How Realync Reached $5M ARR and 150 Enterprise Clients with a Flat-Fee Virtual Leasing Platform (Interview with Co-Founder and CEO Matt Weirich)

Introduction and Company Overview

Nathan Latka

00:00Hello, My guest today is Matt Weirich. He's the co founder and CEO of Realync. Having founded the company over nine years ago, Matt's on a mission to make multifamily touring, leasing, and communication real and transparent. With their video leasing solution, the company has helped teams all across The United States increase their lead to lease conversion rates and decrease sales cycles. The company has partnered with many of the nation's largest property owners and managers and is actively

00:22being used in over 220,000 units today. The company's multifamily leading virtual leasing and resident engagement platform enables live video tours, live virtual open houses, and do it yourself prerecorded videos of properties. Matt, you're ready to take us to the top?

Matt Weirich

00:38>> Absolutely. Excited to be here, Nathan.

Origin Story and Founding Inspiration

Nathan Latka

00:40This sounds like something a frustrated realtor who took some Python classes in college would build. Is that the case?

Matt Weirich

00:46>> Not quite, no. So I actually don't have a formal background in real estate or anything like that. It was more of the consumer pain point that drove me to start the business. I was moving from Purdue University up to Chicago, about a two to three hour drive, not terribly far, but it was that real estate search process back in 2011 that really opened my eyes to how inefficient the real estate search process was. And

01:17>> May 2011 was actually when FaceTime came out and was just a light bulb moment of putting different things together about what could have been done to streamline that search process for me. And so, yeah, it was a perfect storm of different circumstances coming together and led to an opportunity that here we are ten years later working on the B2B SaaS side of it instead of the consumer side of it and hopefully making a big difference to

01:44>> the industry. Who who

Who Pays and How the Platform Works

Nathan Latka

01:46is the business paying? Is it the agent? Is it somebody else? The brokerage?

Matt Weirich

01:49>> Yeah. So we're actually multifamily focused. So we're we're working with large multifamily owners, managers, and developers of apartment communities, student living, senior living, even military installations, and things like that. And so it's the on-site teams, the property management teams, the leasing teams that are using our platform today. And they're using it to streamline the touring experience in that lead to leads part of the funnel to connect with prospects and consumers in a in a more efficient

02:17>> and transparent way.

Pricing Model: Flat Fee Per Property

Nathan Latka

02:18And what are these folks typically paying to you know, for you to use the platform, and how do you upsell? Is it purely based off number of units?

Matt Weirich

02:26>> Yes. We actually are a flat fee per property. A lot of the prop tech companies hitting multifamily are charging on a per unit basis. It makes it more affordable for smaller properties, but significantly more expensive for the larger properties. And a lot of our clients are those larger two fifty unit and larger buildings. And so to make it an efficient, easy to implement platform for them, we just charge a flat monthly fee per property. And there

02:55>> are upsell opportunities, additional functionality that they can pay for, services that they can opt in for and things like that as well.

Nathan Latka

03:02And so what is that average price point per property?

Matt Weirich

03:05>> Yeah. So the average price point for Realync is right around that $325 per month, and that's unlimited live video tours, prerecorded video tours, cloud storage integrations, all of that. Interesting.

Nathan Latka

03:16So you're not upselling this, like, number of tours and anything like that. It's really number of units. And and is there any other utility based upsell, number of seats at the leasing agency or the multifamily owner?

Matt Weirich

03:26>> So there's functionality internally with being able to download the videos and some different integration points and things like that that we're upselling on. Those are, like, feature based upsells.

Nathan Latka

03:37Are there any other utility based upsells, like number of x?

Matt Weirich

03:40>> No. So we early on when we launched our company, we actually charged based on usage. And what we found very quickly was that the only result that drove was teams trying to minimize their usage.

Nathan Latka

03:54Less usage. Yeah.

Matt Weirich

03:56>> And as a SaaS platform, you want to maximize usage and ROI on it. And so we we got rid of usage based fees and functionality and really did the math to to make the most sense around what can we do, flat monthly fee, unlimited the usage, and really inspire teams to go all out on virtual leasing.

Units, Properties and Enterprise Client Count

Nathan Latka

04:20Now you shared with us in the bio that you sent me that you already are across 220,000 units, but roll that up one level. How many clients is that?

Matt Weirich

04:27>> Yeah. So we're actually pushing 500,000 units now on the platform, which is great. So rolling that up on a property level, we're around 1,400 individual properties using a platform between The US and The UK.

Nathan Latka

04:43And is that is that like, I imagine one multifamily person paying you on their credit card could manage a 100 properties. I'm trying to get a sense of where the credit card or who the person or the organization is.

Matt Weirich

04:54>> Well, I will say first and foremost, I wish they paid us on a credit card. That is a pain point. A lot of multifamily still physically cuts checks and Oh, wow. A lot of physical checks coming in. But, yeah, when you roll that up to our enterprise clients, we have about a 150 enterprise clients.

Nathan Latka

05:15So, I mean, those are not the levels where it's worth your time to have an inside sales organization run a high touch process because they're paying for so many properties and so many units underneath.

Matt Weirich

05:24>> Exactly. And the great thing about our go to market strategy, we're very much land and expand. So we'll get our foot in the door and launch in three or five properties in the portfolio of 50 and have room to expand within that portfolio and take it from a five property client to a 25 to a 50 property client over time.

Nathan Latka

05:44Potentially much larger. Right? I mean, if you have 500,000 units and and 1,500 properties, I mean, isn't that like 300 or something average units per property that those are these are huge apartment complexes or something.

Matt Weirich

05:55>> They are. Yeah. Our average average property or our average unit count per property, I think, is two eighty or something.

Early History: Founding, MVP and First Pivot

Nathan Latka

06:02Yeah. Yes. These are big. These are big, big. Okay. Interesting. Okay. Very cool. Take us back to day one. So you mentioned your problem in 2011 when the move happened. Did you start coding and building this thing immediately? When did you guys the first line of code?

Matt Weirich

06:15>> Yeah. Definitely didn't. So I actually when I was moving to Chicago, I was starting my career as a consultant at Accenture doing management consulting, and I was on the road for three years straight doing consulting. And so I kind of sat on the idea for a minute and couldn't get out of my mind and couldn't get out of my mind because as a consultant on the road every week for three years straight, I saw that pain

06:40>> point iterated time and time again of not physically being able to be at the property to tour it or physically being there, but cramming it all into a weekend and exhausting yourself over a weekend trying to tour properties. And so it was a pain point I saw reiterated time to time again at Accenture. So finally, I was at a work event and one of my then colleagues, my now co founder, Ani, him and I were talking

07:05>> about what's next, what's life after consulting look like. And he was a part of a startup at Northwestern when he was in college and wanted to do something entrepreneurial. So I pulled the idea out of my back pocket, pitched him on it. The very next weekend, we were in my apartment whiteboarding, laying the foundation.

Nathan Latka

07:20What year did you guys launch that?

Matt Weirich

07:22>> So that was 2013 when we first started scoping and specking out and running focus groups and all of that. And we brought on a chief technology officer along with us because neither of us had extensive background.

Nathan Latka

07:35You have to give them you have to give them equity or you just pay them a lot of money?

Matt Weirich

07:39>> No. Equity. Yep.

Nathan Latka

07:40There's really, like, three of you guys that own the majority of the business.

Matt Weirich

07:43>> Exactly. And then we so we started specing it in 2013, and then we reached our MVP in 2014. 2014.

Nathan Latka

07:50Okay. And then did you get your first customers in 2014?

Matt Weirich

07:55>> You could call them that.

Nathan Latka

07:57Yeah. We had our first people on the platform using it and

Matt Weirich

08:02>> When we first launched, we were actually focused on the residential for sale side of the industry. We were partnering with Coldwell Banker, Keller Williams, Century 21, and brokerages like that working on the for sale side of the industry, but we realized very quickly that was not a B2B go to market strategy. Brokerages did not want to pay for technology for their agents, and so we had to sell agent by agent by agent, and it just

08:26>> was not an easy or feasible go to market strategy for a startup. And so we got our first multifamily client in 2015. And then in 2016, we really made the decision to go all in multifamily, put the residential for sale side behind us and go full steam ahead, and here we are half a million units later.

Nathan Latka

08:48And so were you guys basically pre revenue living off savings in both 2013, 2014 until that multifamily client in 2015?

Matt Weirich

08:56>> Yeah. So we did a friends and family round of funding

09:01>> end of twenty thirteen, I believe it was. Raised 130,000, so very small. About $133.30. Yep. So we made that stretch much longer than it should have, and we didn't do a formal seed round of funding until 2016 when we did a 1,100,000 seed round, so we went a long time off of savings and ramen and really bootstrapping the heck out of it.

Nathan Latka

09:26The 1,100,000 that you guys did,

09:29did you end up quoting on pricing that or do you convertible notes, safe sort of deal?

Matt Weirich

09:33>> Yep. It was a it was a price round.

Nathan Latka

09:34Oh, you did price it. Interesting.

Matt Weirich

09:36>> That'd be cool.

First Multifamily Client and Product-Market Fit

Nathan Latka

09:37Alright. Cool. So so first customers, you thought were gonna come from the Coldwell Bankers of the world. You pivoted in 2015 and said, We're just going direct to multifamily. How did you land that first multifamily customer?

Matt Weirich

09:46>> Thankfully, it was a personal network. Early on, when we were seeking that product market fit, it was annoying amount of networking events and meetings and things like that, but

10:01>> there was a lot of attention on the prop tech space in Chicago at that point when we launched our company in Chicago. And there was an accelerator that was starting in the prop tech space. And there was a multifamily owner who was interested in partnering from an innovation standpoint. And so we sat down with them, launched in three communities early on to just prove out the value proposition. I always say product market fit smacked us in

10:31>> the face. The second we launched into those multifamily communities, the usage went up into the right. The ROI, the use cases, value proposition, everything was abundantly more clear than anything we had captured working with Indeed.

2015 Revenue and Early Milestones

Nathan Latka

10:45And so what does that mean in terms of 2015, your first real, real your real year of revenue? Do you remember how much you did?

Matt Weirich

10:52>> 2015, I wanna say we we did maybe I think it was, like, 60 or 70,000 in revenue.

Nathan Latka

11:00Do you remember the feeling?

Matt Weirich

11:04>> I thought it was a lot. Going from nothing and being able to actually keep the servers on by clients paying us to keep the servers on and things like that felt good.

11:18>> And then, yeah, going from three multifamily properties to 25, hitting that 25 property milestone is huge.

Nathan Latka

11:26What was 25 all year? That was in 2016.

11:30Oh, wow. Okay. Then you're at about one fifty today?

Matt Weirich

11:33>> 150 logos, about 1,400 properties. Yeah.

Nathan Latka

11:38Well, when this is I wanna make sure get the verbiage right. So I so when you say three to 25, are those enterprise clients, properties, units?

Matt Weirich

11:46>> Properties. Yep. So that that 25 was across three or four enterprise clients.

Nathan Latka

11:53Got it. So you sort of went from one enterprise to four enterprises today, 150 enterprises. And then, obviously, you can calculate units and properties against that as well. But just to be clear, the $325 price point you told me earlier, that is per property, not unit or per enterprise. It's per property.

Matt Weirich

12:09>> Correct. Yeah. Right. Yeah. Yeah. I know it's a bit convoluted. Yeah. The the multifamily industry speaks in unit counts, and because we charge per property, we talk in property count, and so a bit convoluted.

Nathan Latka

12:22Well, it's tricky to figure out what to price against. Right? That's why I'm asking. Some people might have probably did built the same business you built and priced against units. Others might do the same thing, but priced against the enterprise, and you said, no. We're gonna do it via property.

Matt Weirich

12:33>> Yep. Exactly.

Nathan Latka

12:35Which is strange because you have such a range. I mean, you mentioned you have people you're onboarding with only five units per property. They're still gonna pay $325 when someone else has 500 units per property, or that's the average?

Matt Weirich

12:45>> So that was again, sorry for any confusion on this. So that was portfolio size. So five properties in a portfolio, but those properties still could be 150, two fifty unit properties.

Nathan Latka

12:57Oh, I see.

Matt Weirich

12:58>> So if if a property is under 100 units, we have custom pricing for them on a per unit basis. So that flat $325 per month is for a 100 unit in larger buildings.

Nathan Latka

13:09I see. I see.

13:10I see. Okay. Can I so can I take $325 a month times 1,500 to back what you're gonna do, like, almost 500,000 in MRR or something like that?

Matt Weirich

13:17>> Yeah. Roughly. Obviously, we have varying price based on discounting per side portfolio and some upsells on different functionality and things like that. But, yeah, we're we're right around that 5,000,000 ARR mark.

Nathan Latka

13:31Feel like you can break the $500,000 a month this year, you think? That'd be a 6,000,000 run rate?

2020 Growth of 400% and COVID Tailwind

Matt Weirich

13:36>> Absolutely. Yeah. We actually had bigger goals than that for this year. So 2020 was quite the year of growth. We grew over 400% in 2020, and we're not looking to repeat 400% growth in 2021, but looking to really ride the tailwind and all the attention on virtual leasing as we settle in as an industry with what this new season looks like of digital plus physical and the combination of everything in between as markets are opening up,

14:06>> properties, leasing centers are opening up and all that. And so just to capture the 1% year over year growth from 2019 to 2020, what was the growth in 2020 to 2021? You're doing $400,000 a month today.

Nathan Latka

14:17What were you doing a year ago?

Matt Weirich

14:19>> So we actually hit 1,000,000 ARR in January 2020, which was a huge milestone for us. And then we ended the year at 4.5 ish, give or take.

Nathan Latka

14:31Holy cow. I mean, that's crazy growth in one year. What happened?

Matt Weirich

14:36>> COVID. Yeah. The second leasing centers shut down because of shelter in place and quarantine and all of that, they had to turn to virtual leasing to keep business running. And they were using our platform offers, do it yourself prerecorded video creation, live video tours, and things like that. So we were perfectly primed and positioned to allow these leasing teams to continue leasing and managing their properties without any physical in person interaction.

Nathan Latka

15:05Wow. Wow. 1,000,000 in 2019,

Matt Weirich

15:07>> 4,500,000 out of 2020. Now today about $5,000,000 to $5,500,000 run rate.

Nathan Latka

15:11What do you think you can finish the year at?

Team Growth: 6 to 35 People

Matt Weirich

15:13>> The goal is eight. So we're we're pushing hard. We've got we've got a good good good trajectory for 2021 and feeling pretty bullish about where we're going as a team. We've more than The crazy thing about it, January 2020, we were a six person team and now we're 35 person team.

Nathan Latka

15:36How many engineers on the team?

Matt Weirich

15:39>> So when we add our engineers in, we were at four, and now we're at

15:45>> 15. 15 engineers out of the out of the 35.

Nathan Latka

15:47So heavy heavy tech. This isn't a this isn't a tech this isn't someone that's not a tech company client, it's a tech company. You actually do have there's some real tech there.

Matt Weirich

15:55>> Yeah.

Sales Team, Quotas and Sales Org Build-Out

Nathan Latka

15:56How how many sales reps that carry a quota?

Matt Weirich

15:58>> So now we're at six. I used to be one third of our sales team, so it feels good to have a sales team beyond myself.

Nathan Latka

16:05What did you set this is

16:07always a tricky question for SaaS founders. What did you set the quota for your first sales hire that wasn't you, the founder?

Matt Weirich

16:15>> It was so the her first quarter, we were very flexible on it. We set goals, but not necessarily a quota. We wanted to see what she could do stepping in. We transitioned some of our accounts over to her so that she could farm and work on growth of those enterprise accounts. And then from there, we really based it off of realistic activity levels and what we think they could produce on a quarter over quarter basis. We,

16:45>> so far, all the reps that have joined the company, we've handed them a book of existing enterprise clients to grow that business. And so we're trying to set them up for good, quick win success, getting their feet wet. And so we've really settled a goal quota of around 180 properties per quarter, give or take.

Nathan Latka

17:06What does that mean in terms of new ARR per quarter per rep?

Matt Weirich

17:09>> Per rep. So if they're adding 180 properties, rough math, we could expect them to do about 600,000 ARR?

Nathan Latka

17:20A quarter. Yeah, that's aggressive. So you basically have a quota target of 2,400,000 of new ARR per rep per year.

Matt Weirich

17:30>> Aggressive.

Nathan Latka

17:31Yeah. But I mean, if you can make it work, that's free. I mean, typically the ratios you see there are something related, know, it's about a million dollar quota target with a full OTE of $200,000 or something like that.

Matt Weirich

17:40>> Right. Exactly.

17:43>> And and this is the first year. We're feeling it out. We're shooting for the moon, and we definitely recognize there'll be some settling in with the new team and sales org. We brought on a heavy hitting industry leader, Christy Picker, to come on and lead the sales org. She's been in the multifamily space for twenty plus years and knows it inside and out. So making a lot of shifts, a lot of changes as we settled into

18:07>> having a sales org.

Expansion Revenue and Gross Churn

Matt Weirich

18:10>> It's one of those things, the land and expand, the farming, and that growth for us has typically made up about 75 to 80% of our sales. So expansion revenue is 80% year over year.

Nathan Latka

18:24Exactly.

Matt Weirich

18:25>> And so early.

Nathan Latka

18:26I'll find those early numbers obviously are easier, but 80% expansion is great. What's gross revenue churn?

Matt Weirich

18:32>> So very low. Thankfully, we're at less than 10% annual.

Nathan Latka

18:37That's great. So net your your net dollar retention is gonna be like one fifty, one sixty right now?

Matt Weirich

18:41>> Yep. Exactly. Yeah.

Susquehanna Growth Equity Transaction and Valuation

Nathan Latka

18:42That's great. Hey. Look. We're out of time, but I wanna capture quick other quick questions here. Are you still building all this capital efficient on the just the last 1.1 raise or did you raise more?

Matt Weirich

18:50>> So we did a $22,000,000 round with Susquehanna Growth Equity this past fall. We didn't put a full 22,000,000 on the cap table. We did some cap table cleanup, liquidity event, things like that for some of the prior investors, but big equity partner, and we're very excited about what they need for the business.

Nathan Latka

19:07How much of the 22,000,000 was secondary?

Matt Weirich

19:12>> Secondary meaning?

Nathan Latka

19:14It didn't go on the balance sheet, didn't go to operations. In other words, early employees who get a little off the table, you could take some off the table, early investors took some off the table.

Matt Weirich

19:21>> Gotcha. Gotcha. So out of the 22,000,000 valuation, secondary was probably, call it two thirds.

Nathan Latka

19:30Oh, wait. Sorry. The 22,000,000 is the cash you raised or the valuation you raised at?

Matt Weirich

19:34>> Valuation. Yeah. So

Nathan Latka

19:36Oh, okay. Sorry. How much did you raise?

Matt Weirich

19:41>> About 16 out of 22.

Nathan Latka

19:43Oh, wow. You wow. You you decided I mean, wait. Why did you decide so early? I mean, you basically did a majority sale of the business.

Matt Weirich

19:51>> It was

19:54>> It was a very interesting year to say the least. Without diving into too much confidential information, we had a lot of strategics knocking on the door. We had a lot of M and A conversations going on. And there was a lot of range of interest ranging from doing a series A to minority growth equity, majority growth equity, and full strategic acquisition. And

20:24>> ultimately, at the end of the day, we went with the partner that gave us the most confidence in partnering with us to get where we believe the company can go.

Nathan Latka

20:32And so The 10,000,000 of 16 was basically secondary. You guys got some early cash out, which is great. Create a win. But a $22,000,000 valuation for your growth rate, that's super low. I mean, 1,000,000 to 4,000,000 in twelve month period, and and then you go raise that only a five like some I'm I'm I'm missing something here?

Matt Weirich

20:50>> That was actually the high end of the valuations that we were getting in the thick of it, obviously. So we did that round. We closed it in October of last year. So we weren't at 4.5 yet at that point. And they were really basing it off of the growth indicators. For a lot of underwriting of those deals, need to see those historic trends of quarter over quarter growth. And we had two quarters of insane growth, but

21:22>> it was two quarters of momentum. And so there was that risk factor that they were trying to take into consideration. And we definitely could have wrote it out, waited another couple of quarters for additional proof points. But we found a partner that we believe in with successful.

Nathan Latka

21:41I know you make a lot of money selling too early or selling a chunk of it too early, so there's nothing wrong with that, but the rationale is helpful. Guys, there you have it. Matt Weirich built a Realync after he had his own issues back in 2011 moving. It's a virtual tool that allows folks like brokerages, agencies, multifamily owners to give virtual leasing tours. They've grown crazy. A million bucks in 2019 run rate, 4.5, end of

22:03last year, million today.

22:06They took in $16,000,000 on a $22,000,000 valuation in 2020, so a big secondary chunk there, but now they're primed for growth with the partner they like. We'll see what happens next, Matt. Thanks for taking us to the top.

Matt Weirich

22:15>> Thank you so much, Nathan. Appreciate it.

Nathan Latka

22:18One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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, one

22:42p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two 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 SaaS world, whether it's

23:02an 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 wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You wanna 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

23:24saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And 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

23:42those people. We gotta push them away. Click the thumbs up below to counter them and know that I appreciate your guys' support. Alright. I'll be in the comments. See you.