Private Markets, Angel and Secondary Investing, Sacra

Sacra

Private Markets, Angel and Secondary Investing

Bringing transparency to private markets so investors, founders, and employees can build on conviction. Sacra delivers deeply researched insights on the private companies shaping tomorrow's markets. By surfacing the data, context, and operator perspective that are missing from private markets today, we help secondary buyers and sellers price equity accurately and unlock liquidity for the people building these businesses.

Private Capital Markets

<ul><li>Historically, startup founders have struggled opening bank accounts and getting credit cards—particularly without giving a personal guarantee.</li><li>In 2018, Brex launched a credit card for startups and hit 1,000 customers in 5 months underwriting cash in the bank, not historical financials, with 10x the credit limit of American Express and no personal guarantee.</li><li>Today, Sacra estimates that Brex is at $400M revenue, growing 67% year-over-year and doing $17.5B in annualized transaction volume, last valued at $12.3B or a 31x multiple to current revenue with 50,000+ customers (~40% of U.S. startups).</li></ul>

Historically, startup founders have struggled opening bank accounts and getting credit cards—particularly without giving a personal guarantee.In 2018, Brex launched a credit card for startups and hit 1,000 customers in 5 months underwriting cash in the bank, not historical financials, with 10x the credit limit of American Express and no personal guarantee.Today, Sacra estimates that Brex is at $400M revenue, growing 67% year-over-year and doing $17.5B in annualized transaction volume, last valued at $12.3B or a 31x multiple to current revenue with 50,000+ customers (~40% of U.S. startups).

<ul><li>In opposition to incumbent 401(k) providers like Fidelity/Vanguard charged savers 1%-2% of assets under management (AUM), TaskRabbit co-founder Kevin Busque founded Guideline ($80M ARR) in 2015—as an employee-centric 401(k) benefits companies could use to attract talent.</li><li>Guideline’s business model shifted the burden of paying for benefits from the individual to the company—with a flat monthly SaaS fee, a $8 per/mo charge per employee, and a nominal 0.08% take rate on AUM.</li><li>Zooming out, Guideline’s opportunity from here is large—all U.S. 401(k) plans held $7.3 trillion in assets, and Guideline has roughly $8.5B on the platform, or about 0.1% of that 401(k) total.</li></ul>

In opposition to incumbent 401(k) providers like Fidelity/Vanguard charged savers 1%-2% of assets under management (AUM), TaskRabbit co-founder Kevin Busque founded Guideline ($80M ARR) in 2015—as an employee-centric 401(k) benefits companies could use to attract talent.Guideline’s business model shifted the burden of paying for benefits from the individual to the company—with a flat monthly SaaS fee, a $8 per/mo charge per employee, and a nominal 0.08% take rate on AUM.Zooming out, Guideline’s opportunity from here is large—all U.S. 401(k) plans held $7.3 trillion in assets, and Guideline has roughly $8.5B on the platform, or about 0.1% of that 401(k) total.

<ul><li>We have approximately 40,000 customers on our platform, and we've been filing the required forms since year one.</li><li>Guideline services small businesses, with 92% of our clients having never had a 401(k) before.</li><li>Now, we have over $8 billion on the platform, which is significant.</li></ul>

We have approximately 40,000 customers on our platform, and we've been filing the required forms since year one.Guideline services small businesses, with 92% of our clients having never had a 401(k) before.Now, we have over $8 billion on the platform, which is significant.

Kevin Busque And Steven Wu, CEO And CFO Of Guideline, On The 401(k) And Payroll Ecosystem

<ul><li>We talked to Immad to learn more about Mercury's business model vs. that of a Silicon Valley Bank, how Mercury thinks about its ideal customer segment, and how Mercury is set up to be more fault-tolerant than SVB.</li><li>Currently, we have two partner banks, Evolve Bank & Trust and Choice Financial Group, and plan to add a third by the end of the year.</li><li>We believe in building a long-term sustainable company.</li></ul>

We talked to Immad to learn more about Mercury's business model vs. that of a Silicon Valley Bank, how Mercury thinks about its ideal customer segment, and how Mercury is set up to be more fault-tolerant than SVB.Currently, we have two partner banks, Evolve Bank & Trust and Choice Financial Group, and plan to add a third by the end of the year.We believe in building a long-term sustainable company.

Immad Akhund, CEO Of Mercury, On The Business Models Of Fintechs Vs. Banks

<ul><li>Pilot (dataset) has hit 60% gross margins acting as human-in-the-loop middleware between the SMB finance stack and the bookkeeping system of record in QuickBooks.</li><li>Sacra estimates that Pilot has $43M in annual recurring revenue (ARR) growing 30% year-over-year with industry leading gross margins at 60%.</li><li>Every SMB needs bookkeeping and accounting and today they spend some $60B/yr on it, meaning Pilot today is a leader with only 0.4% penetration into a massive opportunity.</li></ul>

Pilot (dataset) has hit 60% gross margins acting as human-in-the-loop middleware between the SMB finance stack and the bookkeeping system of record in QuickBooks.Sacra estimates that Pilot has $43M in annual recurring revenue (ARR) growing 30% year-over-year with industry leading gross margins at 60%.Every SMB needs bookkeeping and accounting and today they spend some $60B/yr on it, meaning Pilot today is a leader with only 0.4% penetration into a massive opportunity.

Pilot: The $43M Per Year Mechanical Bookkeeper

United States

API for fintechs to access and enrich consumer-permissioned bank account data

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Plaid (PLAID US)

Brex: The $400M/year anti-Amex

Brex and Ramp are the PayPal and X.com of corporate spend—competitive with each other, but more importantly chasing the bigger prize of disrupting...

Sacra

Guideline: The $80M/year 401(k)

Gusto, Rippling and Deel have turned into app stores for HR, benefits and finance, both enabling new companies through the access to clean payroll...

Sacra

Kevin Busque And Steven Wu, CEO And CFO Of Guideline, On The 401(k) And Payroll Ecosystem

Sacra interview with Kevin Busque and Steven Wu, CEO and CFO of Guideline.

Sacra

Immad Akhund, CEO Of Mercury, On The Business Models Of Fintechs Vs. Banks

Sacra interview with Immad Akhund, the CEO of Mercury.

Sacra

Pilot: The $43M Per Year Mechanical Bookkeeper

TL;DR: Pilot ($43M ARR) has hit 60% gross margins acting as human-in-the-loop middleware between the SMB finance stack and the bookkeeping system...

Sacra

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