Proud to have been the primary enterprise investor!! https://t.co/nlwPkUnSZJ
— Jason ✨Be Sort✨ Lemkin (@jasonlk) August 29, 2023
I used to be fortunate sufficient to be the primary enterprise investor in a next-gneration ediscovery startup, Logikcull, manner again in 2015. A flash-back to them at $1m ARR or so right here:
Andy Wilson CEO has been a part of SaaStr occasions and contents since then, and an awesome session beneath on how they scale, and an awesome publish right here on how they migrated from a companies enterprise to a real SaaS enterprise right here (at all times arduous).
There’s quite a bit we might discuss there on Andy and Shen’s 19+ 12 months journey to a giant exit (together with their decade as a companies firm), however we’ll save that for a podcast and a deep dive quickly.
Right here let’s speak concerning the deal: Logikcull and one other adjucent vendor have been simply collectively acquired for a mixture of $1 Billion Money.
As a result of I believe we are able to study quite a bit right here about Personal Fairness works in SaaS and acquisitions.
Logikcull was/is doing tens of hundreds of thousands of ARR and has been worthwhile for a while (sure it may be executed) with stable development. What occurred right here? It was acquired to mix it into an e-discovery chief at 9 figures in ARR.
1+1 =3 right here
How does it work? Think about one SaaS scale-up at say $100m ARR rising say 30% — good however not fairly sufficient to IPO. Now mix it with one other at $50m ARR rising say 40% — once more, good however not sufficient to essentially as a result of a billion greenback mix. Now what do you could have? A frontrunner at $150m+ rising 35%. That’s on the trail to an actual IPO at $200m ARR in only a 12 months or so. Whenever you may not have gotten there in any other case.
So collectively, Logkicull + iPro are price $1 Billion Money — even in right this moment’s market. Alone? Most likely lower than the sum of their components, for now.
Personal Fairness does a number of these offers, and count on to see much more going ahead. However they actually solely work when you’re environment friendly. Logikcull stopped elevating at a $100m valuation after which received worthwhile round $30m ARR. That makes firms prefer it a really engaging “goal” to mix with one other chief.
However when you’re sitting on an enormous valuation, or burning a ton of money, lately have a tendency … to not occur. Extra on that right here.
An enormous congrats to Andy, Sheng and the entire Logikcull workforce on one of many prime “exits” within the area. Increase!!