How Leasecake CEO Taj Adhav grew Leasecake to $6.8M revenue and 250 customers in 2024.

hey folks my guest today is taj adhab he spent more than 25 years in technology in business after starting as a big four cpa he managed more than two billion assets for disney development company as an early hire at channel intelligence he helped drive the company to a successful exit to google in 2013 taj you're ready to take us to the top absolutely thank you very much nathan looking forward to what was channel intelligence what were you guys building back then it was a e-commerce data platform that effectively put buy now buttons on manufacturers product pages as the internet and e-commerce was really taking off so uh we literally managed you know billions of of micro transactions and billions of dollars of you know making it easy for consumers to click and find the places they can buy products so were you early enough there to get some equity or no yeah absolutely i was employed number eight um you know when i was a cpa you know at disney i'm like man i need to repot myself and was there cfo then i transitioned into business development i saw the power of software so it was it was good to get in early that's great can you i mean can i ask are we talking like one percent or like 10 percent uh probably like i think by the time the the exit happened you know dilution takes place so you know sub 10 percent but but but enough uh to give me a taste and not enough that that it left me hungry yeah yeah so we can say between sort of one and ten percent something like that right sorry you cut out yeah yeah yeah yeah yeah yeah so that that happened in 2013 and i think that exit price was what was 125 million deal right correct so did you go right into lease cake after that or no no i was i was frankly kind of lost uh did some uh consulting gigs started my own businesses lived in other parts of the planet came back and and uh you know lee's cake was started really kind of over a cup of coffee at a diner uh because you know just was kind of looking for what's my next gig and um and it turns out there was this massive unserved market that uh we've invented we've we've created a whole new category that we're going after um and frankly it's um you know it's kind of based on the this simple idea that everybody in business owns or leases commercial real estate where's the app for that right and so while you know lease cake is this operating system for lease management we're also really an os for location management uh primarily for tenants and and uh of of all different types and sizes so what does this mean if mcdonald's has you know 100 000 locations in the on the east coast they're going to use europe to manage all that real estate or how does that work yeah so uh basically whether you're in the franchise business your corporate uh tenant whether it's retail or office or in private equity uh the use case is you know there there's tools like property management facility management those are traditionally geared for landlords location management is a new domain so in your example whether you're a franchisee or a franchisor with uh say you know thousands of locations the things that matter to you most are are typically the things that can that can potentially blow up and you're not looking uh you know at the details within a commercial real estate lease there are you know 100 different things that could potentially uh trip you up one of the most obvious is missing a renewal option um the others are dates that are specific to um you know when a personal guarantee should expire or do you need to get permission from a landlord to sell your locations all of those kinds of things are really buried in a piece of paper that sits in a drawer that no one looks at until it matters so we've created a cloud-based system that puts all that information in a very easy to use application and provides proactive notifications as well and team collaboration so what are customers paying on average for this technology yeah so we're we're based on a per lease model our average customer has is probably around 10 to 15 000 a month on average as our as our deal size has gotten larger we've seen explosive growth through covid which was frankly surprises the investor community but it doesn't surprise us um so that's that's our average uh deal size and it's an annual licensing fee and it really kind of scales up or down whether you have three locations you know 30 or you know three hundred or three thousand so taj just to be the average customer paying 10 grand a month or 120 grand a year up front nope 10 grand a year that's it that's the ec got it that's not so that's not the rpu that's the acv is 10 grand yep that's correct and we found that this model is a very simple model to understand and because we're we're a network effects play we're an operating system play it's important as as we as we look at these clients and we say you know there's a better way to do this than spreadsheets or judy in the back that's keeping touch i totally get the product it makes complete sense i mean i think the audience totally gets that uh people are rushing to sign up right now but so so when you're charging up a police model someone paying you 10 grand per year how many leases are they probably managing at that price um anywhere between let's say 25 to you know 80 to 100. um like 200 to 500 per lease something like that yep that's right interesting okay cool when did you launch the business what year uh let's see probably beginning at 2018 late 2017 is when we won this global technology award across 58 countries and we said i think we've got a business um so that's when we started and we you know basically shoe strung uh or bootstrapped our way into um you know having a team and and grew it you know that led to our vc round our cbc round in february february of 2021 yeah that's correct how much was that for uh three million it was oversubscribed 3.2 i think was okay and why did you need to raise capital why can you keep bootstrapping well we found that the opportunity was too great for us to kind of nurture this along when you're the first mover you know and you're there to educate a marketplace we had such a substantial lead as our earliest investors really family office insiders with customers over the product so we we felt that you know if you're going to build an operating system you know time is your enemy right you need to have an application that's demands to be on everyone's mobile devices at you know as soon as possible so that's really what we're about and that's the reason we raise the capital so you're going to 20. you get going in 2018 raise some capital this year how many customers are you serving now today about 250 customers represents maybe about a thousand different users in our system and uh you know 10 000 plus locations across the us and other geos now can i multiply 250 customers times that 10 000 acv you're doing about 220 grand a month right now on mrr no that's not the case because uh what we've what we've done is had a a lower price point model we have seen a pretty strong adoption strong enough to have 127 net revenue retention so some of our earlier customers were at a lower price point we're we're now moving them up rather quickly to effectively two to three x what they were originally paying so we've got some legacy customers long story short um and um and we're excited about you know where it can where it can take us so are you guys north of 200 grand a month right now on revenue or do you think you'll break that this year we're we're we're basically at a million in arr we're tracking to be a million in arr um and it's i think it was very important to make make sure it was an affordable price point um it's a totally new domain so we can't just say hey you know it's a fifty thousand dollar you know enterprise sales cycle we typically have a fast sale cycle of anywhere between two days to two months i'd say on average um and these are pretty large operators that are kind of multi-million corporations in and of themselves and if you're doing like 70 grand 80 grand a month today in revenue where were you a year ago do you remember uh yeah we were at probably uh let's say 20 15 grand i'd say no actually even less 10 10 grand 10 yeah so a lot of growth here so you raise the seeds sort of right in the middle of all this growth 3.2 million raised now did you do that on a price round or a safe it was a priced round yeah okay and and what what sort of valuations you go on raise at uh it was a see let's see it was a 12 post so it's 12.2 right now 12 posts and was that the right looking back was that the right price or would you you know could you get higher lower what do you think um i think we got a really fair deal we pushed and we we negotiated a term sheet that was very palatable to to us as founders um uh i think we are you know our initial term she was a little bit lower but i think we found the right number um to make sure that it was kind of a win-win on both sides and it sounds like when you closed that earlier this year what you're probably doing like 40 or 50 grand a month in revenue yes yeah passion running a little less than that we saw this hockey stick happen nathan probably in june um hockey stick happened again you know back in 2020 despite code but certainly with...