The Ledger
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Low-margin professional services prevent fatal pre-live SaaS churn
“If you don't get professional services right, you see pre-live churn spike, which obviously impacts your universal churn. And then post-live churn, you want to drive down below 10% and get to sort of four percent and be super sticky. And that's why professiona…”
Hard sales quotas for CS incentivize short-term decisions that harm LTV
“And then they make decisions for the short term and it does not, not good outcome for lifetime value.”
Brightpearl's fully loaded cost per AE is approximately $580,000
“When you look at the fully loaded cost of each AE, we're running at about five 80, you know, when you take in count your BDO or your cost of pipeline, and you look at all of the people that you need to feed a new AE, because we run a territory model.”
CEO Derek O'Carroll required a down round to reset Brightpearl's valuation
“When I came in the terms of me joining and what we agreed with the board was we would do a down round and we would level set the business based on a true valuation that we thought was more in keeping with the fact that it had high churn and that's not viable.”
Brightpearl deploys in 110 days versus over a year for legacy ERPs
“Customers go live we're clipping along at about a 110 days in the last 12 months, in the last 12 month period, and that's calendar days. So that's from when you sign to when you go live. Which in comparison to the sort of legacy ERP systems like SAP or NetSuit…”
Brightpearl targets $25M ARR by adding $7.2M net ARR in 2021
“We've got twenty five million of R to get to in terms of total R. So I've got to add 7.2 million of net R at the end of the year, by the end of this year, of which 2.2 million will come from expansion.”
Brightpearl bases CS commission plans on retention rather than hard quotas
“We have CS reps split into two. We have technical account managers that are all around adoption. And then we have account managers that are all about contract renewal, negotiation, pass value delivered. So they're the two roles. And both of them have a commiss…”
Brightpearl's AOV nearly tripled after shifting from per-user to GMV-based pricing
“The monetization strategy was based on, it was a per user based license structure when I joined. And we moved it to a GMV number of orders, whichever is higher, because we obviously do retail and wholesale. And we did that in January, 2017, and we saw our aver…”
Targeting one specific competitor sharpens sales teams and drives product differentiation
“And by selecting a target for the team to go after, it really created that sort of sharp end of the stick. Everyone went after that competitor. And then that really also has driven that differentiation and the value selling that I spoke along. So it's importan…”
Brightpearl's enterprise customer acquisition cost is approximately $27,000
“Whereas the CAC, when I look at the overall, as it pertains to overall customer base yeah, so it's about 27,000 dollars at the moment to acquire a new customer in the enterprise space, so my mistake, yeah.”
Brightpearl reaches $18M ARR with over 850 customers
“We're at eighteen million dollars in our, we're at just over 850 customers, but I'll explain why we've got less customers now.”
Brightpearl ARR is growing at approximately 40% year-over-year
“And we're clipping along at about 40% our growth per annum.”
Brightpearl average order value grew 588% to $38,000 per account
“AOV over the four-year period I've been here AOV has gone up 588%, and it's now at 38,000 per year on a per account basis. That's subs only, not implementation.”
Brightpearl maintains 13% gross churn and 102% net retention
“We're at still 13% churn and DOR is at a 102%.”
Failed implementations account for 5% of Brightpearl's 13% gross churn
“When you look at that 13% churn, about four points of that four percent of it, sorry, five percent of that is coming from What we call failed implementation.”
Brightpearl processed $4.4B in platform GMV in 2020
“In 2019, we processed three billion dollars of orders through the platform. In 2020, that went up to 4.4 billion dollars.”
Brightpearl quarterly expansion revenue grew 140% quarter-over-quarter
“Expansion in the quarter. So this is this quarter. Is running at a 140%. So that's a good indicator for and that's growth this quarter over last quarter.”
O'Carroll: Brightpearl processing volume growth will normalize to about 40% in 2021
“It grew last year, which is quite exceptional, just over 60%, or sorry, 58%, I think it was. And we expect this year to sort of normalize a little bit down to about 40% growth we expect this year.”
Brightpearl AE monthly quota floor is $75K in new ACV
“Average ACV, so annual contract value per month that we expect from each individual head is 75 K minimum. So that's their sort of floor.”
Brightpearl has raised $71M all-time, including $39M since 2017
“We've raised 71, I think, in total since the company was started in 20, sorry, 2008. But since my tenure, I essentially relaunched the business in 27. That brings us to thirty-nine million.”
O'Carroll: Brightpearl achieved breakeven and zero cash burn in 2020
“Last year, we reached break even profiles. We weren't burning any cash”
Brightpearl will split its $33M round across working capital, M&A, and reserves
“So of the 33 we raised, we're going to deploy a third of it into working capital improvement into the business. We're going to keep a third of it aside for some acquisitions that we're looking at. And we'll keep a third for a rainy day in the bank”
Brightpearl has a pipeline of 12 breakeven acquisition targets
“So the criteria is pretty simple. So technical only. So companies that have really good product, but not necessarily the cost of anything else. So engineering teams. I'm looking for a breakeven profile. They can't be burning cash. Preferably I'd like pre-confi…”
Brightpearl raised $33M at $105M pre-money, up from $8M in 2017
“Pre-money, 105. When I joined the company, it was worth eight.”
Brightpearl reached $11.35M ARR with $1.8B in customer invoice value
“In the last 12 months, our customers transacted 1.8 billion dollars worth of invoices to cash on the platform, and when you translate that to our revenue, if I look at say our annual recurring revenue as of this morning, we're like on the first half, so at the…”
Brightpearl added $2.2M in new ACV and $1M in services over six months
“New annual contract value accrued, if you like, or one over the six months, that's new business upsell and uplift is about two, well, it's 2.2 million dollars. And then professional services on top because we have to do a lot of work. Bringing people onto the …”
Brightpearl's annual gross revenue churn dropped from 20% to 13%
“And then we're running sure churns about 13%, which is pretty high. But if you look at last year, it was 18% in the year before that it was 20%.”
O'Carroll: Brightpearl cut micro-retailer revenue share from 70% to 28%
“Say back in 2016, 70% of that revenue stack or the revenue stack then was coming from those micro retailers. Whereas now only 28% of that revenue stack comes from those guys.”
O'Carroll: Brightpearl dollar retained revenue rose from 85% to 102%
“For me, that's dollar retained revenue, so that's at the moment it's just over a hundred percent, so it's a 102%, whereas two years ago it was running about 85%.”
Brightpearl has raised a total of $45M since its inception
“So the company today has raised forty five million dollars since, since its inception.”
Brightpearl has 913 customers at $12,434 ARPU
“We're at 913 customers at the moment. So ARPU is about, well, ARPU is 12,434.”
O'Carroll: Brightpearl new contract AOV reaches $27,720
“Average order value of new deals is 27,720. And that's AOV as it pertains to subscription that wouldn't include ProServe on top.”