$30M ARR, 14 Sales Hubs, and the 2016 Bet That Rebuilt LMS 365
A dentist’s library project became a SharePoint consultancy, then a $30M ARR business living inside Microsoft Teams. Rasmus Holst on the 14-hub sales model, 108% net revenue retention, and the $20M round a bootstrapped company didn’t have to raise.
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- Fifteen years as a consultancy, six years to $30M
- Microsoft is the channel, the pricing model and the biggest bill
- Fourteen hubs, split by geography and nothing else
- A $20,000,000 round the company did not have to raise
- 108% net revenue retention, and the team behind it
- Where the tape and the database disagree
In 2016 the chief technology officer of a small Danish SharePoint consultancy went to his board, asked for 50,000 Danish kroner, and proposed throwing the product away. “Freddie Bang, who’s still our CTO… comes and says to the board, I will rebuild this for Azure and for Teams,” Rasmus Holst told Nathan Latka. “And if it wasn’t for that decision, the company would never be here today.” The company was LMS 365, started in 2003 by a dentist who wrote a learning system for his local communal library. It broke its first million of revenue in 2018. It came out of 2023 at around $30,000,000.
What sits between those milestones is not really a story about learning software. Holst, a Dane who spent seven years in San Francisco and arrived as CEO in 2022 after over four years as CRO of Wire and a spell as COO of Huddle, inherited a product that lives inside Microsoft Teams and a customer list of organisations with deep Microsoft installed bases. Almost every number he gave Latka in April 2024 — the average contract value, the cash-flow profile that made a $20,000,000 Series A optional, the shape of the sales organisation — falls out of that one 2016 decision about where the software would live.
The channel was chosen before the growth, not after it. Rebuilding for Azure and Teams did three things at once. It defined the customer — core to upper mid-market organisations of 250 to 2,500 users with a strong Microsoft installed base. It inherited Microsoft’s commercial habits, above all the annual payment upfront that funded LMS 365 to $18,000,000 of ARR without an outside dollar. And it made the addressable market countable enough to carve into fourteen geographic sales hubs. The 14-hub model is the machinery; the Microsoft ecosystem is the reason it can be drawn that way at all.
Fifteen years as a consultancy, six years to $30M
Holst tells the origin story as a series of accidents. “For the longest time, it’s a dentist who decides to quit his job, write a learning system for the local communal library,” he said — the first LMS that ever existed, in his telling. “And from there on, it comes along as a SharePoint consulting company for the longest time.” The dentist has long since had nothing to do with the business. What Holst walked into was a company owned by a group of wealthy Danish individuals — bakers, shipping — with no connection to the software industry at all.
The founding year of 2003 is therefore misleading, and Latka pushed on it hard enough that Holst corrected the record twice on tape: not 2017 for the first million, 2018; and the company as it exists today was born in 2016, when the board funded Bang’s rebuild. That gives an annual run rate curve with two very different halves.
“The timeline between ’16 to ’18 is what it takes to get to a million. And then from ’18 to today is what it’s taken to scale from a million to 30,000,000… on the same business model.”
Rasmus Holst, CEO, LMS 365
Microsoft is the channel, the pricing model and the biggest bill
The product proposition Holst gives is deliberately narrow about placement and broad about scope. “We’ve been building a learning management platform built into Microsoft Teams because we believe that learning should be where you actually meet where you are at every day,” he said, before describing the widening of that into what he calls human success — performance, engagement, learning and skills, in one platform, and a category he says is there to be created.
Underneath the category talk, the commercial mechanics are ordinary and very specific. The core market is traditional industry: manufacturing, logistics, healthcare, financial services. A typical customer pays around $15,000 a year, which Holst says buys a few hundred seats — an annual contract value that puts 2,000 logos and roughly 2,000,000 seats in the same frame. And those customers pay the way Microsoft has trained them to pay.
“It was actually under the premise that we have a world class cash flow engine. When you sell to Microsoft customers, they’re used to paying upfront. So that made us bootstrapped all the way up to $18,000,000… of ARR, I should say.”
Rasmus Holst, CEO, LMS 365
- A countable target list — the qualifier is a strong Microsoft installed base, which turns “who might buy learning software” into a market model of how many companies of each vertical sit in each region.
- Cash before delivery — annual prepayment is the norm in the Microsoft world, and it is what let a company with no venture capital fund its own way from $1,000,000 to $18,000,000.
- The product sits where the work does — inside Teams, rather than as another destination employees have to be pushed towards.
The dependency runs both ways, and Holst is relaxed about it. Asked in the closing round which software he spends the most money on, his answer was immediate: “Everything Microsoft. My largest contract is with Microsoft.” The CEO he studies is Satya Nadella.
Fourteen hubs, split by geography and nothing else
Latka asked the question founders always ask — how do you hire your first ten reps and what quota do you give them — and got back an org chart rather than a number.
“Our quota philosophy is attainable. So that’s probably more Nordic than it is American. And that meant that we run 14 hubs, which is essentially SDRs and business managers as a hub. And of the 14 hubs that we run, 13 of them made quota or above last year.”
Rasmus Holst, CEO, LMS 365
13 of 14hubs at or above quota in 2023, on quotas Holst calls attainable rather than aspirational
The internal ratio inside a hub is not fixed. It can be several SDRs to one account executive or one to one, and it is set by the market model rather than by policy: in a large, coherent market such as the UK, an AE with a couple of SDRs behind them can cover a wider territory and carry a bigger number. What is fixed is the axis of the split. Latka checked it explicitly — not by contract size, not SMB versus mid-market, purely by geography. “Geography, yes,” Holst said.
He declined to give the quota figure at all. “I think that one I’ll keep to myself,” he said, arguing that quotas are distributed per hub according to the market each one sells into, so a single generalised number would paint the wrong picture. It is the only number in the interview he refused.
The capital story
A $20,000,000 round the company did not have to raise
The Series A closed in April 2023, from Blue Cloud Ventures, at a multiple Holst puts at “between five and six x” on the ARR at the time — which Latka read back as around a $100,000,000 valuation — “Yeah,” Holst said. All $20,000,000 went onto the balance sheet; none of it was secondary. Term sheets at $50,000,000 with large secondary components were turned down, Holst says, because the valuation attached to them was not one the company wanted.
The rationale was counter-cyclical rather than needy: while the rest of the market was digesting its 2021 valuations, taking capital was a way to grow through the downturn instead of waiting it out. The cost of having bootstrapped showed up in the diligence rather than in the product.
“The company was running immensely well, but for a $20,000,000 round, we had outgrown the, oh, we’ve done it on a spreadsheet. But that was what we had.”
Rasmus Holst, CEO, LMS 365
The pressure to change gear came from the board. LMS 365’s chairman came out of Navision, the Danish company Microsoft acquired, and Holst quotes his verdict on the business he was asked to fix: “This does not belong in a slow, steady growth phase. We can actually give it the burst, and therefore, I was brought back from Silicon Valley to come here and give that that burst.” His broader read on why Nordic founders under-perform their American counterparts is the same argument in general form — excellent at longevity, timid about the burst, and carrying a stigma around failure that in the US reads as a story about coming back.
The aggression showed up as M&A at the end of 2023, when LMS 365 bought Weekly10, an engagement and performance platform. Latka read out the trade coverage: Tech.eu reported that the Danish learning platform had bought Weekly10 for €4,500,000. “That’s in that range,” Holst said. “It was bought half in cash and half in share, so the numbers is there or thereabouts.” The strategic logic he gives is share of wallet in a consolidating market — buy your way into a broader suite rather than remain a single-trick offering, and be the consolidator rather than the consolidated.
108% net revenue retention, and the team behind it
The growth from just under $20,000,000 to about $30,000,000 was not, by Holst’s account, the acquisition. Weekly10 landed too late in 2023 to matter: “It had a very very limited impact on on the business last year.” What moved was retention. Net revenue retention finished 2023 at just shy of 108%, roughly seven percentage points better than the year before — which, as Holst points out himself, means the prior year was sitting around 100%.
He credits an investment made two years earlier, when the company had no customer success function at all. The first year went on the plumbing — NPS, customer focus groups, learning how to do the job. The payoff came in the second renewal cycle, when the same team ran the motion again knowing what it was for. The expansion itself is unglamorous: upselling seats and upselling plans into the existing 2,000 logos.
Total headcount in April 2024 — a figure the GetLatka database records independently, dated 1 April 2024.
Roughly a third of the company, recorded as a dated row on 8 April 2024, the day of the interview.
“So 18, I think. Something like that.” The function did not exist in 2022, and it is the one Holst credits for the seven-point NRR move.
Where the tape and the database disagree
The GetLatka record for LMS 365 carries the same shape as Holst’s account and a different set of dates in the middle of it. The endpoints agree; the rungs do not.
- 1 June 2018 · Revenue $1,000,000 — matches the year Holst gives.
- 1 Jan 2021 · Revenue $10,000,000 — Holst dates the first ten million to 2021.
- 1 Jan 2022 · Revenue $18,000,000 — Holst dates $18,000,000 to early 2023, and to the moment of the raise.
- 1 Jan 2023 · Revenue $30,000,000, flagged an estimate — Holst puts the same figure at the end of 2023.
- Apr 2023 · Funding the $20,000,000 Series A at a $100,000,000 valuation, the only funding row on file.
- 1 Jan 2024 · Customers 2,000, flagged an estimate — confirmed verbally on tape four months later.
- 31 Dec 2024 · Revenue $40,000,000, not an estimate.
Read plainly: the database’s intermediate revenue rows run about a year ahead of the founder’s own dating, and the $30,000,000 that gives this interview its headline is an estimated row in the database, dated a year before Holst puts it. On tape he confirms it three separate ways — “we came out of last year with about 30,000,000”, “around the 30,000,000 mark and 50% growth was last year for us”, and a flat yes when Latka asks whether the company is at about $30,000,000 of run rate today. The tape is the primary source for the dating; the database is the primary source for what happened next. Asked what he would finish 2024 at, Holst said “just north of 40”, and the December 2024 row records exactly $40,000,000.
One smaller correction is worth making because the tape contradicts itself. Latka’s wrap-up credits Holst with a team of 260 engineers. In the body of the interview Holst answers the same question with one word — “60” — against a total headcount of 200, and the database row recorded that day says 60. Sixty is the number.
Holst was 50 on the day of the recording, married for over twenty years, two children, a dog and a horse, eight hours of sleep a night at an average score of 84 on a Garmin. Latka’s closing question is always the same: what do you wish you knew when you were 20?
“Take it easy. Everything doesn’t actually go as fast as you think it will… I still run at a way too high pace, but I’ve learned that things don’t change as fast as I think they should.”
Rasmus Holst, CEO, LMS 365
Sources — Rasmus Holst interviewed by Nathan Latka, “This Danish CEO Hit $30m ARR using Unique 14 Hub Model Selling Software for Microsoft Ecosystem”, recorded 8 April 2024 and posted to YouTube on 16 April 2024; the GetLatka company database (dated revenue, customer, headcount and funding rows for LMS 365, with the December 2022 revenue and December 2023 customer rows flagged as estimates); Tech.eu on the Weekly10 acquisition, as read out on the tape and confirmed in range by Holst.
