An outside sales approach is typical in B2B industries where long-term contracts and relationship building are central to the sales cycle. A key task of field sales, or rather “face to face” sales, professionals who manage this cycle is to effectively understand their assigned region.
That’s where Badger Maps comes in, helping field sales people work and plan effectively. Badger Maps helps answer questions like “Where are the potential customers in my region?” and “How should I prioritize my efforts based on which leads are most likely to close?” In addition, the software platform allows reps to set their routes and schedules to plan sales meetings as efficiently as possible.
What is Badger Maps’ MRR?
With an ARPU of about $35/month and a user base of just under 7500, Badger Maps is doing around $260k in MRR for an ARR of about $3.1m in 2018. That’s up from 5500 users in 2017, yielding a 180k MRR and ARR of $2.2m (40% growth YoY). Employee count went up from 55 to 60 over the year, and logo churn sits at 3.5% monthly.
How did Badger Maps apply Venture Debt?
At 40% YoY growth with churn of 3.5% monthly, Badger Maps isn’t exactly what most VCs are looking for. Dealing with a VC would not have created a position of leverage for Badger Maps. Further, many well-known tech lenders (Silicon Valley Bank for example) don’t usually loan unless a business has reached a certain size or has the backing of a well-known VC investor.
However, CEO Steven Benson engaged Lighter Capital to raise 800k and fuel continued steady growth for Badger Maps. Lighter Capital is one of many SaaS venture debt firms that home in on short to medium term loans based on a multiple of MRR. In the case of Lighter Capital, the upper ceiling on a loan is 4x MRR, with a repayment structure that adjusts based on fluctuations in monthly revenue, presenting some protection for borrowers. The final monthly payment can be anywhere from 7-12% of MRR and total interest on the loan ranges from 15-30%. For CEOs savvy about negotiating potential loan-related covenants and warrants, venture debt presents a viable option to scale without giving up equity.