Maropost's Founder Sold 20% of His Company, Then Bought It Back With the Same Money
Ross Paquette's 2016 round put no money into Maropost — which is exactly why he could undo it. The cap table today is him and his option holders.
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Ross Paquette took $37 million off the table in 2016, sat on the cash, disliked his board meetings, and used the same money to buy the investors back out. That sequence is why Maropost’s cap table today contains him and his option holders and nobody else.
The buyback only worked because of how the original round was structured, and Paquette knows exactly how close it ran.
At the time I had just taken the capital, didn’t spend any of it, invested it, and the money was just sitting there. We’re very fortunate in that regard to have done an all-secondary round — whereby we didn’t put all the money into the business, spend the money, and now we’re like, we’re totally screwed here.
Ross Paquette, founder and CEO, Maropost
The round, and the unwind
The 2016 deal was $37 million US — $50 million Canadian — at a $163 million valuation, entirely secondary. No money went into the company; a little under a quarter of it changed hands, with the founder and, in his words, everybody getting a bonus.
Paquette is careful not to blame the investors for what followed. “They’re really great people, great groups,” he said, before naming the actual incompatibility: he ran a business on profitability and growth simultaneously, and the money on the other side of the table wanted growth at all costs. “We just really weren’t aligned from a philosophical perspective — but I don’t think that would have been any different with any other parties, frankly.”
He had no preparation for the board itself. At the time Maropost was doing about $16 million with roughly twenty employees. “I had absolutely no idea. No preparation whatsoever.” Over three years the business went from triple-digit to single-digit growth, and “really nobody was happy across the board”.
Latka pushed hard on the exit price, because a buyback at the entry valuation is not how these usually end. The answer was more prosaic than a premium negotiation: something close to what the money would have earned sitting in the market instead.
The numbers that do not quite meet
Maropost’s revenue history, as Paquette recites it, matches the GetLatka profile line for line: $300,000 in 2013, $3.3 million in 2014, $13.3 million in 2016, $26 million in 2017, $40 million in 2019.
The present-tense number took three attempts. Asked for customers and ARPU, Paquette gave just under 5,000 and about $1,800 a month. Latka multiplied: $9 million in MRR. “Give or take,” Paquette said. “Maybe a bit less, maybe a little bit over.”
Then, later in the same conversation, asked directly what MRR was, he checked and said around six — and when Latka annualised that to $72 million, corrected him again: “It’s just under 60.”
Two of those cannot both be right. 5,000 customers at $1,800 a month is $9 million in MRR and a $108 million run rate. The figure Paquette actually stands behind is a third lower — just under $60 million, which is what the profile records for April 2022. Read the ARPU as the top of a range rather than an average and it reconciles; taken at face value it does not.
He was also asked whether Maropost would break $100 million in run rate that year. “Just shy of it, actually… most likely” — which would mean $8.3 million in MRR by December 2022, up from the roughly $5 million a month the same conversation settles on. That is the projection on the record; it is not a figure the profile carries.
A dividend machine, not a salary
The reason profitability is not a preference here is that it is the founder’s entire compensation.
I don’t have a salary. I don’t have a bonus. I don’t have anything. I have my ownership in the business, and if the business does well, I do well.
Last year’s EBITDA margin was about 52 per cent, on revenue the profile records as $63 million for 2021 — itself carried as an estimate. The dividends that margin throws off do not all reach the founder’s pocket; a large share funds acquisitions. “It’s great to grow 50 per cent year over year in my opinion,” he said, “but it’s also great to have a 40 or 50 per cent EBITDA margin.”
Employees hold options rather than shares, and cannot sell them back to the company. Their liquidity event is the one Paquette is steering toward — a public listing — with a caveat about who runs it that is unusual to hear from a founder.
“I don’t aspire to be the CEO of a public company,” he said. “After a few years I will either bring somebody in from outside or have somebody elevate within the organisation, and we’re positioning ourselves even now for those stages.” His goal is to retain 80 per cent and work on product and vision.
Two Australian acquisitions, both at Christmas
Maropost bought Neto at the end of 2020 and Retail Express at the end of 2021. “Clearly we have an affinity for Christmas deals,” Paquette said. Both were paid for entirely in cash, which is what keeps the cap table clean.
Just over $10 million USD in ARR, majority-owned by Telstra. Paquette reads the seller’s motivation plainly: to a company doing billions, “a $10 million revenue company is really not that important to them”. Latka put the price at $60 million and a six-times multiple; Paquette corrected the currency — in USD it was closer to 4x.
A point-of-sale business, bootstrapped and founder-operated, slightly smaller, at a similar multiple. Its founder became Maropost’s managing director for Australia and New Zealand — which Paquette describes as a big part of the deal rather than a side effect.
His test for whether an acquisition worked is deliberately unglamorous, and starts from the base rate. “The percentage of failures is so high,” he said. “If you can look back and say, would I still do this — twenty-four months later, twelve months later even — that’s really the key.”
Fifty parties, not five
The secondary in progress at the time of the conversation was about $50 million at a $1.7 billion valuation — roughly 28 times the run rate. What is unusual is the shape of the buy side.
“There’s not just one or two or even five parties involved. There’s more than 50,” Paquette said. Customers, partners, employees, family members and friends were all invited in, ahead of the listing: “this was their opportunity to enter into an investment that they can join the journey over the next few years”.
The IPO metrics he was asked about hold up on his telling. Net dollar retention “well above 150” this year, driven by cross-sell rather than price rises — a customer entering through the service cloud at $1,000 a month becomes a $4,000 customer once marketing and commerce are added. Revenue per employee just over $200,000, against a target of $300,000 to $350,000, on a team of 305 with about 125 engineers.
The number that surprises is the sales headcount: fifteen quota carriers. Paquette said “only fifteen” and then explained the “only”: at this revenue, the conventional shape would be “a hundred people in sales at a minimum, and then marketing would be another 50 or 60”.
Asked what he wished he had known at twenty, the founder of a company that has never had an outside shareholder for long took a while, and then gave the least triumphant answer available: “I wish I knew how hard it would be to get to this point. At the time it seemed very easy, and it wasn’t as easy as I thought it would be.”
Sources — Ross Paquette interviewed by Nathan Latka, recorded 30 April 2022. Revenue, customer, headcount, funding and valuation figures from the Maropost profile on GetLatka, with dates as recorded; the 2021 revenue figure is carried as an estimate.
