B, I think as an entrepreneur, what I love to do is build and create. And so I knew that I could go out and build the next thing.
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Chapter 3: How did Kurt transition from Canopy to Ember?
And so they think they're going to be there six months out of the year, but they end up only being there six to eight weeks out of the year. And then that second home becomes a second job because homes are work. And whether it's just fixing a faucet or paying your property taxes, that's just work. It's just a lot of things that are going on in that home.
So what Ember does, it's kind of bridges a gap. It sits right between an Airbnb and a full home ownership where we take a home and we buy it with an LLC and then split it into eight different shares. And a person can buy anywhere from one to four shares of that home. Now, think about these homes. These are high-end vacation homes.
The goal is to make it so that when you walk in, there's a wow factor. Your friends and family walk in. When we buy the homes, they're high-end. Then we also furnish the homes and with high-end furnishings and hand it over to the owner group, totally turnkey.
At that point, we manage the property so that we abstract all of the work that comes with a second home away from the ownership group so that they can just enjoy their vacation, but while still retaining that ownership and the asset that can appreciate over time.
Yep. Let's look specifically at 2293 North Cerritos Road, Palm Springs, California. You've got it listed right now up on the side as potential by $224,560. Now, is that what you would pay for one-eighth ownership or is that the total price of that? That's not the total price of the house.
That's the one-eighth ownership. That's right.
Yeah.
What that does is it gives you six weeks out of the year at that home. And if you wanted to be there six months out of the year, you buy half the home instead of one-eighth, which we have some customers who do.
Yeah. So 224,000 for one eighth, the home price is about 1.8 million total. If you want to buy more than 44 nights per year, you just buy two, three, four, five eighths of the ownership stake. Have you pre-negotiated basically almost like a rofer with the current owner or an option with the current owner? How do you generate the supply on your marketplace?
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Chapter 4: What unique model does Ember offer for vacation home ownership?
Most of the cash that we put on the balance sheet is to buy inventory. And so, and so, yeah, I think like you could see a three, four, five X growth over the next 12 months, you know, based on, on what we know of the market over the last 12.
Where'd you get the cash to buy up all the inventory? I mean, to get, to get going.
So it's a combination of the equity dollars that we've raised from the venture side. And then we also layer in a debt, some debt on top of that, that gives us kind of the purchasing power. You know, the one thing I'd mentioned that you, that you brought up was the interest rate.
So typically when you think of like a one eighth ownership in a home, you're not thinking like, Oh, you know, that's something that can be financed, right? That in fact, historically that way, that's not a product that would have been a financeable, but yeah, Um, that's actually not the case with these shares. Like these shares, um, can be financed.
Um, we have a partnership with a bank that finances these shares at a low interest rate. In fact, in the Newport beach homes, um, the interest rate is 4%. So it's actually less expensive than a, than a traditional mortgage in, in kind of the current environment, which is, uh, which is amazing.
Very interesting. Now you mentioned equity. So it sounds like you've closed a seed round. When was that and how much was it for?
Yeah. So we closed a seed and an A, which we kind of announced together at a $17.4 million financing. The A was led by Peter Thiel. So we were super excited about that to have him lead that financing. And we closed that in February.
Okay. And sorry, if you split that out, how much was the series A?
The Series A was 15 and the seed was 2.4.
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Chapter 5: How does Ember manage the properties it offers?
Fascinating. And you said earlier, you have 15 million sort of available today, but you've already sold multiples of that. So if we assume conservative 30 million, we could take 30 million times 12% uplift, right?
Good. Yeah.
3.6 million already there on uplift. 10 months in is pretty good.
Pretty good for 10 months.
Why is that? I mean, that's actual, right? I mean, why would it not be 12%? Have you always had 12%? Yeah.
It's always been 12%. Yeah.
Okay. So there we can brag about you a little bit. Okay. That's pretty good for 10 months in.
That's not too bad.
Yeah.
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