Cents · B2B · software for laundromats
Buy a hardware company when building your own hardware gets too hard
Revenue went from $6M to $36M the year of the deal
What they did
What happened
- Stage
- growth
- Effort
- In-house hardware effort for ~1-2 years before the acquisition
In their words
How Does Laundry Software Make $60M a Year?
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 Jekowsky… 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?
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More from this episode
- Sign a 73-store operator as your first customer and build with themGot full access to their stores and back office; product a bit overbuilt but solid
- Walk into laundromats and call them, pitching a no-labor delivery add-on firstGrew to about 80 stores and ~$700K revenue in 2021
- Sell your own payment hardware at a profit, with software and payments attached~$140M a month in payments; 200-250K devices installed; 99% customer retention
- Raise at a price investors can 4-6x, and turn down higher offersRaised $140M at 10-20x revenue while profitable; guest says exit options stay open
- Set aside $30M of a funding round to buy shares from employees$30M tender inside a $140M round; employee retention 98%
- Aim for $1M of revenue per employee and keep the team small~$750K revenue per employee, 20%+ EBITDA margin, 98% employee retention
Tags: buy-side-acquisition, hardware, build-vs-buy