Schumacher: SaaS Group strives for 20% to 30% profit margins
Tim Schumacher · The Micro PE Playbook: They Bought 20 SaaS Companies, $60m ARR, 300 people · Aug 29, 2024 · at 7:55
Tim Schumacher, co-founder of SaaS Group, discusses target profitability and margins across their software portfolio with Nathan Latka.
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“We always strive for profit margins somewhere. 20 to 30%.”
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More from Tim Schumacher
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“If you manage the SaaS well, it's almost impossible to get into bankruptcy. It usually only happens if there's a VC pouring too much money. Founders go crazy. The environment tanks.”
Schumacher: SaaS Group halved DashThis's ad budget while doubling output
“One of the first things were we slashed their Google paid accounts in half. So we basically slashed the budget in half, but we doubled the output. So essentially we forex the lead gen just on that Google, Google paid account.”
Schumacher: SaaS Group funds deals from balance sheet, currently 100% debt
“We have tons of cash. We're just doing every deals, doing deals all hundred percent debt. So we're not, because we're not putting things into SPVs or special purpose vehicle. We're not a PE company. We're really just always, always investing from our own balan…”
SaaS Group acquired Crosscall and Zenloop out of European bankruptcies
“Cross Talon out of French bankruptcy and Zen Lube out of German bankruptcy.”
Schumacher: SaaS Group buys most companies at 2x to 4x ARR
“Eight on nine X is very rare. I think we did this one on a very small deal, which had strategic importance. And it was growing very fast, but usually, yeah, two to four is pretty accurate. There's some a little lower than that. There's some a little higher, bu…”
Schumacher: SaaS Group always acquires 100% of companies
“We don't, we always do a hundred percent. So we are not, that's the core difference. Like if you would get, go to a private equity company, they would take a significant minority or a majority. And then they would flip the company three years later after they'…”