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(4) – Who Are the Clients?
Continuing from the last post, Reza started breaking down their revenue data in detail. He shared that they’re currently managing 16,000 units, generating an ARR (Annual Recurring Revenue) of $1.5M just from this vertical alone. Moreover, the growth rate continues to accelerate, with new clients and units driving ARR growth by approximately 20-25% per month. In about 2 months of time, they project ARR to reach $2M, and by the first quarter of 2025, it could climb to $4-5M.
Surprised, I asked, “Wait, you’re saying it could double again in just three months? How is that even possible?”
He replied, “That’s exactly how it’s been growing over the past few months! 😂 The key is increasing the number of doors! Onboarding a single property management company typically adds 500-1,500 units, so the number of doors scales quickly.”
I said, “But property managers with around 1,000 units aren’t exactly large companies. What’s your sweet spot for clients?”
He responded, “Bingo! Our typical clients are small to medium-sized property management companies. Those managing 500-1,500 units love our service the most. Larger companies are usually part of big institutions and rely on institutional-grade vendors and software. On the other hand, companies managing fewer than 500 units are often family-run businesses. While they’re stretched thin, they often feel they can handle things themselves and don’t see the need for software. But those in the 500-1,500 range are caught in the middle. They’re not big enough to attract and afford institutional-grade services, but they’re too large to manage everything on their own. That’s where we come in: an all-in-one, affordable solution that delivers better quality and efficiency than manual labor.”
I asked, “Do you have any data to back this up?”
“Of course,” he said. “On average, property management companies spend about $18 per unit per month. With our solution, that cost drops to $7 per unit per month—a 61% reduction! And it’s not just about cost savings. The accuracy, completion rate, and efficiency of the work are all significantly better than what they currently achieve. The most important factor is that by reducing costs and improving quality, these companies can sign more units. The manpower, time, and financial resources they save can be reinvested into scaling their operations to take on more units to manage. This is why small-to-medium-sized companies love us so much. Our retention rate among signed clients is nearly 100%!”
He continued, “We haven’t even started cross-selling or upselling. As we expand, that $7 per unit per month could easily increase to $12-13, while still being more affordable, higher quality, and more feature-rich than any other solution on the market.”
I said, “Okay, I understand the SaaS revenue stream now. What about the labor market revenue you mentioned, the one that replaces manual work? That sounds like a sensitive topic. Do you have data to share?”
Reza smiled. “Every time we bring this up, investors tread carefully. But the labor we’re replacing is actually offshore, remote labor.”
Till next time!