MiniHotel SaaS Revenue (2025)

[00:00] Guys, minihotel.io got going in Israel in 2006, 2007, father son team. Today, they're doing a million 3 in annualized revenue up from a million a year ago. They've done this all bootstrapped. They own 100% of the business, which they love. They just turned out a 6x multiple. So call it like a $67,000,000 offer. They want to stay focused, keep building. They're focused on serving these 1,400 smaller hotel chains or folks managing vacation rentals that each pay [00:21] $85 per month. So very distributed customer base, which they love adding 40 new customers per month, mainly through $4,000 a month in paid ad spend and other sites like Capterra as they continue to scale. Hey folks, my guest today is Yuval Shtokhamer. He is a ITT and cloud admin started minihotel SaaS with his dad in 2007, has been leading the company operations since 2020. It's a hospitality SaaS. You can find it at minihotel.io. Yuval, are ready [00:47] to take us to the top? [00:49] >> Good noon and back. [00:50] Alright. Very cool. So what what is minihotel? Is it pure play SaaS? [00:54] >> Yeah. It's a pure SaaS, the classic SaaS for hospitality businesses, mainly low market. [01:01] Okay. So when you say more than 1,400 hotels in 70 countries use you, that means 1,400 hostels, hotels, etcetera, use you to manage [01:09] >> It's mainly mainly small hotels, guest houses, vacation rentals, hostels, guest houses, these kind of, businesses, a lot of the moms and pops Mhmm. Of the world of hospitality. And we have some four and five stars, but mostly it's not our expertise. Our expertise is like zero to two star hotels, mainly vacation rentals. This is where we excel, you know. [01:38] And Yuval, what do these companies, these hotels pay you on average per month or per year to use the tech? [01:44] >> Currently, it's around $85 per month. When we started back in 2007, it was higher, you know, and the monthly average price per hotel dropped since then, because we focused more on the low market as we went, you know, as we as we evolved, you know, and more focused because we started in Israel, mainly in Israel and later on in Argentina. And we work with bigger hotels, you know, like the three stars or in Israel, it was [02:19] >> more boutiques, you know, but as time passed by, we decided to focus more on the low market and more like international global markets, you know, so we have clients in 70 countries today. [02:35] And how many paying customers total? [02:38] >> It's like on our side, it's around, it's around 1,400 something like that. Yeah. [02:46] You've all kind of take the 1,400 times 85 a month dollars, you're doing about 120,000 a month in revenue? [02:53] >> It's around, we are almost 1,300,000 [02:59] >> ARR USD. [03:00] Okay, yeah. So that again, that'd be about 120,000 a month in revenue. Where were you exactly one year ago so we can calculate growth rate? [03:07] >> We were about 1,000,000. [03:09] Okay. It's about 83,000 a year ago. And have you guys bootstrapped the business? Or did you decide to raise capital? [03:16] >> Bootstrap $0 since 2007. [03:20] That's amazing. So you and your dad own 100% of the company? [03:23] >> Yeah, yeah, that's right. [03:24] That's awesome. So I guess how a lot of people go, well, Yuval, he cheated. His dad started and like, sort of he jumped in. What would you say to that? [03:35] >> You mean about the bootstrap referring to the bootstrap? [03:38] Well, how like you're like, how much of the blood, sweat and tears did you really put it into it versus just sort of took it over from your dad? How would you, how do you think about that? [03:46] >> No, firstly, my dad is still in the business, firstly, and I'm not a kid myself, you know, my father is like 65 and I'm 40 years old. So, when I started, I was 24, you know, and I really like, we started it both of us. Before that, we we were both like, employees for hire. He was a CTO and I was working in the same company. We worked with, the larger, the bigger hotels in Israel, like [04:14] >> the four and five stars. And, I actually, I was working in that company a little bit after him. He was working there, like, two decades, you know, and he was the CTO over there. And I'm an IT and cloud expert. And I used to code a little bit in high school, but my father is the real genius. He's a So I mean, [04:35] do you negotiate equity with your dad? How much equity do you own versus him? [04:38] >> Firstly, we started the business together, but he started in 2006 when he was just making the MVP alone. So when we launched in 2007, I started partial time. And later on, I joined into full time, but it basically was it for the two of us together, you know, started the business. But because he was there, like, one or two years before me is like 60% right now, and I'm 40%. I see. Which is fair, which is [05:06] >> we're we're not we don't have fights about that. Fight about other stuff, but not [05:11] Like what? What do [05:11] >> you fight about? Like, product, you know, and how to run the company, how to hire, you know, the daily daily stuff. [05:21] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually, saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect [05:45] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [06:09] get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is [06:31] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired, the valuation and the multiple. Maybe you're [06:57] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, We're gonna go back to the YouTube video here in a second, but [07:19] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into [07:45] the interview. How many folks are on the team today full time? [07:49] >> We are we have 25 people hired directly and full time in three offices, and we have, like, four or five more always, like, in the partial time. So it's almost right now, 30 employees with us together. It's 30 [08:08] employees. Many people argue right now where macro conditions macroeconomic conditions are not favorable for startups. How are you sort of managing to make sure you're sustainable? Are you profitable today? [08:18] >> Yeah, we are like, since we started the business, we were profitable all years since 2007 till now, except for 2022. Because in 2022, we had [08:32] >> investment of our own funds, and we opened up a new office in Serbia, you know, joining our two other offices. We have one office in Israel. We have only six people in Israel because it's, you know, it's expensive to hire here, you know, it's almost like The US, you know, so [08:49] How much does a does a senior engineer cost in Israel today? [08:52] >> It's around like [08:56] >> most senior ones take around maybe between 15 and $20,000 per month. You know, so it's stiff. It's stiff for us. It's stiff. My father is an engineer himself, but we have other like foreign engineers in Argentina, directly hired because we have three companies. We have the company here in Israel, and we have another one in Argentina and another one in Serbia. So it's three entities that we have locally. They're all [09:24] wholly owned subsidiaries of minihotel, right? [09:27] >> Yeah. Yeah. And all of them are directly hired and managed by us, all the employees. And it's quite nice because in Serbia and Argentina, we can afford ourselves to hire more. [09:40] How much did a Serbia office cost to build? [09:44] >> You're talking about, like, not the people, the the hiring of the place itself, the office. Just because it's it's just all the money. [09:53] What did it cost? [09:53] >> There's a story to it. I mean, to the office and how how cheap it is, basically. [09:58] Because So Yuval, sorry, just to be clear, you said you weren't profitable in 2022 because you made significant investments in, quote, openings [10:04] >> Oh yeah, so we all because we hired five people in the office, you know, so altogether we invested like around maybe, more than 1,000 k. For us, it's it's a lot of money, you know, of our own pockets. You know? [10:20] 1,000. So a million dollars? [10:23] >> No. No. I I mean, all year round, all 2022, we had more than 100 ks of our own money. We invested just to open up, to advertise, to hire people, to find the office. [10:42] >> But right now we have a very nice office over there with five people. We have our six people in Israel and we have 14 people in Argentina. And these are the ones directly hired. You know, and we have some more in Argentina that we, sometimes they like they are partial. So it's all together 30 employees. [11:03] Understood. Moving forward here. So, what's the plan for the business? You know, how do you plan to get 1,400 more customers? [11:11] >> Firstly, right now, COVID, actually, we've done quite a pivot because we were firstly working with legacy products and stack. And during COVID, we had time to pivot the business and to pivot both the strategy and the product. And we migrated into cloud. We migrated into Cloud and Browser since 2020, basically. And since 2021, we market only a new browser product, very nice, very top notch work. And since then, specifically, we add up around 40 clients per [11:54] >> month. And where do you know, [11:56] where do you find them? Tell me how you get the customer specifically. [12:00] >> Right now we have this year, we have a lot of organic, but we have still a lot of paid ads in Google Ads and in Facebook Ads. [12:10] How much total on paid ads did you spend in July of this year? [12:14] >> We spend around $4,000 per month. [12:19] Okay. [12:19] >> For paid, just for paid ads. I mean, that's less [12:23] than 2% though of your total revenue. That's very small. [12:26] >> Yeah, yeah, yeah. We are quite efficient. We are quite efficient and we get thousands of leads, you know, so basically [12:35] What's a keyword that you would run this paid ad against? [12:38] >> Hotel management software, hospitality software, PMS, because our specific business is called PMS, property management system. For example, you have Opel Cloud, you know, by Opel in our business, you have Cloudbeds. [12:52] Are you specifically, I was gonna say Yuval, are you specific, like when I do hotel management software, Capterra dominates that spot, Cloudbeds and [12:59] >> We are on Capterra as well. We are [13:01] on Captera. Got it. If I could just finish my statement here. So there's life house Cloudbeds and Captera. So my question to you is, are you specifically targeting only a certain geo when they search hotel management software in Google? [13:12] >> Yeah, right now we cannot target like all the world, although we have clients in 70 countries right now, but we are targeting by tiers. So we have like a second like tier two, for example, it can be the emerging markets and countries like it can be Philippines, it can be Hungary, etc. And we have like a tier, this is only for the EU, for example, EU countries. And basically we have IP based pricing. So if you [13:42] >> get from Tanzania, for example, or from Morocco or from US or from UK, you will get different pricing, different currency as well. [13:52] Yuval, on Capterra, Cloudbeds has three zero six reviews, Host Away has six thirty five, Think Reservations has 111 and others have hundreds. You guys are at, I guess, 21 right now against your 14 Is 100 Capterra main channel for you? Do you get a lot of customers from Capterra? [14:07] >> Yeah. We get more clients recently from Capterra and definitely we can see clients in the survey that we have saying they got from Capterra. Yeah. [14:15] So why do we invest time capturing reviews there? You only have 21 reviews. If that's working, why not go get a 100 reviews so you can rank above host Something [14:23] >> that we just started working on. So it's definitely at work. [14:27] I see. How do you ask how do you ask a customer for a rodeo on Capterra? What's this what's the channel you use? Email? And if so, what's the email say? [14:34] >> No, our own guys in the support team, when they end the call, they ask clients, especially the ones that are mostly they're happy, but the ones they have a good vibe, they ask them, maybe you can, put a good review for us, you know, and mostly they are happy to do it because the clients are mostly happy. [14:54] Where else are you getting customers? So you have paid ads four ks month, Capterra, where else? [14:59] >> Word-of-mouth is very strong and it's getting strong this year specifically. We see a lot of numbers in countries that we never imagined, you know, people from Philippines, Hungary, Czech Republic, it's all over. We get good traction right now. One big advantage for us that even our funded competitors don't do is that we are very much localized. Who's your biggest [15:23] two competitors? [15:26] >> Cloudbeds, Room Raccoon, Muse also. We have, although we are not funded and we are a small company, we have a lot of advantages, you know. We have invoicing, for example, already in more than 50 countries. So when you make, like, when you're in the reception making the accounts, making the invoice from the client, it's transmitted to the government. Yep. It's not just a paper. [15:51] Understood Yuval. How many sorry to cut you off. We're just short on time. Of the 25 on your team today, how many are engineers? [15:58] >> We have including my dad, it's five engineers. [16:01] Okay. Five engineers. And and if someone came to you guys and offered you a five x multiple all cash upfront to acquire the company, would you sell? [16:09] >> We already got we get like one offer per month organically, and we declined like a six x multiple recently. And So what was the [16:19] total what was the total value of that offer at a six x multiple? [16:23] >> It was it was I can tell you, it was around we just talked multiples, you know, back then we were 1.2, so it was between 7 and $8,000,000. [16:38] And was it all cash up front? [16:41] >> We didn't negotiate the terms yet. I [16:43] just So did did [16:44] >> you when you [16:44] so when you when you say you declined the offer, was there any [16:46] >> There was no letter of real There was no letter of intent, just a few Zoom meetings. And sometimes, mostly, we get, like after the first meeting, we filter out those. We are not seeking to sell or anything, but we do hear out people that approach us. And if there is a very good multiple for a secondary deal, we can hear them out, you know? So we are not saying no [17:12] to why didn't anyone. Why didn't this group? You liked them enough to take the Zoom call, but they didn't give you a term sheet. Why didn't they give you an LOI or a term sheet? [17:17] >> Because we declined when they say, smooth six six. We didn't want six six. We are growing right now, and we [17:26] What what do you think you're worth today, Yuval? [17:30] >> I in my head, it's at least $15,000,000. [17:35] Okay, so something like a like a ten eleven x 12 x multiple something [17:39] >> like that. Of course, we can wait and grow the company because we love working in our own company and we are growing and we add up 40 clients per month. And we have automated tools that help us add up a lot of clients with low CAC and quite fast, you know. [17:55] What is your CAC A [17:57] >> client mostly costs us around 300 or $400 to implement because we have automated tools that are helping us. Wizards, for example, that the seller or the hotelier sometimes he can self serve himself. [18:12] Yuval, just to be clear, you spent $400 to get an $85 month customer, so you have like a five month payback period. [18:18] >> Something like that. Yeah. [18:19] What about churn? [18:20] >> It depends. Our churn is quite low for us. [18:23] It's low [18:24] >> than 3%. [18:25] 3% per month? [18:29] >> It's the same, right? It's a percent. It can be the same for one month or per year, [18:33] but No. It's very different. If you turn 3% per month, then you're turning 36% No. [18:37] >> I'm talking yearly. I'm talking yearly. [18:39] You turn 3%. So you're turning under 0.5% of your revenue per month. [18:45] >> Yeah, we don't have a lot of clients leaving. Sorry, are [18:48] you sure that that's accurate? You're [18:51] >> churning We less than add around 40 clients per month. [18:54] Yeah, but customers you add. Churn has to do with your current customer rates and do any of them downgrade their revenue or cancel things? [19:01] >> We don't have more than one client per month leaving us, basically. [19:06] Well, a client doesn't have to leave you to count as churn. They can downgrade from a bigger plan to a smaller plan. That's still churn. [19:11] >> My question We don't have bigger or small plans. We just have a plan by the size of the hotel. [19:17] Okay, so just to be clear, I mean, these kinds of things go out of business all the time, I would imagine just the failure rate on the business, ignore your software is much greater than 3% per year. How do you have under three? I just don't understand I have under 3% per [19:28] >> year The product is very sticky. [19:31] But it doesn't matter Yuval, if the company goes out of business, they're not going to pay you no matter how sticky you are. [19:37] I mean, how did you make a bunch of these companies went dead during COVID, when no one was booking hotels? I mean, the hostels went underwater. I was an investor in a hostel, went underwater during COVID. [19:45] >> Our clients were, during COVID, we had 50% drop in our revenue, but the clients came through it and 90 plus percent of them stayed, basically. And we have a very sticky product and very, very good support team. And we are working since 2007. We know the business. I mean, this business is twenty years. [20:07] Yuval, I'm not saying you don't know the business, but I don't believe that this industry, not your company, this industry, I don't believe that has 3% annual churn. Just like this, I think so the survivor rate is under that just on the hostile business overall, but maybe I'm wrong. I don't know. Maybe you see something different in your data. Anyways, we're out of time on this one. I love what you guys built. I love I love [20:25] that you [20:25] >> Yeah. I mean, it just yeah. Just on [20:29] Go ahead. [20:29] >> No. About churn, if I take a 3% for, I don't know, 20 1,200 clients that we have, for example, it's like 30 something clients living [20:39] Yuval, I'm asking about dollar churn. [20:43] >> Oh, I see. No. I cannot calculate it because I in my head, it's by clients. It's not by dollars, but I can get back to you about that number. [20:52] No, no, it's okay. It's okay. [20:53] >> It's 20 or 30 clients per year, which is like in clients, it's basically less than 3%. [20:59] Yeah. Yeah. But if it's your biggest 30 clients, the revenue churn could be much higher than [21:03] >> three We don't have big or smaller clients. This is the nice. [21:07] So if someone runs that if someone runs a hostel with 800 beds, they're gonna pay the same as a hostel with five beds? No, but most most of our clients So then you have bigger and smaller? [21:16] >> No, no, no, most of our clients don't go over 70 rooms. Most of our clients are less than 50 rooms. [21:22] If someone has a bonus, you've also someone's [21:24] >> paying you [21:26] for 50 homes, someone else is paying you for two homes, you're going to charge them both the same rate. [21:31] >> No, but But then you have [21:33] bigger clients and smaller clients. [21:35] >> No, but again, but most of our clients are less than 70 rooms, and they are paying between 80 and 100 and $80 [21:43] What's their large don't name the customer, what's your largest customer pay you per month? [21:47] >> Around $400. [21:49] Okay. Got it. Okay. Yeah. So you are it's pretty very low customer. [21:51] >> Yeah. It's quite homogenous. This is what I'm trying to say. [21:54] Understand. Live [21:55] >> we live our business. It's in our blood. [21:58] Yep. Understood. Yeah. Alright. We're out of time. Let's wrap up here with the famous five. Number one, your favorite favorite book. [22:03] >> What got you hurt won't get you there? [22:06] Number two, is there a CEO you're following or studying? [22:08] >> Brian Chesky. [22:09] Number three, what's your favorite online tool for building the company? [22:13] >> Google Calendar. [22:15] Number four, hours of sleep. [22:16] >> Six. [22:17] That's pretty good situation married, single kids? [22:20] >> Married, two kids. [22:21] That's awesome. And you're 40 you said, right? [22:23] >> Yeah. [22:24] Last question, something you wish you knew when you were 20 years old. [22:28] >> I would say aim bigger. I was too modest then. [22:32] Guys, minihotel.io got going in Israel in 2006, 2007, father son team. Today they're doing a million 3 in annualized revenue up from a million a year ago. They've done this all bootstrapped. They own 100% of the business, which they love. They just turned out a 6x multiple. So call it like a $67,000,000 offer. They want to stay focused, keep building. They're focused on serving these 1,400 smaller hotel chains or folks managing vacation rentals that each pay [22:53] $85 per month. So very distributed customer base, which they love adding 40 new customers per month, mainly through $4,000 a month in paid ad spend and other sites like Capterra as they continue to scale. Yuval, thanks for taking us to the top. [23:04] >> Thank you very much. It's been great. [23:07] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM [23:32] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [23:54] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign [24:16] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. [24:35] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you. Hi.