FormPiper Revenue & Valuation (2024)

Introduction hello everyone my guest today is Brad Parker he's a 20-year veteran in the pet retail space and a Serial entrepreneur he owns four retail pet locations a marketing company called social network MD a finance company called financing your way and a SAS business called form Piper he thrives on identifying the problem and solving it and helping retailers Drive success in a business Brad you ready to take the stop I am let's go all right so what is form Piper and is it a pure play SAS business yeah form Piper is um software designed to help retailers automate their consumer Finance process and and give me maybe an example retailer that uses you uh take a furniture store you go in to make a purchase uh you want to use their same as cash offerings they might use four or five different uh finance options so we really streamline the process for the customer to make that easy for them to get that approval and are they always brick and mortar locations or do this online digital brand as well right now we focus on brick and mortar retail brick and mortar retail okay and and give me a sense of how you're helping these guys if I go into a brick and water spot I buy a mattress and then they're using you on the back end to help me Finance the mattress purchase how's that all work we really streamline the process and make it quick for the consumer so the consumer only has to fill out one application um if you're not using form Piper or some form of portal system you might have to fill out multiple applications to get that approval or the sales associate might have to fill out multiple forms so the time can really add up uh when you're sitting there waiting for an approval uh you don't want to wait for 30 minutes you want to know that you're approved within a few minutes so you can continue on with your purchase um and have a good experience now when did you launch this business about 18 months ago oh well congrats so just getting in the market here and help me understand a little bit about how you found these brick and mortar retail locations like you know the local mattress store to use you well it really started off with my retail locations uh so I was able to identify a problem in my own business uh we use five to six different lending options and so it would take us about 25 to 30 minutes to get the approval that we needed if we needed to use all of the options uh so we knew we had to have a solution so I was able to bring my my pet team together with my finance company my marketing team uh whiteboard it out and for Piper was born so we've taken that 25 minute process down to a couple minutes so it's been fantastic and how Currently serving 90 customers many customers are you serving today currently 90 90 folks now do you do you Bill based off like number of locations or is it just 90 no matter if you have one location or 100 locations basically we build per location so you can have our software on as many devices as you would like in your location but if you're a multistore operator you would have a license per location okay so 90 is like the number of Brands they could have 180 locations under the 90 Brands no technically right now we have 90 retail businesses using the platform yeah what I'm trying to differentiate between is the number of retail businesses using you and then how many locations they have where they've installed you yeah I mean it's really close to I mean we have a few multi-store operators you know one has 10 um a couple have five so you're probably looking 60 different business owners with 90 90 licenses being used I see I see okay and what do you charge on average for these licenses on average right now our our license fee is about $200 a month it can be anywhere from $150 to $300 a month depending on how many applications you're running okay so this SAS part of your business then what it's doing about 18 Grand a month in Revenue you got it yep and where was it ex I know you launched 19 months ago so if we go in I guess when you were six months old so 12 months ago what was it doing do you remember uh yeah it 12 months we it took us about 3 to four months to get the MVP built and we launched with about 40 uh people to to test then we moved to our second iteration um and then that's where we've jumped up to where we are now uh timeline wise uh what do you remember like end of December 2019 so about a year ago a year and two months ago probably about half about 8,000 9,000 a month okay interesting now how did you you eat your own dog food you had your own problem you built it tell me about the story on the first customer you got that was not your own your own location uh it was it was similar business models to mine I'm in a franchise so I was able to go out to my network of friends that are in the same space I knew that they had the same problem uh so when I was able to show them what I had created um it was a no-brainer for everybody in the industry um we all suffer from the same issue um so uh it was just a real simple transition popped it in and everybody's extremely happy with the with the product so far what's the pet franchise Line Pet Land Pet Land interesting and what is a product that a consumer would come in and buy try and use the old financing and you'd have to wait 30 minutes to do it I mean imagine they're not financing like a dog bowl right no it would be a pet and then the supplies that go with it so it could be a puppy kitten bird it could be fish fish tanks uh even small animals the whole goal in the pet land model is to identify the right pet for the customer and then meet the needs of both so typically a consumer is going to purchase a lot of supplies to go with that pet uh so sometimes breaking it up over 12 months or 24 months can make that process a lot easier got it so these were $1 th2000 $3,000 purchases you got it yep I see very interesting okay so scale with the franchise model you're not doing $18,000 a month in Revenue have you bootstrapped yes all bootstrapped love Bootstrapped that man yes very how many how many VCS have you turned out uh we haven't had any reach out you know we kind of been over in our little corner of the world just building it so you know we'll see what happens but uh we've bootstrapped all of our companies and like being in control and so we just continue to continue to scale um we recently acquired the finance company and for Piper merged together uh so it's going to take our monthly revenues up to six figures so we're going to be able to continue to pour money into marketing and our team and grow it you know on our own own path tell me what that means what's it mean to acquire the financing company what what is the financing company's Revenue uh that Revenue right now is about $1 to $120,000 a month just depending on the month uh so what we do is we help retailers identify the right financing companies to use for their customers and then we're going to receive uh basis points on the back end there so we actually how many on usually on average basis points that can be anywhere from one to two I sorry 100 to 200 one to two% yeah yeah so what form Piper does is it actually makes it easier for the business to use multiple forms of financing so what we see is the financing Revenue also increases so we've seen huge spikes so we just decided that you know now that the software is proven and tested uh we're going to move that into all of our retailers through financing your way uh and so it only made sense for it just to be one company so we could really scale yeah and the name of the name of the company is financing your way so how much gmv like how many loan how how much went through their platform last year total about100 million 100 million wow interesting so how do you you just bought this company how do you value a business like this where they're doing 100 million in gmv they're making about uh it sounds like about uh 1.5 million based off their 1 2% fees you came in and buy it what do you buy it for and how do you value it uh well I own the company so I didn't really it's not really technically a buy we just kind of merged them together oh I see you own 100% of that business that's correct me and my business partner yeah got it well hell that's an impressive story when did you launch that company seven years ago oh interesting so those are really your roots now did you did you launch this at the same time you opened your retail stores with Petland so that you could do better financing so retail I've been doing that for 20 years so basically 20 years in the pet space uh seven years in the finance space realizing that financing was important to the business model and then now 18 months in the software business to help catapult and make the systems and processes easier uh you know what it really does uh you know form Piper is designed to shrink the time that it takes to run applications but what it actually does for the retail business is it allows your key employees to be out on the floor helping customers as opposed to running applications and doing data entry so it's had a lot of benefits that we weren't really planning on you know so um it's been it's been a great marriage between between the companies so the combined entity will do Monthly recurring revenue what in monthly occurring Revenue uh last month uh we did $138,000 between the two this is interesting and over the next year which do you anticipate will grow faster the pure software player the financing percent gmv model it's going to be interesting to find out you know because we you know just got the software to where we can scale it um I think from a percentage of growth the software will grow faster um but we're very very excited about the uh the financing your way Revenue trailing it and is are they Profits both profitable uh the finance company is extremely profitable form Piper is not currently just due to development uh we're putting into our third iteration um that will launch at the end of March and the great news is once that's done we're going to be able to move to more of a just a a maintenance mode for both of our development teams how many folks are on the team total so we have me and my business partner Ryan so two uh Founders two salespeople and then uh we started with our social network MD team we had our developer on staff uh so we were able to build that mvp product very very economically and since then that developer um has gone out started his own company and so now we have four outsourced developers on that team that we're able to use so we can scale the product faster so eight total four full-time four part-time those four parttime are Engineers you've outsourced that's correct that's where did you where where you outsourced to at curiosity um maker software is the name of their company oh it's like an agency I'd say you know he was our employee and and he had friends that were developers and he was looking at an opportunity outside of ours as well so he said you know I'm going to start my own company and wanted to know if we'd become a client we saw the benefits of having him and the additional team members and so uh we were proud to be his first client and hope his company grows and succeeds from there so yep you s like a pretty sharp business guy I'm curious you're not looking to sell the company correct no not right now no yeah so cool so removing that from the equation when you put your rational sort of hat on what would you sort of rationally value this business at today uh well when looking at the p&l you know it drops about 50 to 60% profit you know to the bottom line uh so it it definitely provides a very nice lifestyle um for the team um just looking at what other people do you know a six times multiplier so would it be I don't know about 4 $4.8 million on IA yeah yep yep super interesting what do you choose to do I mean a lot of Founders you know you're unique and I I like this aspect of what you're doing you know a lot of Founders think they have to burn Capital never make money you're making money it's like a real business which we love but how do you choose how to sort of make Capital allocation decisions so if you and your partner are splitting 50 $60,000 in free cash flow per month from profits what do you choose to do with it don't you say well wait I probably just put this back in the business because the business is my best ATM right now yeah we we battle with that you know we like to have the money coming out for lifestyle reasons but we're definitely at the point where we're investing a lot of money back into the business now um you know when we were just running the finance company uh our margins uh our return on investment for marketing was not there uh because it really took a lot of time to build that customer up to actually see the the return with the software you know when you close the deal you close the check right so you're you're increasing that Revenue so now we've got models for scaling marketing we're working with some great companies we we're launching with web profits next month uh so yeah we're ready to just really throw some fuel on the fire now that we have the software product to help us speaking of that fuel I mean Customer acquisition cost what's your fully wayed CA to get into $200 a month customer um I'll be honest I haven't I haven't put those numbers together yet you just know you're making money and and whatever else happens happens right exactly we're going to allocate a certain percent to marketing and we're just going to start running see where we're winning see where we're losing and then we'll just you know shift when we need to right on that note let's wrap up with the famous five number one favorite Business book uh I find the my favorite book is usually the last one I read Because I can apply you know to it so the Happiness Advantage no number two is there a CEO you're following or studying right now because I'm in the SAS and trying to learn it it's new for me so I'm really following a lot of Dan Martell's content really appreciate his content he's great we love Dan Martell number three what's your favorite online tool for building the business for me it's the the Google Suite uh for my team it's HubSpot number four how many hours of sleep you get every night eight every night eight love that and number four sorry what's your situation married single kids uh married no kids no kids okay how old are you 41 41 last question what's something you wishing knew when you were 20 get into the SAS business guys there you have it form piper.com helping retail locations like Petland locations Finance customers when they come in and purchase for you know 3,000 bucks they have a software business they sell to Petland directly so that the retailer pays a fee to use the product and they also have financing product which processed over two hundred million do in loans or gmv last year they take one to two% cut of that it's doing 120 130 Grand a month in Revenue uh with really healthy margins the combined entity doing 50 to 60% profit margins totally bootstrapped they look to continue to scale with some paid spend this year Brad thanks for taking us to to the top all right we appreciate it it's nice joining you one more thing before you go we have a brand new show every Thursday at 1M Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares backend 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 1 p.m. central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2 p.m. 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 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