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SaaS Interviews with CEOs, Startups, Founders
From $187M Ecommerce to $5M ARR SaaS: Spresso's Post-Bankruptcy Pivot to Enterprise Software | Jared Yaman
00:28:11
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- [00:00]
A
My data shows December 2020 ending with about 187 million bucks of revenue. How much equity had you guys raised up to this date?
- [00:06]
B
Yeah, I think it was around 3380.
- [00:08]
A
$380 million. How much equity did you own when you guys went public?
- [00:13]
B
When we IPO'd, I was down as a startup or as a founder to low single digit percent.
- [00:18]
A
It looks like you're right, about 6%. Surely he made more than 10, 20, 30 million bucks on this company, but it sounds like that was not the case. Is that accurate?
- [00:25]
B
Yeah, it was not the case.
- [00:26]
A
What was revenue of Espresso when you spun it out?
- [00:28]
B
We sort of brought through, I'd say around two and a half million in early 2023.
- [00:33]
A
Are you comfortable sharing where you guys finished? 2025 in terms of revenue?
- [00:36]
B
Yeah, it's about Double.
- [00:37]
A
Then on April 2, 2023, you guys file for Chapter 11 bankruptcy there. Hey folks, my guest today is Jared Gaiman. He was previously the co founder of Boxed. He led the company's growth and innovation in the online wholesale retail space all the way through an IPO in 2021. I think that was via SPAC. As its CEO Spresso now today deploys technology worldwide, solving significant challenges in the e commerce space. Jared, you ready to take us to the top?
- [01:02]
B
Yes, sir. Thanks for having me. Nath, you the audience for tuning in?
- [01:05]
A
You bet. We're going to mostly focus on Espresso today, but we can't do that without your background going back to 2013. Based off my research, Boxed was not a small company. I mean, when we look at year ended, 2018, total revenue, net revenue, we're looking at 140 million bucks. Well, I'm reading off the S1. Is the S1 accurate?
- [01:22]
B
No, no, no, that. Trust me, they're very accurate. Yeah, okay, Very accurate.
- [01:25]
A
That's the right answer. By the way, if your S1's inaccurate, you're in a whole lot of trouble.
- [01:29]
B
Yeah, it's a s1sec.gov requirements or you know, startup visionary, you know, calculations. But yes, sir, you are correct. I appreciate, I appreciate the research.
- [01:40]
A
This is ultimately about you. So look, my data shows December 2020 ending with about 187 million bucks of revenue. What happened to Boxed?
- [01:47]
B
Okay, yeah, well, let me explain a little bit more about what Boxed did. So I came to New York, I can remember this off the top of my head. Friday, September 12th of 2008, as a corporate lawyer. About 36 hours later, Lehman Brothers collapsed. So there went my, you know, corporate lawyer. Trajectory and you know, wheeler dealer in the M and A space, but stuck around in law for a couple years and around 2010, the rise, that was a very significant chapter of startups, right? We're kind of exiting the social networking, you know, Facebook, you know, Twitter, Ascendance. Right. And we, we are now fully into mobile apps and sort of in that like max growth disruption, Airbnb, uber, you know, 15 years ago, seems like it was 50 years ago at the same time and also maybe not that long ago, but yeah, pivoted from law because I think there was a great affinity one with what was happening in venture capital and entrepreneurship, especially in New York where we're based, where you had Silicon Valley and then we're kind of Silicon Alley. It was small, tight knit, like meetups were huge, like going to demo days. There was a lot of excitement and our first foray was actually in gaming. So we did a small gaming startup that essentially riffed on what Zynga or Facebook were doing with things like farmville and cityville. We brought that to mobile. That got a good amount of attention. We sort of cut our teeth in technology, venture capital, entrepreneurship, data, data science, product, user experience. And we managed a gaming company for a couple years. We exited company and then, you know, a year, 15 months or so into that, we said, look, gaming is fun. What's kind of toy aisle of life, like let's go for the big swing, like let's go for the whole store. And that's to us what E commerce was, right? So warehouses, fulfillment, pick pack and ship, last mile logistics, like you name it, that's what's involved in E commerce. And that's what boxed was. And we said, look, people are going to look for convenience, they're going to look for savings. Your time really matters. People are just going to want to look through Gilt Group, Amazon, right? E commerce was there. But as far as buying consumables, that was very, very nascent. We thought there was a, definitely a demand for cpg. So we said let's take what we learned in gaming and user experience and mobile interface and intuitive design and experience. Bring that to the boring stuff, right? So not fancy clothes, not a flash sale on a new bomber jacket from Gilt. We're doing cereal, rice, you know, all the, all the boring cpg, hand soap dishes, sanitizer, Kai detergent. But the beauty of that was we're now not in charge of the merchandising. Like you know, these, you know what a Cheerio is, you know, if you want it, you Know, a Ziploc bag. So we essentially just focused on the fulfillment, last mile delivery and the customer experience. And then we found ourselves, you know, shortly there competing with, from the legacy players standpoint, Amazon, Costco, Walmart, that's a difficult challenge. Then of course from the new up and comers, Instacart was the big one. And so we try to find our product market fit, saying Instacart is doing great, we love what they do, they're very strong and what can we do that's different? And then we focused on centralized fulfillment, bigger baskets, B2B in the rural experience. And then it was just a whirlwind from there as far as having to work in a low margin business, taking an inventory position, operations, just making sure we were as efficient as possible and using technology to deliver the efficiency and of course enhance the customer experience.
- [04:56]
A
So that ultimately grew. Again, I only have 2020 data from the S1 187 million top line, but the gross profit was 25.9 million because obviously your cost of goods sold as you got to move the merchandise. Right. So was that a good margin profile back then? How did the spac, how did the S1 out of the, the public filing go?
- [05:12]
B
I would. So if I were to pull my young self aside, I would say a couple of things. Don't try to compete with Walmart, Amazon and Costco, or if you're going to do that, you need to put $2 billion on the balance sheet and you need to make that like a 10 year journey. So we're slightly under capitalized to bite off like that. Big of a challenge admittedly. And then also I'd probably say, look, this is the greatness of Shopify and D2C and at the same time the rise of D2C. Right. You know, look, we all like our legacy brands. You should see me in high school with my Abercrombie Fitch. Right, but that's high margin stuff. Right. We're selling low margin grocery, trying to bring it into digital, trying to drive loyalty partnerships. So inevitably, I think the best we did, we did have a profitable month. So it's like a giant feather in our cap. But if we were to hit a 4 to 5% contribution margin, that was a big win and that was pushed by every, every lever we could possibly pull from vendor marketing. So at the time you'd have to think like Procter and Gamble, Unilever, General Mills, Kellogg's, like they were looking at this E Commerce thing and they were like, okay, how do we get a part so we built tools and we built experiences and we really enabled and supported them to help drive incremental margin of visibility to our product. And that took us from very much a loss losing negative contribution margin profile to a positive in the 4 to 5% range contribution margin which was really focused on people willing to pay a little bit more, pay a delivery fee, they pay a membership fee to get that extra convenience of putting those products. The boring stuff that you don't want to trudge home, you don't want to throw it in your trunk, drag it home, drag it to your doorstep, right? We're putting it on your doorstep. People pay a premium and we're able to eke out a, a 4 or 5% contribution margin.
- [06:49]
A
And Jared, a lot of people like even today are playing this game, right? Raise as much capital, go as big as you can ipo and then you'll just say, you know what, I'll make a lot of money when we ipo. How much equity did you own when you guys went public?
- [06:59]
B
I was fairly diluted down. Maybe that's something that's relevant. I love the way you bring that up because I would actually slightly push back or just enhance that by saying I feel like we're exiting that era of growth at all cost. And we saw that, right? I don't want to, I'm not saying names, I'm in a wework, maybe I'm saying that name. But there's definitely that growth at all cost era from that 2011 to say like 2015 space when people, people waiting for like what's the next evolution of startups going to be, right? And I think we were waiting for virtual reality, we were waiting for crypto, we were waiting for self driving cars, we're waiting for the metaverse, like all these things that didn't really come until 2022 in my opinion. My little book on startups, when OpenAI launched with 3.5 chat GPT that essentially to me like drag forward like 6 years of startups. But at the same time to me it sort of closed the chapter on growth at all cost. You know, bring in maximum amount of capital, burn cash, spray and pray. Just try to figure things out as you go. Fail fast, you know. You know, close down a $50 million P&L or business unit, right? I think that era is a bit by and gone, but I think yeah, when I, when we IPO'd, I was down as a startup or as a founder to single digit percent, low, low percent, single digit percentage. But that was okay because we Love the challenge. We enjoyed building the technology. We, we really enjoyed the momentum we had with our partners and growing the business.
- [08:22]
A
But as I sit here today, you
- [08:23]
B
know, maybe relevant for some of the founders is I feel like we're almost in like Pete bootstrap era, right? Capital efficiency, do more with less, you know, leverage AI to be maximum efficient in that 12 years ago approach at, you know, growth at all cost and burn VC cash. I say it's a little bit in the rearview mirror.
- [08:39]
A
We're looking right now at the S1 filing, the key ownership percentages. It looks like you're at about 1.7 million.
- [08:44]
B
Yeah, yeah.
- [08:45]
A
You're about 2.6%. How much equity had you guys raised up to this date?
- [08:48]
B
Yeah, I think it was around 3, 3 80.
- [08:51]
A
$380 million.
- [08:52]
B
Yeah. Yeah, we raised our first $100 million round in, I think December of 2015.
- [08:59]
A
Guys, remember, I am not just a YouTuber. I'm investing in my third fund. We've deployed $250 million into 550 software companies so far. Again, @founderpath.com if you're interested in capital, I would love to cut you a check because I know you're investing in your education. You watch my show. So sign up@founderpath.com and when you get the onboarding email, I reply. And I see all those, just reply and say, nathan, I found you through YouTube and I'll make sure to prioritize you. I would love to cut you a check. Check out founderpath.com well, so Jared, I have to ask because again, so many founders get stuck in this trap. Did you take. I mean, I care about founders building personal wealth, building companies they love with customers who they love backing. If you don't take money in the early rounds, you end up really stuck with no way to actually personally get liquidity. Did you take any secondary early on or were you sort of screwed at the end?
- [09:44]
B
Yeah, so I don't want to lose any listeners. Don't follow Jared's model. Well, if possible, learn from Jared. So, look, we enjoyed the ride. I'm a tech guy, data guy, like building technology products. But we took pretty much all of the capital that we brought in and we deployed it for growth and expansion. And then also, you know, when you're being really honest with yourself, it's like, well, how do you put a dollar amount to the learnings that I have, the team that I've sort of built around me, the network that I've buil, the relationships that I have? And you can tell I'm sorry I didn't come super suited and booted and dressed up, but I'm pretty no frills guy. So I would love to give advice, like to the audience and say, don't do the move of like founders eat last. I also think that's old and antiquated. Like, you have to understand your worth. And there's a lot of thoughtful people out there that say, like, look, if you're showing a certain amount of P and L, or you're showing your. Let's, let's take a smaller startup, you know, maybe more of a bootstrap company and it's, oh, we're cash neutral or we have a, you know, 5% EBITDA or whatever it is. Oh, but the, the leadership is taking zero salary. Well, you're still unprofitable, right? So let's not play those games. And of course we all understand the mental stress that goes into it. People that have families, you have college tuitions to pay. But I definitely think, you know, going forward, the pendulum is sort of swung, I would say, in favor of founders. There are mechanisms out there. Secondary is a great one to say, like, hey, give what your worth is so you can focus on growing the business and not having to refinance your home or borrow cash from insiders or whatever the, whatever else we've been doing for the last 20 years as entrepreneurs, hopefully people can take a little bit of a lesson away from that.
- [11:16]
A
So Jared, just to sum that up, one word answer, if you can. Many people would look at box and say, Jared was a co founder. He grew it to hundreds of millions of revenue. They raised 380 million total. Surely he made more than 10, 20, 30 million bucks on this company. But it sounds like that was not the case. Is that accurate?
- [11:31]
B
Yeah, it was not the case. But look, man, I love networking. Like, let's hang out, I'll pick up the tab, don't worry about it. I think also part of it is you have to believe in yourself and you don't. And not to go a cliche on you, but like Pennywise, pound foolish and things like don't let a dime hold up a dollar. You don't want to make short term decisions if you feel like it can pay off in the long run. I wouldn't recommend anyone sort of manages it the way that I did, but at the same time, you have to sort of look at it holistically as far as the experience you're getting, the teams that you're leading. I was able to bounce around from leading merchandising, customer service, leading tech teams, leading operations, like, I pretty much saw everything. And to say, if you think about your future earnings as you can stay healthy, right, let's get the mental and the physical stress out of it so you can stay a healthy person. That in the long run, I feel like I've probably monetized more than trying to cash out for X amount of dollars based on what was a unicorn public company that I was on the. On. On the board of. But, you know, so less about the monetary dollars where possible. I'm a different situation a lot of other people, so I wouldn't want to dissuade anyone from saying, no, I need to be taken care of. I'm worth this, so I deserve this. That is a very fair approach.
- [12:39]
A
There were many years where you guys, from a net income perspective, lost more than $30 million. Did you ever consider shutting the company down?
- [12:45]
B
Look, sorry, that was tough to. Tough to rehear. Yeah. So look, it was growth, lots of learnings, inefficient marketing. I feel like we. We marketed towards the customer. We wanted to be a boxed customer versus the customer who actually was. That creates marketing inefficiency. You know, we had a lot of success with rural customers. You know, a lot of people, maybe they were into junk food and things like that. You know, this is many, many pre Covid.
- [13:12]
A
Right.
- [13:12]
B
Many years ago, maybe less focus on health than we are now. But I think there was a lot of experimentation in, in marketing. A lot of also just startup efficiency. You know, we built a robotics unit that like worked and was successful. But we were buying Nvidia before. Nvidia was like super cool. We were buying jets and gpu, so expensive things that you would do to kind of, you know, be a player in startups that, you know, there was a lot of learnings from. And of course, if with a different approach, that would say we are in now, definitely more capital efficient. But yeah, definitely there was an excessive burn rate and the best we could do is apologize to the, to the VC somewhat and then also learn from it.
- [13:49]
A
Jared, there's a lot of folks saying, look, software, anyone can build it now. It's hard to compete. Go back into the old school, like unsexy stuff. There's people pivoting. You guys in 2021, while your re. Your retail revenue decreased by 26.7 million bucks in the first nine months of 2021. You guys had a bright shining star though, as you pivoted to some software which contributed about 15 million revenue. And you're now obviously doing exclusively software. We're going to jump in a second. Just help me understand though internally, what's it like to move a $180 million revenue ship from low margin retail sales to higher margin software sales?
- [14:20]
B
Yeah, I don't think we quite got there. So it is difficult as far as making, you know, turning around the Queen Mary in the harbor. You know, there was investors, right, that you know, bought into the spac, right into the deep, into the go public process. Debt providers in a thesis, right, that they need to be accountable to their investment committees, to their LPs, was like, this is a retail business. This is going to be the Gen Z millennial version of a Costco. It's going to be, you know, E commerce enablement and convenience and essentially like an Instacart meets Goldpuff. And we're going to be right there with them. So you can't just say, oh hey, at the next board meeting, hey guys, change in strategy. We're now just going to be a software company. However, I do feel like we built some of the best e commerce software in the world. You know, I'd be very humble about many things, but I will definitely believe that the E commerce platform that we have is very competitive with anything Doordash, Instacart, Walmart, like you name it, we have that level of technology platform. It's just more difficult than you would think to sort of pivot that story to a software story. But that's what Espresso is today, right? Takes time, but we've really skinnied up. We've built with our partners and I would just say we have a retailer, top 20 retailer in the world. They looked at everything, they looked at using Amazon, Rakuten, local providers in house solution and they chose the Espresso solution because they did see that it's a superior software platform. But it's not an overnight transition and I would say we're probably in year three of making that transition. So it definitely takes time.
- [15:45]
A
Well, let's close the door on Box then go into Espresso all in the box Story is you raise 380 million bucks of external capital, you go public, you do hundreds of millions of revenue, but then on April 2, 2023, you guys file for Chapter 11 bankruptcy. There's you then obviously move into Espresso. Walk me through the bankruptcy and the pivot into Espresso.
- [16:04]
B
Espresso, yeah, yeah, bankruptcy. I will probably get this wrong. Everyone can fact check me, but for some reason I think it was Mark Twain that says bankruptcy happens like super, super slow and then all at once. And that's exactly what I saw. So we did go public via a spac. So we were kind of in the public markets maybe over our skis a little bit, not fully ready to be there. Whether that's from a, a KPI standpoint, growth standpoint or just fundamentals standpoint. So that created a very turbulent 2022. You then touched on the extra complexities, right, as we believe that hey, the software business is the future. We're not going to be able to out supply chain, out trucking, out logistics, out warehouse, you know, Walmart and Kroger and the major retailers in the US Especially with consumables. But we still feel like we can, you know, out technology them. So trying to make that transition was difficult. And then, you know, as I mentioned and it was something that was like slow, slow, slow, breach of covenant, you know, forbearance on the covenant and the promises. Oh, it's looking, you know, not so hot for us. And then in 2023 it was like so, so slow and then boom, all at once. And then we spun out Espresso as the new co, bringing over like the ip, the technology team and of course the major partnerships to sort of give us that fresh start. But yeah, I would, I would say it's a giant learning experience, but one of the few learning experiences that you really appreciated, you know, you had to go through and it makes you tougher, it adds skills, but you never want to do it a second time. So that would be my.
- [17:28]
A
In the post mortem there's a lot of folks said, yes, all the things you just said are true. But the big, the final nail was, was actually right around the Silicon Valley bank collapse because you guys had the majority of your cash deposits and liquid assets there and that just made it really hard for you guys to try to get out of the covenants. Was that true or not?
- [17:42]
B
Partly. I would never sit here and tell you or your audience that oh, it was because of svb, you know, we had our own fundamental issues that we were working through and dealing with. But when you just kind of like sit back and say like, oh, I, I think there's a higher power talking to us or like we're getting signals, it's like that is like, oh, that's like the last straw that we could not really deal with because yeah, sure, that could have been, you know, a fifty million dollar bridge loan or something like that that could have seen us through and like that avenue was closed. But, you know, pretty impressive how SVB has turned it around. I would bank with them again. Timing, you know, a lot of things come down to timing. So it was definitely not SVB's fault, but we were caught up. I was not knocking on that. I remember like people were rushing to the bank, like, you know, trying to pull funds and all the investors and all the board members are like picking up the phone. And you know, it wasn't that chaotic for us, but it was just like another signal of like, wow, this is an uphill battle and I just don't know if we're going to be able to get through it.
- [18:34]
A
All right, how do you spend espresso? A high margin, promising SaaS tech business. You're licensing to major e commerce brands like a on how do you spin that out of box in a clean way? And what was revenue espresso when you spun it out?
- [18:46]
B
Yeah, so I will. And again, we had great advisors, great lawyers, smartest people in the room, like that whole thing. But there was definitely a feeling. And also working with partners like, you know, who we host on servers. And I will say one thing we're super proud of was we had no downtime. Right. So you're going through a restructuring. It's like, who's paying the server bill right now? Like, does the website still load? So we were able to navigate that and I think that was like a giant win for us. But despite having the smartest people in the room, heavy, you know, high horsepower legal teams and advisors, it felt like we were writing the playbook versus like following a playbook. Like following a playbook. Like, hey, look, it happens. Public company, back to private. Chapter 11 Delaware law solidified this for, you know, half a century or more than that. And here's what you need to do. I felt like we kept running into situations where we weren't just like adopting a playbook, we were writing the playbook, which add extra. Added extra complexity for sure. But we were able to maintain uptime, maintain our service levels. I think we're super proud about that. Of course, as a company, we're a worldwide company with a strong technology team. You know, all. All throughout the world.
- [19:46]
A
Right.
- [19:47]
B
We need to provide 24. 7 service. So for us to be able to, you know, maintain the customer experience that we're obligated to without any downtime or major issues was hugely important. And then we sort of brought through, I would say around two and a half million of ARR in early 2023. And then, you know, again I mentioned, you know, we were in charge of warehouses, warehousing technology, fulfillment technology.
- [20:09]
A
Right.
- [20:10]
B
We did open up some capacity to take on a projects and that really motivated the team. Right. We had to keep the team motivated, committed, excited, excited about what they're building, excited about the vision of what Espresso would be now as a much different, you know, espresso than the public company box. So we were able to land a few deals with major brands and logos there right when that transition was happening. I think that was sort of the glue that kept a lot of things together.
- [20:34]
A
Jared, but your story is unique, right? I mean most people have a co founder they split equity with. I mean I'm sure that the company didn't just give you 100% of the spin out espresso with 2.5 million of AR just for free. Right. Are the, is the parent company still on the cap table? Like how did you actually get it structured?
- [20:47]
B
Yeah, so the, essentially the parent company, the SPAC acquirer, like that whole thing that you would see in the S1 that really all went away, like went to trustees, like all this very difficult Chapter 11 restructuring. However, the only reason the spin out happened was credit to BlackRock. So BlackRock had put in a debt instrument into the IPO process. BlackRock believed in the team. They believe the technology, the relationships that we have built. So working with our number one customer, right, we had to make sure they were on board. That's eon, as you mentioned, making sure BlackRock was comfortable. They facilitated the spin out. And then it's been in that next couple of years. We work with BlackRock very closely on setting up like a new cap table, new ownership structure, debt structure and all that. And we're still kind of working our way through that as we sit here today. But you know, luckily for us I think we've made it through the worst and the technology is going well. I think customers are happy, we're growing and we're very excited about what the future is for us.
- [21:39]
A
How many customers are you guys serving now today?
- [21:41]
B
About 15.
- [21:42]
A
15, okay.
- [21:44]
B
Yeah, but that from say 20,000 ARR to x amount of millions of ARR. So it's, it's a pretty giant kind of bell curve there for.
- [21:54]
A
So it's fair to say you have customers paying you more than 2 million per year.
- [21:58]
B
Yes.
- [21:59]
A
That's incredible. Okay, so how do you price, what do you price against? I'm going to share the screen here where we. So as you talk about this, people can see your product, but how do
- [22:04]
B
you price Yeah, I mean there's learnings there. I think a lot of SaaS people don't now feel like they never get their pricing correct. I think I listened to a podcast from the Zapier team and they're like our pricing literally from like the free tier to the, you know, user tier to the business tier to the enterprise tier was like the Fibonacci sequence. So I don't know if any really SaaS founder is ever fully satisfied that they priced correctly. So we've tried to learn there, do and simplify it, but we've gone from you know, implementations also like a modular approach where say our grocery experience Costs x, the B2B experiments cost y and then a market market marketplace experience cost Z and then of course we get monthly subscriptions. So there's definitely a lot of variance there. But it's not as simple as you might think. Is just saying like hey, it's X amount of dollars per month. It really goes into. We want to deliver the best platform for the customer and their needs and also their expertise and their feedback, you know, from their end consumers. So that goes into discovery, making sure the platform is the best for them and then we can sort of scale it up from there or scale it down as necessary.
- [23:03]
A
And so how have you scaled since 2023 with 2.5 million of ARR, are you comfortable sharing where you guys finished 2025 in terms revenue?
- [23:10]
B
Yeah, it's about double.
- [23:11]
A
Oh wow, okay. I mean are you happy with that?
- [23:13]
B
Ah yeah, you're never happy. It could always be better. And I would say there was advantages there because some of the conversations that led to that increase in ARR have been pre existing. So it, you know, that wasn't like starting fresh and clean or from scratch and you know, diving for dollars or picking up phones like there was using networking, founder LED sales, like a lot of tactics. We were able to sort of get a lot of conversations over the hump to sort of hit that next tier of growth grow.
- [23:35]
A
And I'm obviously, you know, I run a debt fund so anytime I have the opportunity to talk to an early stage founder like you about debt, I do it. Can you tell me how you structured debt on this business with 5 million ARR? Is it a term loan, is it a 13 interest rate? Are there warrants? How do you structure it?
- [23:47]
B
Yeah, could be a modest amount of warrants with the relationship. But with BlackRock, here's what I do. My super, you know, basic target would say to keep the debt or keep the leverage less than 10% of ARR and then 10% had sort of been our standard interest rate. And that's something that actually sort of came from blackrock with warrants.
- [24:07]
A
Right, Jared?
- [24:07]
B
Yeah, warrants should be in addition to. To that. So another single digit. Yeah, an. An equity position of. And again, less than 10. But in warrants, in addition to the debt, also under 10.
- [24:19]
A
So to sum all that up, you're at 5 million of revenue. You keep your leverage under 10 of revenue. So you have less than 500, 000 of debt on the balance sheet today. That way that debt is structured is about a 10 interest rate. But. But the lender also has under 10%, sort of an equity position in the company as well.
- [24:33]
B
Yeah, that's exactly correct. Said much more succinctly and better than me. And then also with our enterprise contracts, they tend to step up year over year, so that helps us sort of keep the leverage down. And then I think we're in a really good position now to think about bringing in extra capital for growth. We think we're humming along. We worked on some major projects. They're performing very, very well. We're seeing the fruits of that labor and those initiatives with our customers, you know, beating targets in 2025, which is an incredible achievement in E commerce. It's not that easy to surpass E Commerce targets. So, yeah, that definitely has us thinking like, hey, back to that question. It's great to have a leaner balance sheet, but we don't want to also leave growth and leave ARR and opportunity on the table because we aren't investing in growth. And just to kind of tie it together a little bit, you mentioned how difficult like that restructuring was, or going from a retailer, operator, warehouse supply chain company to a pure software company. There's about 18 months of heavy engineering work to make the platform leaner, skinnier, you know, skinnier infrastructure more deployable. What used to take, say, four months to deploy a platform is now down to like four weeks or less. So now we really want to benefit from, you know, all that extra effort to make the platform as accessible as possible and make the iteration as fast as possible, because things are moving quickly and customers are demanding more and, you know, everyone wants AI on the platform. You know, everything that goes with a better shopping experience, we want to move quickly. So taking in an extra amount of debt, perhaps tripping the 10% boundary, just something that's the job of the leadership team. Right. Is that the right decision to make,
- [26:07]
A
Jared, wrapping up here? If somebody offered you 10x your ARR so 50 million, all cash upfront. Say to buy the business.
- [26:13]
B
Do you sell? Yeah. Do you have their phone number? No. You know, so I exited a company via M and A and through ipo, through public market markets. You know, a lot of it is in the details of the other terms. I would say that sounds a bit frothy to be honest. Like we want to get actual financial information to people. I would say more to ARR, probably more like the 6 or 7 range. And then it's really just about, you know, what level of participation, what's the gtm, what's the growth plan? Like, who are we calling next? Where are we deploying? We'd love to expand to Europe. We'd love to dominate emerging markets. So there's a lot that goes into it because again, like I mentioned rate at the beginning of the call, you know, it's really not always about a monetary outcome. A lot of other things we could do if we just wanted of the monetary outcome. But I would probably caution people that in our business, a certain type of business, the multiples, probably more in the six or seven range.
- [27:03]
A
Guys, there you have it. Jared. Ye, man, check him out. Espresso AI cut his teeth back at Zynga. Left Zynga, launched a little app in the gaming world. Said let's apply gaming to like Walmart. Basically launched Box.com in 2013 trying to compete with the big dogs. Margins were tight, but they grew top line. It looks sexy. 2020 finished off with 187 million top line but only 25 million of gross profit. So tight margins. They lost about 34 bucks that year. Ultimately though, did have a successful IPO via SPAC. They tried to grow it, but they just could not get the margin profile to work. Ultimately shut that down. Filed for Chapter 11 bankruptcy around 2023. But a bright spot in that company was the software component. Jared then took hold of that, spun it out, partnered with BlackRock in 2023 with 2.5 million bucks of ARR. Now fast forward to today in 2025. We just wrapped 2025. Over 5 million bucks of revenue. Scaling nicely. They've got 15 customers ranging from 20,000 bucks a month all the way up to 2 million plus. So clear enterprise motion here will be fun to watch them scale. Follow along at S P R E S S O AI. Jared, thanks for taking us to the top.
- [28:03]
B
Thanks a lot, Nathan. Appreciate the time.
- [28:05]
A
You won't believe this. CEOs revenue. Click here to watch the next episode. Right now.