Penny Software Revenue, Valuation & Funding (2024)

Penny Software reported annualized revenue of approximately $1.2M as of early 2022, up from roughly $48K in 2021, representing a dramatic year-over-year increase driven by moving from a single paying customer to tens of active paying accounts.

Penny Software had one paying customer in 2021. By early 2022, the company had grown to tens of paying customers, with Ibrahim characterizing the count as toward the upper end of that range when pressed by Latka. The company's stated target was to surpass 100 paying customers by the end of 2022.

The platform targets procurement departments at medium to large enterprises, with typical user counts per customer ranging from 20 to 100 users. The standard per-seat license is priced at $1,000 per user per year. At 20 users per account, that implies an average contract value of approximately $20,000 per year, a figure Ibrahim confirmed as applicable to the company's most recently acquired customers. Early design partner customers received discounted pricing, which Ibrahim noted pulled the blended average below the $20,000 figure.

The company also offers a revenue-share pricing model on procurement spend, with take rates ranging from 0.5% to 15% depending on the industry, and an average take rate of 7% to 10%.

Penny Software operates two primary revenue streams. The first is a per-seat SaaS license priced at $1,000 per user per year, sold to procurement teams at medium to large enterprises. The second is a revenue-share model in which the company takes a percentage of the procurement spend it helps manage, with rates ranging from 0.5% to 15% and an average of 7% to 10%.

At a typical account size of 20 to 100 users paying $1,000 per seat, the average contract value for the SaaS component is approximately $20,000 per year at the low end of the user range. Ibrahim confirmed this figure as representative of recently acquired customers, while noting that early design partners received discounted terms. The B2B marketplace, which allows companies to list and purchase products from other businesses, was still in an offline build-out phase as of March 2022 and had not yet been fully commercialized.

Gross margin, burn rate, runway, churn, retention, LTV, CAC, and profitability were not discussed in the interview.

Penny Software employed 25 people full time as of March 2022, spanning technology, business development, sales, and supporting functions. Of those 25, approximately 13 were in the technology organization, covering software developers, data engineers, QA, and DevOps roles.

All five co-founders converted to full-time status following the close of the $5M seed round. The company indicated plans to grow both the engineering team and overall headcount as it deployed the new capital.