Sell your own payment hardware at a profit, with software and payments attached

Nathan LatkaI mean, you are a triple threat integrating all these things into one. Did you start off into hardware, or software, or payments, or was it all from day one?

Alex JekowskyThe 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 you- like we have to be the all-in-one. And the beauty of vertical SaaS, right? It's a smaller market, but you should have higher penetra- higher penetration, higher retention, and higher attach rates to all the products you deploy going forward, right? So, we started with the point of sale, because software easier than hardware. Uh from an iteration perspective, from a deployment perspective, from a hiring perspective, from a cost perspective. Uh so, we started a core product with the point of sale as we were building the hardware. Then we commercialized the hardware in kind of late 2022, early 2023, uh and then realized, damn, this hardware thing really hard. Uh and while we made, you know, a couple million dollars of sales, and we were pouring a lot of money into the effort, realized best way to derisk and accelerate uh that execution was potentially through M&A. And that's what led us to kind of buying a business in 2024 that accelerated a lot of our hardware growth.

Nathan LatkaAlex, take us back to day one. When'd you guys write the first line of code for the business?

Nathan LatkaTake us home here on product. Uh of the 60 million of revenue last year, how much was hardware versus percent of GMV versus software?

Alex JekowskyFor us, the hardware's unique 'cause 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 SaaS and payments uh, you know, revenue line flows from there. And so, that's Obviously, you know, we we process a huge amount of payments through our rails, uh between cash and and

Nathan LatkaHow much?

Nathan LatkaDo you make margin on the hardware, or is it a loss leader for the payment volume?

Alex JekowskyNo, that's the the the hardware is uh uh one it it it's great margin product for us. Um 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." 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.

Nathan LatkaHow many of these are in the wild today installed?