How Pinata CEO Lily Liu grew Pinata to $8.8M revenue and 600 customers in 2024.

hey folks my guest today is lily liu she is pioneered using tech to modernize real estate in government after a tenure in mayor bloomberg's office and founding gov tech startup public stuff she's now revolutionizing rent with prop tech company pinata that's pinata.ai lily you ready to take the top i am thanks for having me so why does uh why does rent need to be revolutionized based off what you learned at the mayor's office you know rent is a pretty antiquated industry you know renters don't get anything back for their on time and in full rent payments you know unfortunately with each on-time rent payment you're not building credit you're not building points you're not getting anything back for that good renter behavior and so we're really flipping the model and saying hey renters should be building credit that should be reflected on their credit reports and they should be getting more back when it comes to everyday savings cash back points etc i think you have to convince property managers to be your distribution channel here why would property managers want their renters to use pinata you know for property management companies it's a it's very much both a transaction every single month but it's also a service they're in the industry of essentially hospitality right providing a great living experience for their renters and building that relationship so come time to renew your lease you actually have a good reason to point to not only have you taken care of maintenance issues which we think of as a baseline but now you're providing rewards you're providing a reason for them to renew so they can activate additional points we call them pinata cash and you can get more back when it comes to cash back perks rewards and other things that renters can redeem on in the marketplace we also have something called custom incentives for property management companies because there's a whole slew of other things that these groups want their renters to do things like maintaining your unit referring other friends reviewing folks in social media renewing your lease even things like activating your smart home devices groups are making investments into these smart tech gadgets in the home but it's not very good if the renters aren't activating the accounts and actually triggering it so that the data feed goes back to the property management companies so is this how you make money you're charging the property managers here so we actually have a multi-sided marketplace we make money from property management companies that pay us a recurring subscription fee monthly we also make money from a small amount of money from brands participating on the platform so these are brands that are providing our renters usually something for free or at a rate that you can't see elsewhere online and what they're doing is not only giving that to our renters but we also generate some percentage of that revenue as well and so what i mean i see starbucks amazon target taskrabbit in your ui and on your website these are examples of brands on the platform that's right those are some of our popular brands and it comes in all forms and sizes we have gift cards we have cash back we have actual gifts and merchandise and so you know many of these are limited edition so we'll expose you know 10 20 50 units of a particular device that you can get if you come into the app in time and and then we have everyday savings so this is at gas stations grocery stores that you can actually get discounts okay but i guess so two revenue streams property managers pay sas brands participate in the platform you said the brands there was a small portion of your revenue are we talking like understanding yeah it really depends on the brand but yeah that's right usually under 10 okay but of your total revenue under 10 percent you'd say comes from brands a little more than 10 a little more closer to about 20. yeah so is that growing is your intent to grow that or are you phasing that out no our intent is to grow that we actually uh we're projecting that in future years that revenue stream actually increases as we have more renters and they're more users on the platform making more transactions we're going to generate more revenue and hopefully even bigger brands that are giving us a better cpa i see okay so then the other 80 comes from the property managers that's right oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview i love this okay very interesting so i guess give me a little bit if there's property managers listening today right and they're going man i'd love to use this or maybe there's a lot of investors on our show that run maybe 12 24 unit apartment complexes right and they're thinking potentially they love to use this what might they pay great question so it starts at a dollar per unit per month now that price will vary based on the actual product offering that they want to expose to their renters and the unit size so if you're a mom and pop like myself and you have under 20 units you're not going to get a much better rate than that although we think it's pretty good based on the value that your renters are getting if you're a very large um group with tens of thousands of units the price will look different i see so the so a group with you know 30 000 units on your platform they could get under a dollar per unit correct i see yeah i see but the most expensive is a dollar per unit per month uh that's right and that's the many of our groups that fall under around uh 2000 units are at that price i see okay very cool give me the back story here you have an interesting history when did you launch the business you know we actually launched it right as cobit picked up in early 2020 and you know one of the one of the things that i've always been a renter on and off throughout my adult life and so now that's almost two decades of dating myself and uh you know the first time i remember the first time i went to apply for a home loan i realized that i only had one credit card and i had not been building credit and didn't realize the weight that that would carry under a you know home loan application and um and i also realized that nearly a decade of my on-time rent payments were not reflected and so i remember trying to pull information to show that hey look i'm i'm actually i pay my bills right and this is my biggest bill every month it didn't account for anything and so uh really it was born out of the inspiration of really trying to allow folks that are early in building their credit to have that avenue to build credit but also folks at what we call credit invisible where they may not even be scored yet and as a credit repair facility it's a little bit harder but really that's that's one of the big reasons why we started pinata it was that and then also building uh the ability to get something back right that brands have things that are valuable for renters and their move in live in and move out experiences so how can we support them on that journey for every day discounts rewards perks and during covet it really helped us to narrow in even tighter...