Growth Stack Inc Revenue (2024)

Growth Stack was tracking approximately $1.2 million in annualized recurring revenue as of mid-2021, with Petersen telling Latka the portfolio was "just north of $100,000 MRR" at the time of the interview. The company operated four brands, with Long Tail Pro accounting for more than half of total revenue.

Growth Stack had approximately 20,000 paying customers across its four brands as of July 2021. Petersen told Latka the customer count was "probably 20,000," spread across platforms with meaningfully different price points.

The typical pricing range across the portfolio runs from $79 to $299 per month, with enterprise customers paying $1,000 or more per month. However, one asset in the portfolio carries an average ticket price of approximately $11 per month, which pulls the blended average revenue per customer down to roughly $5 per month when total MRR of $100,000 is divided across 20,000 customers. Petersen acknowledged this dynamic directly, noting that thousands of customers pay around $5 per month while thousands of others pay significantly more.

Growth Stack operates as a buy-and-build SaaS holding company. The firm acquires B2B SaaS businesses, applies marketing and sales fundamentals, and seeks to grow revenue before eventually rolling the portfolio into a public market vehicle. Petersen described the acquisition thesis as targeting companies producing between $1.5 million and $7 million in EBITDA at the time of purchase, with deal pricing in the 4.5x to 6.5x EBITDA range.

The company funds acquisitions through private investor capital. Petersen built four investor portfolios in the 2014 to 2015 period, each ranging from $500,000 to $1,500,000, and paid quarterly dividends of 13% to 22%. As of July 2021, he was actively raising a new fund. The firm also uses opportunity zone legislation to shelter investor capital gains. The long-term exit strategy is valuation arbitrage: buying at 4x to 6x EBITDA and exiting via a public market roll-up at a higher multiple, with a SPAC or direct listing targeted within 30 months of the July 2021 interview.

Long Tail Pro, the portfolio's largest asset, generated approximately $700,000 in revenue in 2020 and produced profits of approximately $200,000, implying a profit margin of roughly 29% for that asset. Gross margin and holding-company-level profitability or burn rate were not discussed in the interview. The Picreel acquisition, purchased for approximately $1 million (roughly 3x ARR on $360,000 in ARR) in late 2015 through broker FE International, which charged a 15% fee that was split between buyer and seller, was sold within the 90 days prior to the July 2021 interview for sub-$500,000. Petersen said the deal was ultimately profitable due to cash flow generated during the holding period, though he acknowledged the better outcome would have been to sell at peak revenue of approximately $600,000 ARR.

Growth Stack had approximately 40 team members across nine countries as of July 2021. Of those, roughly 15 were engineers. Petersen told Latka: "I've got about 40 resources in nine countries."

Approximately 12 of those team members were full-time employees, including a full-time CTO who is originally from India and has been based in the United States for approximately 14 to 15 years. The CTO handles engineering recruitment, drawing on overseas resources as needed. The remainder of the team consists of contractors or part-time resources, many of them based overseas, which Petersen cited as a key factor in managing costs on roughly $1.2 million in annual revenue.