LeagueApps Revenue, Valuation & Funding (2024)

hello everyone my guest today is brian liftback he's the ceo and co-founder of league app he's also a member of the board of directors previously was part of the founding team at sports fight and held various business development roles at cbs sports college sports television and the official college sports network he's a board member of the nyc chapter of positive coaching alliance and is involved in various other sports non-profits brian you ready to take it to the top yup thanks for having me nathan all right so league apps you help folks organize youth sports how are you doing during a pandemic it's the right question to ask uh our business dropped precipitously over a few days in march um and we had no idea what was to happen as much as we scenario plan the idea of a pandemic coming along and wiping out these sports all across the country uh was something we had we could have never planned for a one of our investors mentioned what you do is basically illegal uh in april as we're going back and trying to plan uh what would our future would look like uh thankfully and luckily and you know we are a mission-driven company we saw sports come back and return to play across communities all over the country happen uh in the spring and the summer and even into the fall uh right now that the demand from parents and families to have their kids play sports even as you know school was uncertain uh was was was pretty strong throughout the country uh so now as uh there's another uh uh kind of restriction in local and and state governments around what is allowed uh it's affecting youth sports but but hopefully uh come spring uh people can play in safe comfortable environments and get all the joys and benefits of sports you're a pure sass company correct yes and you mentioned you mentioned investors so let's start there how much have you raised to date yeah we don't disclose the amount we raised but we took a a more traditional bbc series a round in 2015 and have continued to work with those investors and when did you launch the company 2010 okay 2020. nathan i have to i have to admit something here yeah even though uh i i i'm a big fan of your uh of your podcast uh we did not intend to start out as a vertical sas company with integrated payments we just wanted to make better tools for sports organizers and make it easier for them to play yeah so we really didn't even know what a sas company was in 2010 uh we had started as an online community to connect people to play sports together uh especially adults how how big did that community grow to oh a few we would we would get about half a million uh uniques per month i'm trying to remember the metrics and we had uh hundreds of thousands of members uh it was called sports vibe it was like evite for sports and did you use did you use that to get your first customers at league apps yeah and so what are super users in sports fight were sports organizers or directors or people who uh manage programs they were the ones looking for players posting on our message boards uh we would do some sampling offline sampling sponsorship activation with them and we saw that they needed better solutions and better tools to actually do all the hard work to make sports happen within their community so when did you write the first line of code for league apps what year 2010 oh it was 2010. okay got it and did you and sorry you did you raised your first round of financing right at the beginning or you waited we we we had like friends and family and angel investors we had one we kind of came out of that sports by company so that company was starting 2007. in 2010 we really built up league apps it was me and a core group of engineers and my partner and we we had raised friends and family and angel uh rounds up until 2015 with the idea of most vc or institutional investors laughed at it in our face that this was a market a total adjustable market uh that was large enough to attract venture investing and we knew it was we knew that the economy of youth sports was big enough but it took a while to be able to and show enough traction to be able to tell that story in a way that made sense for us to raise a more more uh institutional finance talk to me about what these leagues are paying on average per month to use the software today sure so so we are we are a payments model uh the companies like mind body or shopify even uh are good examples we built our payments platform on top of stripe so for every sports organization they generate most of their revenue when the parent or player pays fees during registration to participate in the league so we've built out the the capabilities to help process those payments but also allow them to collect their registrations and along with that have uh program management schedules messaging mobile apps websites all the tools that they need so brian when you look at total revenue over the past 12 months the split between sas versus percentage gmv on the billing model what's the split in revenue yeah great question so we the way we built our pricing is that we don't we we don't have a sas fee all of the fee is based on the transactions that are processed got it a an organization can use processing fees if they want or they can eat that fee so we're taking a piece of that processing fee keeping it as our as our margin and then paying stripe obviously the credit card or interchange cost so if i use you and i sign up a thousand dollars worth of my thing i mean generally speed up to give the exact number like what range percent are you four percent let's say four percent okay got it so you'll make four you'll make you'll make 40 bucks off me that but that's incred where that's inclusive of credit cards which we don't count as towards our revenue it's just uh it just kind of gets split up into okay and how many how many leagues have processed at least i guess a dollar three over the past year great uh we we have uh 3 000 plus leagues uh on our platform and you consider i mean that's who you call your customer right exactly yeah okay great so okay so about 3 000 leagues and then i mean i guess the other important thing that you measure is just again percent volume through your platform so i mean what does that look like here in 2020 tough year for everybody uh what do you mean by percent volume well you make your money off percent of gmv so so how much gmv went through the platform in 2020 oh our goal is to get our goal this year was to get to billions uh per year uh that was significantly and drastically uh um uh impacted but that's that's where uh we're headed uh we hit it took us nine years to get to a billion total and now we're eager to get to a billion a year and beyond what did you break last year in 2019 a full year with no pandemic uh it's uh we don't disclose that information but we're we're growing 50 plus every year and you know that number that we want to get to of run rate over a billion is within our sites without a pandemic okay so if you grow 50 from this year into 2021 end of 2021 you'll pass a billion in terms of gmb sure and we believe exactly and we believe this is a 15 billion dollar market of transactions for team sports in the us which parents and and players pay to their organizations got it if growing fifty percent year over year from today will get you to a billion dollars in gmv processed in 2021 that means you're doing something like 750 million bucks in gmv over the past 12 months you're the sas expert we're not disclosing information but those are the types of uh logic and math that we use yes sir brian i'm only using your numbers you just said 50 year over year growth and if you hit that over the next 12 months you'll hit a billion and i mean those are two numbers you said i don't want to make any numbers up are those accuracy we don't disclose gmv okay but you i'm not you just disclosed 50 year over year growth would mean you hit a billion in gmv next year is that accurate uh i said two things we're growing 50 percent plus and that's the trajectory that we want to continue to and i said that we uh our goal is to get to a billion dollar plus run rate and transactions and i followed up a minute 6 28 in the interview if people go back a little bit and ask specifically if you follow that growth rate will you break a billion next year and your answer was yes it's well within our site sure i just want to make sure that you feel that i'm not putting numbers in your mouth i just want to make sure i heard you correctly uh you're you're you're asking me what i asked you about a minute and 45 seconds ago do you think you know if you grow at the 50 that you're targeting over the next 12 months will you break a billion in gmv next year and your answer was yes it's well within our sites okay so then i just clarify that right so is that not accurate the two the two things i'm saying is our plan is to grow 50 plus and we want to get to a billion in run rate next year and you think you said you feel like you can easily do that next year that feels like you can do that next year yes it doesn't that is that is got it so growing 50 and hitting a billion by the end of next year would mean today 750 million times 50 growth gets you to 1 billion gmb that's how i did the math that's not that far off there okay okay covet implications to it but yeah if you broke if you divided that by 12 and looked at it a month that's very close to where well regardless it's impressive so like let's move on to that for from that are you is this all gonna are you gonna edit this out no this is like we do three thousand interviews all live so let's keep moving let's move on okay so so what you're why are you honing in on this well because that's how you make money that's your business model is gmvs of course that's what i'm going to ask about is gmv especially when you say you you already threw out numbers you said you passed a billion in gmv and you think you'll do a billion just next year alone that's of course if you're going to throw those numbers i'm going to ask those questions yep okay i mean that's fair right yeah it's fair it's fair and we're excited to get to 100 million plus in monthly gm in monthly gmv and go beyond that yeah i know that that would obviously be amazing how so how are you driving growth how are you drawing growth during covet is it still from sports fight in the community or do you have partners or what's the acquisition model today so so sports fight we sunset it's it's fully the the league apps business uh growth comes by forming partnerships with new organizations since our pricing model is not one that's predicated on transactions or our upfront fees or monthly fees we've been very supportive of our partners they can they can uh there's really very little cost there's a very small service fee to get going but they can uh only will pay us when they're collecting their fees so we've been able to form a lot of partnerships we just had a conference around how to around community around impact around how do we help organizations with professional skills we've helped them get ppp loans we've helped them throughout the year a sports organizer someone who has tremendous amount of passion and our ability to help drive their not just their business goals but their mission of what they want to do in their communities a big part of what we do so we're forming partnerships we're being judicious around you know who we partner with there's a shift in the market right now but we think that this is a a a little blip and that sports will come back stronger and more important to communities than ever before so that's where some of those transaction numbers have been greatly affected but uh our modeling and the things that we've seen and some of the pickup in the fall give us a lot of confidence that we'll keep on marching you know after talk talk to me talk to me a little bit about your team today how many folks are on the team sure we have about 90 people in our in a full-time people in our company uh we're remote right now but our office was based in new york city that's split between obviously product and engineering sales and marketing uh and then all the kind of other functions that a typical software company uh has we have a community unit and we have we're investing more and more into impact so there's some things that i think are unique but uh we look at ourselves and then we look at companies like shopify and mind body and other vertical sas platforms as great examples of how they've scaled or how they kind of continue to grow beyond what i think at the beginning people thought that tmv how many engineers do you have uh we have about 15. okay 15. got it interesting and do you i mean is this some is this a go to market motion where you can uh bring in sort of aggressive reps and have them go try and meet quota or is the price point that's how that's how we start we started with uh inside sales having people who have passion for sports calling sports organizations getting all the this fragmented data of leads so we started that way we're going much more to a a marketing driven approach where we're putting out better content and community and engaging with sports organizations referrals is actually a big one too and then going more inbound where then our our sales team is more uh taking the interest and turning it into partnerships how many quarter carrying reps do you have today if any uh oh we have a um we have sdr's and and then closers and we continuously like adjust but we have a sales team of 20. okay and they all have a quota uh the sdr's quota is more about scheduling appointments yeah how many days how many just closer with quota yeah we we've we've changed the model up but before covet started it was about eight i see i see interesting okay and i guess sort of last thing before we wrap up with the famous so i've obviously churn in any payments driven business right which is really usage based or or assassins is really really critical right so going through something like the pandemic obviously you don't want to just measure churn regularly because this is a huge anomaly how do you think about churn in terms of a leading indicator for where you want to take the business yeah we've had to do a lot with that with data so one thing uh that we looked at is what are organizations that are on pause versus what are organizations that are ceased to exist and then what are organizations that left our platform uh to but are still continuing to operate so we went deep into figuring out what are in those three buckets right the on pause idea and the death idea never really was as prevalent but that's something that's really important because of where the landscape is at now right we also look at net revenue retention because uh we have a consumption model and that's kind of driving our revenue so it's not just are they churning it's also like our is an organization going to shrink significantly uh we saw very natural growth and are you above 100 net revenue retention today uh that before covid we were we believe we'll be back there it's hard to again calculate we're looking at it month by month but yes we're a company that is is uh above 100 percent never having your attention i believe would be great continue to grow that yeah where were you how far above 100 were you pre-covered so we were we were our goal i think for this year was 115 and i think we were in a great position to reach that goal and that's really without many hard upsells so as we bring more products to market we think there was an opportunity there's a big opportunity to even grow that and what the sas metric that we're most proud of is our lifetime value and our churn number we think an organization when they become a partner the right size and type is going to be on our platform for 20 plus years last question here according to crunchbase you raised about 8.2 million bucks it's public information because you filed form d sure i don't know why i didn't answer that earlier when it's public but do you have any plans to raise additional capital yeah we'll continue we've raised a little bit more than that and we'll continue to raise capital to help fund the growth uh we had a profitable q3 that we were proud of and never congratulations great thank you it did feel good especially after q2 was my biggest loss ever yeah so uh uh we we we've always been thoughtful about how to use capital we like to grow the business with revenue we have big ambitions so where and how to use additional capital uh is is something that uh we're contemplating for 2021 in the future guys there you have it brian lipvak found founded league apps back in 2010 focused hard on scaling today they're making it through kova just fine december 2020 passing a billion dollars in total gmv through the platform with eyes on trying to pass that number in a year next year alone they make money by taking four percent of gmv through the platform as they help support league owners manage everything about the league brian thanks for taking us to the top thank you nathan one more thing before you go we have a brand new show every thursday at 1 pm 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 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 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 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 sas world whether it's an acquisition a big 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 sas 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 up for that at nathan laca.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 we got to push them away click the thumbs up below to counter them and know that i appreciate your guys support all 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