How Cents Reached $60M Revenue and $12m Profits in 2025 (Interview with CEO Alex Jekowsky)

Introduction to Cents and the Triple-Threat Platform

Nathan Latka

0:01Hey folks, my guest today is Alex Jakowski. He's the co-founder and CEO of Sense.com, a New York-based all in one software, hardware, and payments platform, Triple Threat. They're built specifically for the laundry industry. These are laundromats, dry cleaners, and multifamily shared laundry rooms. They bundle POS, online ordering, on machine payment hardware with marketing automation and AI customer service all in one, a big vertical SaaS business. Alex, you ready to take us to the top?

Alex Jekowsky

0:27Let's do it. Thanks for having me on.

Why All-in-One from Day One

Nathan Latka

0:29All right. I don't wanna bury the lead, so let's talk about where you currently are, then we'll go get your backstory here. Y I mean you are a triple threat integrating all these things into one. Did you start off in hardware or software or payments, or was it all from day one?

Alex Jekowsky

0:41I mean was all from day one and from ⁓ what we'd like to do. I discovered that hardware is called hardware because it's really hard to build ⁓ and because we do all of it ourselves for the most part. It's not just like an Android tablet you get from China or s and with some enclosure. And so we the idea when we started the company is there's one way to do this if we want to build a multi-billion dollar business. It's not a point solution, it's not just a point of sale, it's not like we have to be the all in one. And the beauty of vertical SAS, right? It's a smaller market, but you should have higher penetration higher penetration. Higher retention and higher attachment rates to all the products you deploy going forward, right? So we we started with the point of sale because software is easier than hardware, from an iteration perspective, from a deployment perspective, from a hiring perspective, from a cost perspective. ⁓ so we started a core product with a point of sale as we were building the hardware. Then we commercialized the hardware in kind of late 2022, early 2023, ⁓ and then realized, damn, this hardware thing really hard. and while we made Yeah, a couple million dollars of sales and we were pouring a lot of money into the effort, realized best way to de-risk and accelerate ⁓ that execution was potentially through MA. And that's what led us to kind of buying a business in 2024 that accelerated a lot of our hardware growth. But it was really to be all things for all of our customers as fast as humanly possible from the get-go.

Nathan Latka

1:59Mm-hmm. Interesting. And you guys can see now today obviously what the site looks like. Hundred forty million Series C announced dive more into that in a second. ⁓ Alex, take us back to day one. When did you guys write the first line of code for the business?

Prior Exit: Ulingo Acquired by Motolabs

Alex Jekowsky

2:10Well, that's that's the it's been a a long journey from that perspective. I always mark like when did I take the first risk of going full time? That was around October, November of twenty twenty. ⁓ twenty nineteen, maybe we started kind of really getting into it. I got into it because I wanted to buy laundromats. ⁓ after I sold my last company, heard I w wanted to open a bar and you meet enough people that own bars who say maybe not the thing to do. ⁓ but yes, I sold my that was

Nathan Latka

2:36Which sale was that? Sorry, you sold Moto?

Alex Jekowsky

2:38I sold ⁓ Ulingo to Motolabs. So Ulingo is a payment system for college campuses. Go to marketplace.vanderbilt.edu, login with your student ID, and we facilitated transactions, whether it's peer-to-peer exchanges, student life organization finance, some meal plans, all that for ⁓ large and small universities. And we were acquired by a company called Motolabs, which is like the the leading mobile application infrastructure for no code app development. It's kind of like Squarespace for enterprise grade mobile apps, and they bought us to be their their kind of payment and commerce engine. So I became senior director of commerce, ran their motor marketplace strategy as we kind of integrated our product into theirs. And during that acquisition, you get an earnout and you're gonna be somewhere for a long time. And they were private equity stage census you excuse me, Ulingo was a a smaller business and scrappy as all hell. And so thought if we're gonna go into this larger PE state, I should probably have some side business that like keeps me going. ⁓ and While it didn't end up being the bar, it was I I was most interested in the launch mat space. The more I learned about it, found stores I wanted to buy. And the more you learn about this industry, the more excited you get, but the more surprised you are of how well it does for the lack of technology. And that's where we decided instead of buying stores, starting to build for them. And so that was probably, you know, 2019 first line of code.

Why Build for Laundromats Instead of Buying Them

Nathan Latka

3:55When my when my producer let me know that you guys had booked on, I got excited because one of the things I do with my fund is it's Shark Tank on the street. And a couple of weeks ago I did an episode with a laundromat and I walked in and was asking them all their questions about revenue and I offered to invest on the spot, but w I asked them what softwares do you love? And they Well, we're looking at Tri Sense right now, et cetera. So I'm like, okay, match. Like Alex has penetration here.

Alex Jekowsky

4:17Match.

Nathan Latka

4:19But but why didn't you end up go r you know, a lot of people in AI right now are saying, What's the AI hedge? Go buy shit AI can't replace. Why didn't you actually go roll up laundromats?

Alex Jekowsky

4:27So one, like I I believe a lot in core competency ⁓ and and indexing on that, number one. But number two, my whole I I didn't I didn't sell my first company to start another. ⁓ I you know, I think Uri Levin from from Waze has asked great quote, fall in love with the problem, not the solution. I think that's generally been my thesis. I don't want to be an entrepreneur or a founder. I just you have ideas that you fall in love with, and that's the byproduct of it. And so When I was looking at buying stores, I was hell bent on buying those stores. I was had LOIs for three locations. I was like all in, biz buy, sell, the whole, the whole nine. It was the function of I have a relatively sizable earnout at a company I j that just acquired my business. Like I need to be able to do this with the least amount of effort possible, knowing that any business takes effort. It's certainly not passive. And so I thought if I put in the right sits, I'm sophisticated enough, I should be able to implement the right systems. That meant I didn't have to go handle a metric ton of quarters. On a monthly basis and ⁓ you know, hire a person to do delivery when there's the gig economy everywhere and not jerry rig a square with paper logs and a toast POS to make so all of that made me realize I don't even know how I could run these stores with the level of technology available. But I fell so deeply in love with the industry and so deeply in love with the opportunity of the fact that there really there was no venture-backed, no growth equity backed, no sophisticated. infrastructure institutional technology infrastructure for these operators because all the money that went into laundry tech was the Uber for laundry. And guess where all the Uber for laundry companies take their laundry to? Local laundromat. You know? ⁓ and so we knew that it was I I knew it was the the cornerstone of these direct-to-consumer venture back businesses, but it got no love because people didn't appreciate the TAM. They thought the op operators weren't sophisticated enough, whatever it might be. And we love to say, boy, were they wrong. ⁓ But yeah, so that's what what led me to actually build the product for the stores, not it wasn't like I wasn't born in a dryer and my parents didn't own laundromats. It wasn't like ⁓ you know, that story.

Nathan Latka

6:27You're an opportunist who works really hard and once you see an opportunity you go you go fast. So interesting. So twenty nineteen you start coding. Now give a you know, give my audience some sense here. How old were you in twenty nineteen?

Alex Jekowsky

6:41⁓ twenty three. Twenty three.

Nathan Latka

6:44Okay. And generally speaking where you're already pretty well off as a twenty three year old from your prior exit.

Alex Jekowsky

6:49I think in context, yeah. I mean I I think in the world of of of where you wanna be in life, no, but maybe amongst my peers, ⁓ it wasn't like I needed I I would continue to need to work, but it's not like I you know, I I I had it cushy, we'll just say.

Age at Founding and Early Background

Nathan Latka

7:04Fair. Okay. So twenty twenty, you really get going. Take us through ⁓ when you got your first paying customer and then the growth tactics to get your first hundred customers.

First Customers: Enterprise First and Door-to-Door Hustle

Alex Jekowsky

7:13Yeah, we were introduced to a large scale operator in New York as kind of our first customer. And most people say don't sign the whale first. You overbuild, you have all these enterprise issues, all this enterprise complexity that the SMB doesn't have. I challenge that by industry because if you're if your first customer is a big enterprise customer, they tend to be invested in your success. And really, this operator gave us their full store and their entire GNA to help us understand what's important. And in our vertical, and I think a lot of SMBs. ⁓ you know, a f a a 73-store operator or a one-store operator are not remarkably different from a store operation standpoint. They just the problems that a one-store operator has compounds meaningfully for the large scale. Now there's definitely the multi-store challenges, ⁓ but we learned a hell of a lot and were able to build a a product that may be a little overbuilt in the beginning, but set the right foundation. I thought this big customer would be enough for us to raise capital. All the feedback I got. From from seed investors early on was prove to me you can pound the pavement and you can sell another five or 10 customers yourself. If you can't do that, I don't understand how you think more capital will get you where you want to be. Fair enough. And that's really what led us. Actually, our our ⁓ product marketing manager came from the first customer that I ⁓ picked up the phone and called. He had a store in Petaluma. I was living in in ⁓ California, ⁓ San Francisco at the time. And I sold him all these products that we hadn't had or or built. and but got him interested, went to his store. Turns out his daughter was looking for an internship and she started with us early on and is still with us five years later. ⁓ but but yeah, it was really pounding the pavement to try to figure out the product market fit. The way I did it was physically walking in the stores or going into the contact form on all the websites if operators had them, or picking up the phone and calling the the the store and trying to figure out if they didn't do delivery. We were building the first ever gig economy integration for delivery. So leveraging Uber, DoorDash. ⁓ et cetera, to build two-way logistics, which had never done been done in the space before. And we saw that as here for a nominal fee, you can add ancillary revenue with no labor, capex, et cetera, to launch delivery and grow your ⁓ grow this small business owners, you know, addressable market. So it was a revenue generation as like the plug to get them be to be interested and usually something that they'd be interested in but hadn't been sold before. And that was the wedge to say, we also have this hardware product we're building and this point of sale, et cetera. And so I sold about five customers that way, all local to me in San Francisco or Marin County. ⁓ and that is kind of what helped us build up, get about 80 total stores. Because the average operator owns, you know, two stores. Over 60% of the industry is owned by multi-store ownership. However, the average operator really only owns two, even though they have a desire to own more, every store they would add would just add cost. And so that's what, again, software can really enable. You can speak to that side. And so lot of that was the discovery to know what's gonna get them interested, even though we know we have less than less features functionality than than maybe their existing tools or or competition.

Revenue Growth from 2021 to 2025

Nathan Latka

10:19Large scale operator twenty twenty, five customers door knocking, hustling, calling twenty twenty-one. Eighty roofs at this point. Do you remember what revenue finished for in twenty twenty one?

Alex Jekowsky

10:30In twenty well, I think we went from basically zero to about seven hundred thousand in twenty twenty-one and then three million, six million, thirty-six, sixty, and then it starts to really ⁓ ramp and scale from there. And so, you know, we've tried to build the business to to have universal optionality in in the direction that we grow ⁓ and what the industry can sustain. We are not, we don't wanna be toast. there's a lot of toast that were similar, but we're not adding fifty thousand rooftops a year. You know, the industry can't sustain that. What we care about is we have 99% customer retention. Like that's the number that we care the most about, both involuntary churn and and and and and normal kind of business related churn. ⁓ 99% retention. Because if you build the right product, you build it the right way, you're transparent, reliable, and communicative to the customer, you know, and you and you have an industry dynamic where it's so stable as an industry, you have these really remarkable ⁓ metrics that facilitate a lot of the growth.

Nathan Latka

11:30Just to tie out that growth story, can you attach years to the dollar figures you just gave me? So seven hundred K twenty twenty one.

Alex Jekowsky

11:34Yeah, twenty one, twenty two, twenty three, twenty four, and twenty five.

Nathan Latka

11:39Okay, so twenty twenty five was thirty six million. What was twenty twenty four?

Alex Jekowsky

11:42Tw twenty twenty four was thirty six, twenty twenty five was sixty. Yeah.

Nathan Latka

11:45I see, I see. Okay, what's the target for an end of year this year? Do have a target?

Alex Jekowsky

11:48You know, ⁓ a hell of a lot more than than last year's. ⁓

Nathan Latka

11:52Can you double? Can you break one hundred twenty by December this year?

Alex Jekowsky

11:56The the way that we look at it is could we? I think it's possible. Does it make sense for our business, our customers, or the industry? That is where I I don't necessarily believe. I think what we want to do is dive deep into the customer needs and focus a well more on on net dollar retention versus just location count growth. And so we've built a business where we can have this durable compounding ⁓ profile, a ruley for a rule of 40 score of, you know, 80 plus. ⁓ on a on a constant basis. I think where you see a lot of tech companies fail is you see this big valuation. They've raised it a billion dollar valuation. They're growing hundreds of percent a year as a you know at 20 million of revenue or something like that. Then they get to 100 million of revenue and then the growth is more like 10%. ⁓ or it's declining from from from a hundred down to 30, down to 20, down to 10. And if the EBITA margin isn't there, you become a zombie where at 120 million dollars of revenue you're worth less than you were at 50. and I think that is the story I try to tell founders where like you can't be obsessed with valuation and and too obsessed with with having this crazy growth because at one point, unless you're some high flying, ridiculous AI business, and even then we are in a very early innings of those growth stories, ⁓ even though they're remarkable. Unless you're one of those businesses, growth will eventually come down. It's just as inevitably as you get bigger. So, how is the business positioned for when growth starts to look like 30 to 40 percent? Where is your EBITDA? What is it costing you? What's your efficiency? What can your market handle? Or is your market not the right one to be able to grow that capacity? But you've sold this growth story. So now you have to enter new markets. And then you have to get more horizontal. Then your existing customers think you're taking the eye off the ball and it kind of goes from there. So our view on growth is being durably compounding as a business with strong efficiency invested in the areas that lead to customer value and success, which sounds like a lot of jargon, but at its core. That is the safest position to be in in a bowl or bear market. that's been our experience.

Net Dollar Retention and Efficiency Philosophy

Nathan Latka

14:01Ninety nine percent retention, but if you're crushing it, going deeper, getting more wallet share from these same operators, net dollar retention should obviously be much above that, especially if they install hardware. It's very rare that they're gonna rip that out. What is your net dollar retention target and where are you today?

Alex Jekowsky

14:15I think the way that we view it is kind of the the where we wanna be is at the top, if not greater than that. I think best in class benchmark you see from Bessmer's website or insight or anything of the kind of one fifteen to one thirty. That's within the realm of like you wanna you wanna be living there, ⁓ in general. ⁓ for for us, yes. But again, we wanna be out of market ⁓ in all of these things. And so look, we we're gonna do you know, we have we only have, you know, ninety

Nathan Latka

14:32Are you there today?

Alex Jekowsky

14:42Or so employees, maybe 94 employees at the scale of revenue that we're at today. So again, for us, efficiency and doing things at the capacity that we can do them that the industry can sustain is what is most important. Are there, and I think the the message I give to any founder, there are always more ways to grow and there are always more ways to add risk to the business. We don't have the the macroeconomic, the foreign policy, the AI trends, all of those things we are insulated from. Our industry is insulated from, our product line is insulated from. And so what is most important is to accelerate our path to growth and de-risk our execution along the way. And by adding more execute by adding more risk in order to accelerate growth, it doesn't make sense. By de-risking so much where we decelerate growth, that also doesn't make sense. And so the two need to go together. And because like our business can still, you know, grow between 50 and 100%, if I only add five to 10% net new locations better than I did the year before. And so I think I tell every founder, it's like get to know the market and the business that you're in for what it can sustain and what's the best version. Every time we try to build toast or Ola or Slice or Jabber or this, that, the other, we don't, it doesn't work for us because every market is different. Also, every founding team and executive team is slightly different. Every product team mindset is slightly different. And so you got to do what you can do and be really intellectually intellectually honest for the the long term ⁓ plans of the business.

Nathan Latka

16:11Sixty million last year of revenues with ninety four employees. I mean, you have world class.

Revenue per Employee and EBITDA Profitability

Alex Jekowsky

16:16Well, technically we had like s technically we had like eighty at the end of last year. If you're trying to equate them.

Nathan Latka

16:20Okay, well I'll give you even more cred. I'll do I'll give you even more credit then, right? Sixty million divided by eighty, I think, is about seven hundred and fifty thousand of revenue per employee, which is world class. Right. How are you doing so much with so little? And were you profitable last year?

Alex Jekowsky

16:33Yeah. And we're we're operating at at ⁓ above twenty percent, even the margin. So like that's you look, I'd say one, growth and comfort don't coexist. So we like to push our team. One of our one of our executives, ⁓ Nick Deincenso on our sales side, he has a great quote I loved using, which is, you know, people grow linearly and businesses grow exponentially. And we've had a really good time having our people grow exponentially, ⁓ alongside it. And I sometimes I look at companies with hundreds of employees and I even know what they do all day. ⁓ I can't really figure it out.

Nathan Latka

17:02Yeah, you you you you guys you guys were having fun even four years ago before the hundred and forty million series C though.

Alex Jekowsky

17:03⁓ yeah. That's right. Look, I I think holistically and and in general, ⁓ there's no amount of money ⁓ on the planet that would have me do something that I don't fundamentally love and I'm passionate about. Doesn't mean I don't hate it many times and you wanna, you know, ⁓ put you know, punch yourself in the face every morning is what it feels like. But I think everybody in the company has aligned on our guiding principles most impactful thing that we've ever done as a company that was inspired by Chase Gilbert over at Built who created their guiding principles, which is basically the value, character traits and values of what it means to be an employee. So, you know, act like an owner, ⁓ commitment to communication, customer obsess, great responsibility, diversity in team culture and thought, the list goes on. That's helped us identify talent well. and I think people, you know, we have the the best metric outside of customer attention is 98% Employee retention. I've only lost, I think, three, maybe four employees ever that make over ⁓ a hundred grand. Like it's really rare that we have any employee retri attrition because I think we have very authentic, honest and empathetic culture that also like loves to try new things. There's that Albert Einstein quote, I think it's Albert Einstein. He If you haven't failed, you haven't tried new things, something along those lines. ⁓ and so I think it's a culture that embraces failure as an opportunity to succeed and grow. ⁓ and that pushes that level of, I think, culture connectivity because we're all in the shit together kind of thing. So it's an efficiency metric, but it's also the the reason we've been able to be that efficient per employee is because of the retention per employee, because that's kind of what we look for. But we'll never be happy until we at least hit a million of revenue per every one headcount. That is, that's the benchmark.

Nathan Latka

18:51Fair enough. Hey, I want to be Alex respectful of your time. We had a hard I mean, we had a stop now. Do you have five, ten more minutes here or do you have a hard stop?

Alex Jekowsky

18:57⁓ yeah, yeah we do find more.

Why Raise the $140M Series C

Nathan Latka

18:59Okay, you you cut me off when you have to go, okay? ⁓ all right, but we'll we'll definitely end here in seven or eight minutes. So let's continue the growth story here, right? So if someone's thinking, wow, twenty percent EBIT to profit you know, profits in twenty twenty five on sixty million, why would he go out and do the hundred and forty million series C? What was your thinking?

Alex Jekowsky

19:01Okay, deal. Well, hopefully you never raise capital when you need to. that's always not a great position to be in. ⁓ when we did this round, we said here's the this is the valuation we want to raise that, and these are the terms we want to raise at. It wasn't if somebody offered 20% more or X percent this way or the other, didn't sway us. We had higher term sheets. We had different terms by different folks. ⁓ I think the the thing that drove us to to want to raise the capital was the quality of the partnership of Sumeru. I had spent time with an ⁓ every great blue chip. Growth equity and venture capital firm in this process. And Sumeru stood out in just the quality of their partnership, the people that they have around the table. it's just I've never experienced anything like it. Of course, you know, Bessmer and Camber Creek and the other investors we have at the table. but the the connectivity, the synergy of Sanjeet, the managing director, Chris Litzer, managing director of ⁓ Nate Stanley, the principal that did the initial kind of reach out to us. It's just an amazing group, top to bottom. And we I mean, we went probably had Three or four dinners before we even started in the process. And in aggregate of the 12 hours of of of dinners and ⁓ in, you know, I don't even know how many bottles of wine. We probably talked about sense for an hour or two. But as people, they just were incredible. And that's what we indexed on ⁓ you know, more than anything else. And I would tell any founder that is the only thing that really matters because if you have great people around the table in the shit and in the winds, you're in. the best position you can be in because you're learning, you're growing, you're getting better, you're iterating and you're celebrating. ⁓ and you know, I I always said like I never want to be afraid of going into a board meeting. I'm okay to be frustrated and angry knowing I'm gonna my ass kicked, but I want to be afraid because afraid means I don't know the people around the table. I don't know how to predict them. I don't know who they are or how they're gonna react. Like we know we know each other and we've been able to build that bond. So that was a big reason. And the other side of it again, it's it accelerate growth, meaning pull the out years in and being able to get into dry cleaning and our And our shared laundry rooms and multifamily properties. We power now, you know, nearly 7,000 apartment buildings, shared laundry rooms, college campuses, all of that, and pushing deeper into other retail sides ⁓ in terms of dry cleaning alterations, et cetera. And we knew we needed we wanted capital to do that ⁓ and bring on a great partner to steward that next phase of growth ⁓ on the board. And then also provide liquidity for some of our employees. We did an employee tender as part of this. ⁓ and it's cool having an employee that has worked killed themselves the last four years and now gets put down payment on a house because of the effort that they put in. And there's nothing there's only one one thing better than making money and it's making other people money.

Nathan Latka

21:46Mm-hmm. What percent of the hundred and forty million was for that sort of thing versus operations?

Alex Jekowsky

21:50Operationally, I think it was like we did a series C close of $110 million and a $30 million tender. And even in the 110, there were still some some some secondaries there. So I would say it wasn't ⁓ it wasn't primarily ⁓ for growth capital, but definitely growth capital is helping us fuel a huge amount of the continued kind of accelerant of our growth in the out years.

Series C Structure: Primary vs Employee Tender

Nathan Latka

22:12And you you led the program here, you didn't need it. You said you were going in sort of targeting evaluation. People want comps, obviously. You just closed this in a couple of months ago, ninety days ago. Are you comfortable sharing what you saw in terms of evaluation?

Alex Jekowsky

22:25What what I what I'd say is, you know, like I'm not a big believer in in, you know, sharing all the financial metrics and valuations because it's so volatile. I mean, I even tell that I tell the company all the time, but I'm like, look, a preferred a preferred share pride is what is what a willing is ⁓ is what an investor is willing to pay. and especially as an early stage company. Yeah, yeah, exactly. Funny enough, I'm kind of annoyed our four nine A was so high. ⁓ I wish it was lower. Exactly.

Nathan Latka

22:42We can talk about we can talk about four nine A if you want instead. Yeah, you gotta negotiate to get it lower, man. Come on.

Alex Jekowsky

22:53But I look, I I think for us, what when we kind of set the valuation target, it was all right, we know at this price, these are the buyer profiles and this is the path to liquidity for us. And ⁓ what I tell every like I have a share price calculator in our financial model from now until 2031 monthly. We know what percentage of the market we need to have. We know all of the relevant metrics to have an outcome. And none of it bull or bear market, you're what are you, 30, 40 times eBa dub multiples if you're growing nicely with good margin, you're at 10 to 20 times ARR multiples and If again, if you're growing nicely with good retention and and like none of this, I can't I'm we're not SpaceX and we're not some of these AI companies that I have I haven't been able to really figure out what is driving enterprise multiple versus growth, excitement, and scarcity ⁓ of of opportunity. But in our business, when you know those are generally the multiples, then you know what if somebody were to buy the business and where why they would buy it. They're buying it because the customers are happy, the business is ripping, the product's really great, and somebody buys it because they think they can have cash flow and continue to grow it. ⁓ now for context, like I love this business. I'll run this till they don't let me. So when I think about liquidity, it's not so I can sell it. It's so I, you know, we provide liquidity for some and we continue to rip it. ⁓ but I I I try to tell founders like valuation is not built for the TechCrunch article or the podcast or the this valuation is built to set yourselves up for for generating future value for the investor in the round. And if you can't in your mind honestly ⁓ figure out how somebody gets their four to six X, if you're doing growth equity or 10X plus if they're doing venture, whatever it is, then you're not raising it the right price. Or if you feel like you have to sell somebody on what that outcome could maybe be, ⁓ you're not being as honest, or you don't have the plan yet, which also is fine. ⁓ but we feel very confident in the price that we raised at to deliver the kind of outcome that an investor is looking for at this stage ⁓ with a ton of market comps that makes sense and and being able to also build the business the way that we want to.

Valuation Philosophy and Founder Advice

Nathan Latka

24:57I have mad respect for founders that manage the valuation to make sure you're not siphoning off all of your future optionality for the sake of again a headliner or article today. So you're a second time founder, third time founder, mad respect for that. Can I pin you down though and put you somewhere between a ten and twenty X revenue multiple?

Alex Jekowsky

25:15yes. You can you can pin me you can pin me down down somewhere near there.

Nathan Latka

25:18Okay, fair enough. And the reason I look it's I think it's valuable lesson for founders, right? So Alex, correct me if this is wrong. What Alex is thinking is listen, a hundred and forty is a lot of money, ten to twenty X feels okay. If we keep growing, he sees outcomes where someone would pay more than that multiple, where everyone would be in the money, basically himself, investors, employees, everybody. Alex, is that sort of accurate?

Alex Jekowsky

25:38The way that I view it is ⁓ you know, when you're getting the multiple and that's driving the enterprise value and somebody invests at that, at that price, can you get, if it's growth equity, can you get four to six X that price in an outcome with enough of a buyer profile where, you know, why do people go public? Public going public isn't a liquidity event. It's a financing event. and yes, some people gain gain liquidity after the whole period for sure, ⁓ but it really is an another financing event because you've raised too much capital. The preference stack is. Is crazy. It's usually because you you kind of have to at a certain point. And they're you're too big to be bought or whatever the the case may be. And so we want to prov preserve as much optionality as possible for an exit event, whether it's going public, selling to a strategic private equity, or staying private and holding the business for as long as as as we want. And so, but you but no matter what, in order to preserve that optionality, you have to be in a position to be able to have a growth equity or private equity event. Or a public event or something like that. Or you need to have the cash flows to stay private and not constantly need more capital. And so they tell founders like, if you're raising it at growth equity, can you underwrite a four to six X if nothing went right? Nothing went, nothing can go wrong. But if nothing went more right in your model, if you didn't have ridiculous forecasts or try convince somebody that two years from now you're gonna launch this product and it's gonna get a hundred percent you know, attachment rate, like if you can. not assume that's gonna happen and underwrite a four to six X or your 10x or whatever that is, then you can back into what a fair multi for fair multiple and a fair valuation is. And again, if if you can if you can sustain a super high revenue multiple, then go for it. ⁓ But I think we've seen it more often than not, where ⁓ companies raise at large prices and the investors rarely lose, but the founders will lose more, the employees will lose more, the common stockholders will lose more ⁓ and so I'm just very mindful of that, especially when this is probably the first time in a in a while where three years from now feels like a very distant future in terms of the world of AI and where the market's gonna be and what the market can handle and sustain based on the current amount of capital being deployed ⁓ to to startups.

Nathan Latka

27:49So let's wrap up the valuation stuff, then have you wrap up the whole show here with maybe a minute or two on product, right? You you have multiple product lines, AI's a big deal and then we'll we'll sort of end. I think a good tie up on terms of the how much you raised, valuation, all that side, especially taking care of your employees. How much today of the company, which is all in is the ESOP pool plus you plus employees, basically non investors. How much do they still own?

Alex Jekowsky

28:11I think for us, I mean we're not we don't we don't we're not giving percentages on on that out necessarily, but I what I will say is the the the common stockholders are are very well positioned and this is a founder led business. and so, you know, even even at ⁓ even at the board level, ⁓ this is a very founder led business. And, you know, we've positioned again to ensure that there's no and I tell every founder like it also doesn't matter if you raise the capital. So what are the terms of that capital? What are the protective provisions? What are the do you have an IRR guarantee or a liquidation preference or a something where it actually you didn't raise at a billion dollar valuation, you raised it two if you want to make any money? ⁓ you know, there's

Nathan Latka

28:50Two X pref is what you're re referencing.

Alex Jekowsky

28:52Exactly. So everything, the devil's in the details. And so we've really indexed on ensuring that all of our investors are aligned with the founders and the team. and that's having that level of alignment at the board level, at the investor level, again, is a testament to Sumeru, to Bessemer, to Camber Creek, that we want all of us to succeed and be aligned in what it takes for that to happen. ⁓ and I think that's the most important thing. When you think about founder control or employee control, ESOP, et cetera, it's really less. who has what and more who wins when what happens. ⁓ and if all of the interests are aligned, you tend to have a really productive board and you tend to have a lot of trust and and transparency at the table.

Hardware, Payments, and Product Mix

Nathan Latka

29:34Take us home here on product. of the sixty million of revenue last year, how much was hardware versus percentage EMV versus software?

Alex Jekowsky

29:42Yeah, it's actually not so dissimilar to to toast. It's kind of that's the benchmark on the numbers off the top of my head. But I think the the the thing that we view hardware for us is hardware is unique because it's really a payments hardware product. So you have this big push of revenue on on hardware. There it is right there. Big push of revenue on hardware, but every hardware device that goes out there has SaaS and payments attached to it. So you have this hit of revenue and then the longer tail SAS and payments you know revenue line flows from there. And so that's Obviously, you we we process a huge amount of payments through our Rails between cash and and I think we're we're around 140 a million a month or or so right now. So it's a pretty sizable volume ⁓ that flows through. And again, that is largely driven by the hardware that we sell. So every one time rep

Nathan Latka

30:16How much? Do you make margin on the hardware or is it a loss leader for the payment volume?

Alex Jekowsky

30:33No, that's the the the hardware is ⁓ one and it's it's a great margin product for us. ⁓ and it's similar to like a like look the laundry equipment manufacturers. They sell this one-time piece of laundry equipment. It's got great margin, provides a ton of value, and lasts a really, really long time for the customers. We don't view hardware as a gateway to software. I mean, obviously it is, but the hardware itself, standalone, it isn't just an Android tablet. Like we custom built that device that's on that machine. From the enclosure to the EMV modules to the screen to everything to have standalone value to the operator beyond just here's an Android tablet that comes with a point of sale. Now, in our point of sale, like right here, that's a breaky, we don't make money on that. That's not where we want to make money, right? Because that is call it an interchangeable Android solution. Now it works really well for our R space. We've spent a lot of time with different hardware manufacturers to build the best products there and use Stripe as our as our payment processor. But The custom built hardware is where we both have margin, but it does so much more than just function as a screen and a payment acceptor. and that's why we're able to actually build meaningful margin.

Hardware Units in the Wild and Closing Thoughts

Nathan Latka

31:37How many of these are in the wild today installed?

Alex Jekowsky

31:40Of those across all of our hardware products, not just that. I think it's like two hundred fifty thousand, ⁓ something. ⁓ it's two hundred thousand, two hundred fifty thousand some something along those lines. I don't have the number in my in my head, but it's a lot. It's a lot of out there.

Nathan Latka

31:43Sure, everything. Yeah. Yeah. Yeah. Yeah. Alex, I could talk to you forever. I mean, you're in so many different product lines. You're in really interesting space. You're not sort of touting this, we're gonna be worth thirty billion dollars because we're an AI product. You're just doing the good stuff the right way with good people and you know, serving the customer. So this is great. Anything else you want to touch on before we wrap here that I should have asked?

Alex Jekowsky

32:10no, this is this was great, man. I really appreciate you having me on and this is probably the most ⁓ most direct I ⁓ questions I've gotten on some of these podcasts, which I really appreciate. ⁓ so I no, I I I I look I love it. I don't know if anybody in my team will be like, Why'd you say that thing? ⁓ but no, I it was great. And hopefully again, like we want it to be helpful for other folks that are in maybe a similar position or a step before or it you know, something like that. ⁓ 'cause I know, but again, it's like we're one data point. What what this is what worked for us. Maybe the opposite works for somebody else. ⁓

Nathan Latka

32:18Is that a good or bad? Some people love it, some people hate it.

Alex Jekowsky

32:39But I appreciate you having me on and and for your thoughtful questions and it was a lot of fun.

Nathan Latka

32:43If people fell in love with you just watching you, your answers, they want to get behind you as well. I mean, are you hiring or like where where do you want to direct people?

Alex Jekowsky

32:49Yeah, we're we're hiring. So, you know, try sense dot com, T R Y C E N T S dot com or LinkedIn. Feel free to message me on LinkedIn or look at our look at our page with general interest applications if there's a role that we're not actively hiring for that you're interested in. ⁓ go take a look and we'd love to connect.

Nathan Latka

33:05Alex, thanks for taking us to the top, man. Appreciate it. All right, guys, cut. Alex, that was awesome stuff, man. Seriously. You have so I feel like you could you could teach for an hour if I if if if you had the time. So that's great.

Alex Jekowsky

33:07Awesome. Thanks, Aiden. Cool. ⁓ No, no, I appreciate it. Sometimes I'm not as economical with my words as I probably should be on some of these things, but ⁓ but no, I I appreciate the questions. I actually don't I've told a lot in interviews, like our revenue growth thresholds. I don't think I've ever done it on a podcast. but I think it's valuable. Like as so many companies are talking about their revenues today, I always wonder like, why do we why do I care that somebody posted a that they hit a hundred million of ARR? Like, you know, but I think it

Nathan Latka

33:30Yeah. Totally.

Where to Follow Cents and Hiring

Alex Jekowsky

33:40But I think it is a v like one can attach some like, hey, if you're listening to somebody, they've been able to build a business that's scaling and growing. ⁓ and that's I think important and I hope valuable to our customers. I always say like, friends want friends to make money. I want my customers to want me to make money and cause I want more than anything else, my customers to make money. and I think that's kind of the the the beauty. So no, I appreciate the questions and appreciate the time.

Nathan Latka

34:02No, you taught it you taught a bunch. I mean, it's very it was very, very useful. y you're busy by the way, but I mean, we're getting a bunch of vertical SaaS founders that are at a hundred million plus of revenue out in Napa. We rented the whole ranch. Like if you want to come join these folks, like let me know. I'd comp your ticket. I mean, you would add so much value to the to the the invite list here.

Alex Jekowsky

34:19Yeah, w when is it?

Nathan Latka

34:21It's September eighth and ninth in Napa Valley on a vineyard.

Alex Jekowsky

34:24I may my I'm from Tiburon in Marin County, so I know the my dad lives in Yachtville, so ⁓ there we go. Sick. yeah, well look, send it to me. Send I I don't know where I am in September, but send it to me. Look, I I generally don't love going to events and things like that. However, if it's like tailored of these kind of peop th these kind of caliber people, I probably learn a a shit ton and really enjoy it. So

Nathan Latka

34:28In Stanley Stanley Ranch, Alberg. You're you're busy. I'll send it to you. Yeah. You'll teach them, they'll learn from it'll go both ways for sure. But you're busy. I'll I'll send it over. If you have time, great. No worries. Otherwise we'll get this into post production. We'll get the promote the hell out of it and appreciate your time.

Alex Jekowsky

34:56Awesome, man. Thanks so much. Appreciate it. Take it easy.

Nathan Latka

34:58Amen. Bye bye.