SaaS Interviews with CEOs, Startups, Founders
ServiceMax Breaks $150m ARR, Kills 2021 SPAC, Growing 20-35% This Year Helping 400 Customers Schedule Technicians to do Physical Repairs
07 Jul 2022
Chapter 1: What is the current ARR of ServiceMax and how is it growing?
We are very happy about the progress of the company for sure and way above $100 million right now as I look at the ARR as well as we currently are at the company at ServiceMax.
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 Neil Breaux.
He's the Chief Executive Officer at ServiceMax and a member of the Board of Directors. He's got an extensive background in the tech industry and a proven track record of growing businesses. Previously, he was a CEO of IPC Systems and during his tenure, sold the company and led a SaaS and data transformation of the company.
More recently, he served as an operating partner at Silverlake, the global leader in technology investing. Earlier in his career, he was part of John Legere's leadership team that helped transform Global Crossing through consistent growth. Neil, you ready to take us to the top? Let's do it, Nathan. You were before my time. I was born in 89. What was Global Crossing?
You're a young one. I'm actually turning 45, so now I've become the old guy in the room. But Global Crossing was a very infamous telecom company that actually the world has benefited by now. They laid undersea cables by which internet was able to go across continents. And It was one of the hottest startups, by the way.
I think the fastest to get to $15 billion of market cap at the time, startup that was formed by a founder called Gary Winnick. And I actually came to Global Crossing the day the company was declared bankrupt. So that was my first day. was the dot-com boom happened and the bust happened and Global Crossing had its financial issues.
And the CEO that I became part of, John Ledger, who ultimately also was CEO of T-Mobile, who did a great job over the last number of years, him as well as the leadership team, which I was part of, we restructured the company and ultimately sold it to Level 3 about eight years later.
So it was a little ahead of its time, but we got it back on its firm footing and it's doing great things for the world right now.
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Chapter 2: What challenges did ServiceMax face during its SPAC process?
So I really wanted in to make a difference in the company. And for the last three and a half years, this team's done a remarkable job so far. running ServiceMax. I'm pretty proud of the progress we've made.
How many folks are on the team now today? We've got like 580 people. Okay. How many engineers? Engineers are 250 of that. Okay. Interesting. Now, you're not a pushover and you're talented and you have a lot under your belt. So you're asking for equity coming into this deal. How's a guy like you trying to negotiate a position in a thing like ServiceMax? How much equity do you come in and ask for?
Yeah, I'm not going to tell you the equity piece. It's actually something I've forgotten, quite frankly. As I said, I'm going to turn 45 in a month or so, and I'm at the position in my life where I've been lucky to have been in very significant positions before ServiceMax. I started a little early, and I'm now really focusing on how could I scale this team?
How could I ensure that our team is actually getting all the things that I got for the last 20 years? The mission of what we do, Nathan, for our customers, it's really the thing that gets me up at night. So this isn't a go make money and figure out how to transact. This is, for me, and this is why I said put me in, coach, this is a company that's going to make a difference for a long time.
I don't want to leave for a long time. This is a company I want to, quite frankly, if I can, retire at. And there's so much runway for the business that we're doing. So that's how I looked at it, Nathan, versus the dollars and cents behind it.
Fair enough. You're a nice guy. How many customers now today?
We've got over close to 400 now, enterprise customers, all enterprise B2B and large enterprise to give you context.
In the press release when Silverlight came in, it also said 400 customers. That was several years ago. So you've either, you've sort of maybe churned lower ARPU and added higher sort of AC folks or you've expanded in the accounts to grow revenue. Sort of which one was it?
Yeah, we've done a great job around our retention rates are in the mid to high 90s, right? So we do a phenomenal- Gross or net? Gross. We actually put a press release out for our net retention. Our net retention is in the 115, 121% range, right? So it's a- It's very nice.
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Chapter 3: How is ServiceMax positioned in the field service management market?
That was $148 million deal price back in November. Obviously, you want to keep talented folks around. Typically, there's cash plus earn out plus stock. Are you able to share what portion of that was cash versus stock or earn out? No, I'm not. You guys haven't talked about that publicly? I don't think so. Okay. Fair enough. Let me see here. Did you...
A lot of the press around what you guys are doing end of last year, I mean, you guys are talking about like SPACs and stuff, which I would argue is just like from a discipline perspective. I mean, now you look at SPACs and you go, are these things like a big gimmick? What's going on here? I mean, why even waste your energy and time even thinking about that at the end of last year?
know it was um i think it was a great uh there's two things that actually was the value of doing it number one is we're public company ready right and creating all the infrastructure brought in general counsel uh brought a chief accounting officer and having the hygiene and discipline to be thinking like a public company is actually of real value in addition to obviously having the private equity back mentality
Public companies go through different types of scrutiny. And that whole foundation laying is, I think, long-term a really good thing. Who knows when the public markets open up again? What we will have is the ability to actually execute on whenever that opens up in the next year, two years, three years, four years. But that hygiene and foundation laying was really important.
And I think accelerated some of the strength of the foundation to do things like M&A over the next decade. number of years to actually continue to think about the trade-off of organic growth versus profitability. And I think that discipline was awesome. So I look back at it, we chose not to go down and execute on the SPAC at the end, by the way, to be clear, but all the work that we did was huge.
100 plus investors that never knew about ServiceMax being able to talk to them like we are with you, Nathan, and going into the guts.
always a good thing and now we're seeing the value of that of people investors that wanted to invest in the company as a public entity now looking at it saying hey there's an m a target that same seems really interesting the service facts that i learned about it why don't you go talk to these guys so i think the more people learn about service facts yourself your viewers included really fall in love with the the actual business and then the economic model
is very alluring. And so more people know about it, the better. And I think that's the value looking back at it. Of course, what's happened in the spec market and be like, man, but we didn't know that 20, 20 hindsight, but we gained a lot from the process, Nathan, for sure.
Yeah. That makes a lot of sense. I mean, last question we'll hear before we wrap up. I mean, I would argue me, I don't know how you feel about this, but if you guys were listening to list today, uh, I don't know that'd be super strong listing because you look, you're seeing massive valuation range on net dollar retention.
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Chapter 4: How does ServiceMax ensure customer satisfaction and service revenue resilience?
Right now, only 300,000 on ServiceMax. A lot of expansion opportunities there. Right now, net dollar attention, 120, 125. So again, room to expand there as well. Building a disciplined company here with about 580 employees, 250 engineers. We'll see what Neil does next. Neil, thanks for taking against the top.
Thanks, Nathan. Appreciate the time.