How LMS 365 CEO Rasmus Holst grew LMS 365 to $40M revenue and 2K customers in 2024.

guys LMS 365 launched in 2003 as a side project by dentist at a local library they finally said well this can be sass in uh in 2016 they broke a million Revenue in 2018 today over 30 million bucks in terms of run rate up from C 18 million a year ago so caught 50% year-over-year growth they're serving 2,000 paying customers they help those customers be more productive in the micro Microsoft ecosystem those customers have over 2 million seats on the platform as Rasmus continues to scale he joined the company as CEO two years ago did a 20 million series a at a 5 to six X multiple he's now growing here with a team of 260 engineers and 14 sales hubs attacking each geography we'll see what they do next hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview hey folks my guest today is Rasmus Holtz he is the chief executive officer at LMS 365 launched it a little over 2 years ago based in Denmark before that he was C at a group called wire for over four years and before that CEO at a group called hudle we'll jump into LMS today Rasmus you ready to take to the top absolutely good good that you want to have me here Nathan I'm ready I'm excited to have you you know it's so hard to get employee performance management right you have all these sort of uh personality tests and you have people that try and build software for it how do you f into this space um we historically come out of a learning background um so this me that actually for longer than I've been here we've been building a learning management platform uh build into Microsoft teams because we believe that learning should be where you actually meet where you at every day but then as we kind of grow with that ambition we don't just want to provide learning so essentially what we've done is we've elevated the way we think about the platform to human success and then you'll ask what's human success it's basically performance it's engagement it's learning it's your skills all underpinned by AI and note that I deliberately use the word success rather than human resource because what we really believe is happening here is you used to have a customer support type of of team that dealt with customer support but it became customer success and it became Centric to the organization how you actually dealt with that and we feel like people is almost the same like why do you want to be a human resource I should actually as a CEO invest in your success whether you're successful here or in the next company you start started by reading out a couple of companies I've been at the my journey to here should be successes maybe not all successes because will not all be successful at everything we do but successes along the way that bring you along the journey and allows you to move further and further up the rank so that's how we think about the product that's how we think about it and we actually think there's a category to be created for human success compliance training Microsoft 365 adoption tracking and Reporting these are some of the solutions that you guys offer now the company was launched all the way back in 2003 I believe and you joined a CEO more recently we'll jump into that story first but give me a sense today can you tell me a customer story uh and give me a sense of what on average a customer is paying you to use your full platform per year yeah uh our core Market is core to uper mid market so 250 to two and a half thousand users often traditional industry so often manufacturing Logistics Health Care Financial Services Services Industries those types of things so typically people with a strong Microsoft install base and they typically pay us around 15,000 for a solution that's the average we did do last per year and and one of just to be clear on that Ras sorry if someone's paying you $115,000 per year how many seats are they likely paying for a couple hundred yeah in the in the three 400s 300s okay um and then one of the growth uh pieces that we put in place here is that last year at the end of the year we acquired weekly 10 so we basically acquired we set up up the human success narrative and acquired into that by acquiring an engagement performance platform we 10 out of rexim so essentially what we did was to buy our way into building a broader platform but obviously also with the with the view that we can scale more broadly uh and get a bigger share of wallets with uh with our customers at the stands today because we can see the market is consolidating uh you want to offer more to the clients that you have uh so that it becomes a sweet more than a single trick pony that you're offering MH uh tech.eu reported that quote Danish learning platform LMS 365 is buys weekly 10 for 4.5 million euros was that correct yeah that's that's in that range it was bought half in cash and half in share so the numers is there thereabouts yes I love seeing a company you know look this is this is an American host and a European founder but so many times when I talk to Europeans they just feel like they don't want to talk about as numbers and be as aggressive as their American counterpart CEO so I love that you guys were aggressive you went out and got this deal done what feedback do you have for maybe other CEOs based in Denmark or Sweden or the EUR European looking to be aggressive with m&a remember I am I'm I am Danish by origin but I spent seven years of my life in San Francisco I work with Robin I I work with I work with Robin Daniels on a daily basis he spent 20 years of his life in Silicon Valley and I work with Henrik jebber he spent 10 years of his life in Silicon Valley so there is a bit of DNA and I will say it's a great question because I've often been been invited to uh ask answer that question actually at the the Danish Embassy in Silicon Valley when you had found us come over and I still play a part in that also in the sassist community where we will meet next week um and trying to say hey often we are a little bit timid there's a little bit of a glass ceiling in in the nordics we're super good at longevity building businesses but the burst and the window of opportunity that that Americans see and that they they cherish and hey I have the opportunity now we often forget here and thereby it becomes more of a long stable growth rather than these burst Sprints that you're able to do with the with the US and also I think perspective on that is failure in the US is a different kind of Beast if you're taking off the football team as wide receiver and you have to go to junior varsity and try come back to Varsity you celebrated more if you make it back to varsity because you endure it you fought you got back in Europe it's especially in the nordics it's a lot like hey you failed and that's a stigma more than it is an opportunity to come back and get better and I know that Nathan took my spot as wide receiver I want that back I I I'll fight for it and and and that mentality we can we can apply a little bit a lot more in the nordics to to to compete with our us counterparts we're running on yeah sorry about that R Miss I said we're running short on time here but I do want to talk about capitalization for a second because I believe if I'm wrong here that when you joined the company was bootstrapped and then you guys did a series a in April last year is that correct and if so how much was a series a for the series a was 20 million so it was actually under the premise that we have an a world-class cash flow engine uh when you sell to Microsoft customers they used to paying up front uh so that made us bootstrapped all the way up to $8 million ra yeah of ARR I should say you hit that you hit 18 million last year 18 we hit 18 million in in 2020 uh early 2023 and we came out last year with about 30 million oh wow wow okay so you grew Almost 100% uh ah 50% we ended sh shy of the 20 Mark and ended at 30 so around 50% growth Mark I got it I was 15 15 million to 30 I gu was going to give you the 100% number but 50% year year is good too around around the 30 million Mark and 50% growth was last year for us um but yeah we did it under the the um the belief that we could actually while everyone was struggling with 2021 valuations by taking in more Capital we would be able to grow faster through this and if you look at our publicly traded uh competitors like get to CH or Cornerstone we certainly outgrew them uh and obviously we also wanted to to be part of this consolidator play we didn't want to be Consolidated and just get bored we actually wanted to to create the category of human success because we do believe we have a a...