MYR POS provides an intuitive point-of-service system for limited-service restaurants. At limited-services restaurants, also known as quick-service restaurants, customers pay before they receive their food. MYR stands for Master Your Rush, which is a critical factor in the profitability of limited-service restaurants. These restaurants must be able to take a lot of orders in a short amount of time. MYR CEO David Nadezhdin sat down with Nathan Latka on Nov. 1 to share information about the company’s founding, rapid growth, and future growth plans.
- The company was founded in 2017 and currently has 24 employees
- The average customer spends $129 a month
- ARR has grown from $576K to $1.4M in one year
Why Nadezhdin Closed Down An Agency Earning $2.5 M to Found An SaaS Company
Nadezhdin and a partner created the software that formed the basis of MYR twelve years ago when a local coffee shop asked them for software that would allow them to function as a large business such as McDonald’s or Starbucks did. At that time, Nadezhdin and his partner owned a digital studio that handled all digital sales and marketing aspects, including emotion graphics. They created a cloud-based POS system that mimicked the one these larger businesses used.
The agency grew and at times had 20 projects going at one time and employed 45 people. However, Nadezhdin realized he would burn out managing this number of projects and continually chasing after active capital. His partner also had an interest in founding a different type of SaaS company, so he and Nadezhdin parted. Nadezhdin bought the software they’d created from the client to found MYR.
What Makes the ACV $1,548?
MYR, based in Montreal, offers a pricing structure that allows restaurants to build their own plans starting at $79 a month depending upon needs. For example, a restaurant can have a basic $79 a month plan that includes three modules, one POS license, sales reports, technical support, terminal integration, and gift card integration. The restaurant also can add modules, including employee management, kitchen display, ingredient tracking, multi-location and franchise management, inventory, and mobile apps. Additional modules could run the cost up to $299 a month. The average customer, however, pays $129 monthly.
How MYR Hit $1.4M ARR
MYR sells to 400 different brands across 1,200 locations and most locations have two POS terminals. MYR gains revenue in three major ways. The first is through the monthly plan costs. The second is through taking a percentage of the general merchandise volume. The third is through the sale of hardware.
The company contracts with Apple and Bluestar only for the hardware. Typically, a customer will spend between $1,500 and $2,000 for a hardware setup and do a hardware swap every three years. Bluestar will do the POS setup, and MYR will make 40 percent on each hardware sale or about $800 per customer. So far, the company has made about $1.6 million on hardware setups. The hardware spread helps fund the SaaS business.
Why Churn Is Only 2%
The low churn rate of 2 percent annually is attributable to two main factors. The first factor is that the company’s software is intuitive; in fact, the company only needs two customer support staff members. Customers also commit to the product by buying the hardware, which also helps in retention.
How Valuation Has Grown to $25M
MYR has grown its revenues rapidly from $48K a month about a year ago to more than $110K a month now. The company also has a product that meets a specific niche. “No one seems to have what we have,” said Nadezhdin, based upon observations at trade shows. MYR offers the first POS solution to allow restaurants to fully bridge mobile, online, and regular ordering.
How MYR’s Staff of 24 Helps It Succeed
MYR currently has a staff of 24, which includes six sales staff. It also includes seven engineers in addition to Nadezhdin. Nadezhdin, 41, is a tech monkey. He has more than 15 years of experience and is intimately familiar with all aspects of a project, from concept to execution.
Previously, he was the founder and CEO of Sig.Num, a patented ECG breakthrough technology. He also volunteers as a mentor in the Founder Institute, the world’s premier pre-seed startup accelerator, and Humanitarian U, which provides training to humanitarians.
How MYR Has Raised $6.2M
MYR has previously raised $6.2 million in two rounds. The first was a $1.2 million seed round in May 2020 based on a $7.5 million pre-money valuation. “It was a fair round, and it enabled us to prove that we could either wind down and generate cash or raise more money and generate value,” he said.
The company chose to raise more cash to enable it to grow and generate value. The second round began Nov. 1, 2021, and is for $5 million. It is based on a $25 million valuation. Although other non-dilutive funding options might have been available, the most recent funding diluted the ownership stake of Nadezhdin and his partners.
Why The Partners Diluted Ownership to About 58% To Raise Money Now
For Nadezhdin and his partners, being able to raise money quickly was vital. “We just have a massive opportunity right now,” he said. “We have salespeople all over the country.” Also, the economic and competitive scenario makes “now the time to grow exponentially.”
When Nadezhdin founded the company, then called Koomi, he owned 90 percent of its equity. At the end of the seed round, he and his partners owned 75 percent, and investors owned 25 percent. Leading the seed round was Segovia Capital Ltd., a firm recognized for regularly investing in early-stage technology and software companies across North America. The company’s leadership rebranded after the seed round to become MYR and named Lester Fernandes, CEO of Segovia, to its board. The newest round dilutes ownership to 58 percent.
Will MYR Reach $62M in Sales?
To make investors happy, MYR will need to reach $62M in sales. This year, the company has exhibited phenomenal growth but would have to accelerate that growth to reach this target. Will they reach that goal, and, if so, when? Watching this company and this space will be exciting.
