SaaS Interviews with CEOs, Startups, Founders
SaaS company and want to move into payments? Justifi helps you do it fast. Almost $5b in platform GMV across 36 customers today.
06 Jul 2022
Chapter 1: What is the potential revenue unlocked by Justify for SaaS platforms?
You mentioned, Joe, unlocking at least 200 BIPs for these platforms when they sign up with you. If you're flirting with 5 billion, let's be conservative and say there's 3 billion right now on the platform. It's fair to say we can multiply times, call it 2%. You've unlocked something like 60 million bucks of potential new revenue for these platforms you're working with, correct? That's right.
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 Joe Keely.
He's the CEO and co-founder of Justify Technologies, which exists to accelerate the potential of vertical SaaS platforms with specialized payment infrastructure strategy and beyond payment fintech products. The company was founded in 2021 after the team had multiple venture-backed SaaS exits. Investors in Justify include Emergence, Crosslink, and Rally. Joe, you ready to take us to the top?
Very good.
Thanks so much. So you're talking payments infrastructure. Are we talking stripe, paddle, charge me sort of space or something different?
Yeah, that's right. I think if you think about us as like a Stripe custom connect for vertical SaaS platforms where they don't have to build all this stuff on top of it to get the best economics. So we came from a vertical SaaS background, took us a decade and a half to really get to what we would say sort of world class.
And we said, well, and thus the name, we said, well, that was a great ending, but that was really complicated. And that was really expensive. And maybe that's not right. So let's build what we wish we had.
It's interesting how you describe it sort of a virtual FinTech department sort of turn it on or off almost like racks based and managed servers, right? Turn on the team on or off. Is that sort of how you're thinking about this long term as a service component? There's a SaaS component, there's maybe a percentage of GMV component?
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Chapter 2: How does Justify differentiate itself in the payments infrastructure space?
Our technology and equally important, our team to help unlock what are the other opportunities? Because we have a toolbox just using the construction analogy here. We have a toolbox full of tools and not every tool is going to work for every every job. So but but there's oftentimes, you know, a, you know.
We think that one, on their funds flow, so that's all of the money that's flowing through the ecosystem. We believe wholeheartedly after being vertical SaaS veterans ourselves that the platform is creating the value. So they ought to share in the lion's share of that value that's created.
So that means 100 basis points in payments and another 100 basis points in other products, which you take that time- Do you take your cut out of that first 100 basis points? No, we are operating on a very different model in so much as we think that there might be 225 or 250. And so our goal is to first try to get the platform those 200 basis points plus. And then if we can make...
five or 10 or 20 basis points in addition to that as being that true deep partner. The great thing, of course, about vertical SaaS platforms and software sort of eating the world is that very quickly, a small platform can see funds flow of $50 to $200 million.
Yeah, we see this all the time when we interview SaaS founders. It makes tons of sense. But just to be clear, I'm trying to break down your model, excluding some of the services that you sell, which I do think are important for this. Your percentage GMV model, the way you make money, is you're going to help the founder get 200 points, and then you're going to keep 5 to 20 points yourself.
On top of that. That's right.
Amazing. Okay. To help me understand, you know, it's where you find folks that have gone through VC saying services are really important.
I think it's really important when you look at cohort analysis in terms of net dollar retention on folks that have done and paid you for services, it's always higher, almost always higher than folks that don't pay that setup fee or don't pay the service fee as well. So how are you embedding services? And is it on the front end or the back end of them installing Justify in the first place?
There's nothing to install it. It's more on a modular basis. So we have Insights Dashboard. So think about Insights as a scoreboard. If you're in the vertical SaaS business, your game is payments and embedded fintech. So if you're going to play a game, We think it's particularly important to keep score at the game.
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Chapter 3: What is the long-term vision for Justify beyond payments?
Are you having just way more success with the LMS or the insights or the basis point model only, or they're all using all of them?
No, there's a mix and it depends on stage. I think when, when a platforms early, you know, there, there isn't as much to analyze and help on the cost side, really it's, and it's easier to embed the, you know, the processing platform right away.
And then what we're often doing is really providing a discounted part of that strategy because we want to invest in emerging platforms because the catch-22 in the industry, of course, is, well, come talk to us when you have $500 million of volume. It's like, well, how can I get there if no one ever sort of helps me accelerate this? So we really have a soft place in our heart for there.
And then larger platforms tend to start We have $500 million, $1 billion platforms. They like to start on the strategy side because there's more nooks and crannies to dig into. They might have multiple processor integrations. But ultimately, to go on this journey, and we do think it's a journey. We think of ourselves a little bit like payment and FinTech. tech Sherpas in a way.
We're here to develop the map. We're here to carry the load. And so it oftentimes leads to using all of them together because the return is so material for a vertical SaaS platform.
And help me understand too, there are people listening right now going, am I too early or too late for Justify? What would you say the minimum amount of potential GMV is for a platform for them to really consider and making it worth their while to sign up for Justify?
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Chapter 4: How can vertical SaaS platforms effectively monetize payments?
Is it 10 million annualized GMV or 100 million or more?
Honestly, we have pre-revenue platforms. And if they're a vertical SaaS platform that is convinced that said, yes, I would like to monetize payments from dollar one, it's easy and we would love to work with them. And then we have a couple of platforms that are over a billion that work. are working with. So, and anywhere in between.
So it just really depends on, you know, we're having different discussions and there's different analysis for a much larger, more mature, but sometimes very large platforms aren't necessarily depending on when they were founded and what kind of payment stack they have. They're not necessarily that much more sophisticated sometimes in the payments game. So it all depends on the team.
So we have really anywhere in between.
So if we add up all of the GMB that you guys are sitting on, because that's ultimately going to power how good you can build your AI engine, right? And your dashboards and things. Is that above sort of 5 billion at this point?
We're flirting with it. Okay. This year, this year. It's still early days, but yeah. I mean, and I think that the GMV is really interesting because yes, you can oftentimes monetize the same funds flow in different ways because a platform can get best of breed at payments come in on the processing side, but then there's opportunities on the payout side.
We're doing a project for one of our platforms that is paying some of their sub-account customers out on the card issuing side. They're making money coming in and they make money coming out too. We're looking at both sides of the coin and do take a little bit more of a bespoke approach where
We don't feel like we need or necessarily want to work with, you know, thousands of platforms right out of the gate, like just really leaning into and this notion of taking a team approach to, you know, some select few platforms that really want to partner is really where we find we deliver and get the most value.
You mentioned, Joe, unlocking at least 200 BIPs for these platforms when they sign up with you. If you're flirting with 5 billion, let's be conservative and say there's 3 billion right now on the platform. It's fair to say we can multiply times, call it 2%. You've unlocked something like 60 million bucks of potential new revenue for these platforms you're working with, correct?
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Chapter 5: What are the unique features of Justify's product offerings?
Yep. Yep. No, this makes a lot of sense. Okay, cool. So talk to me about how you guys have funded the business. You bootstrapped or you decided to raise?
So we, the CEO founder of Sports Engine is at Rally Ventures. So one of my co-founders. So we incubated this inside of Rally Ventures, which has offices in Minneapolis and Silicon Valley. And then we went out for a seed raise and we brought in investors. Emergence Capital in the late summer, fall of last year, and then Fast Follow by Crosslink.
So this has been really predominantly venture-backed really from the beginning. We've raised 10.6 million seed round and we're off and running.
What was the, sorry, the round you raised last year was 10.6 seed? Correct. And the round you raised this year was your Series A and how much was that?
No, that was just an extension on the... It was a slight... So we did 6.6 and then we added four to it. Ah, got it. We had been talking with the same investors all along and it was just more of a timing thing as part of the seed race.
I see, I see, I see.
We're looking to do a Series A. We have plenty of runway, which is always a good thing, but the timing on it, we'll see.
How many folks are on your team today, full-time?
We have about 27 folks on our team today.
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