Revi is a POS platform and SaaS tool that retail and restaurant businesses can use to increase revenue through purchase data and consumer relationships. The company has grown quickly since its founding in 2017, reaching $15m gross merchandise value (GMV) in 2021, tripling the previous year.
Revi at a glance:
- $15m GMV in 2021, tripling GMV year over year
- $1.1m ARR through 1% transaction fee on all sales through Revi terminals
- Revi is free to customers; typically recoups its customer acquisition costs in 3-4 months
When asked how he would describe Revi, founder and CEO Eugene Johnson stated that Revi is like a POS system on steroids: Revi facilitates transactions like other POS terminal solutions, but instead of stopping there, Revi leverages transaction data in a way that’s similar to an e-commerce process. Revi drives customers back through the door or encourages them to spend more. Crucially, Revi handles much of this customer engagement automatically, freeing business owners to focus on operations, not marketing and promotions.
Latka sat down with Johnson to learn more about Revi’s service model and growth trajectory.
How Revi Reached $1.1m ARR Despite Offering Hardware and Setup Free to Customers
In 2021, Revi reached 1.1m ARR with just 150 customers, despite offering the POS hardware and initial setup to customers at no cost. Setup costs are minimal (shipping and staff salary, essentially), but hardware costs are not, ringing up at $500 per terminal. So how does the company make this work, with no upfront hardware costs to customers?
The answer is relatively simple. Revi charges a variable transaction fee (typically around 1%, with some variation depending on type of business and scale of sales). Initial setup and hardware costs land around $500. Through the transaction fee, Revi recoups this customer acquisition cost in three to four months on average.
The company also offsets some of the cashflow implications of this model through lease agreements with hardware partners (Apple for the screens and a Chinese manufacturer for the mounts).
$1k ARPU Reflects a Range of Small Business Monthly Revenues
When asked about monthly take from the typical small business customer, Johnson reported a typical range of $500 to $3k in monthly revenue per customer. As a sweet spot or average revenue per user (ARPU), Johnson pegs Revi at about $1k in ARPU.
$1.4m GMV in December 2021, Growing at 15% Month Over Month
Revi processed $1.4m in GMV in December 2021, up from $1.1m in November. Asked about the trend line on that growth rate, Johnson reports growing at upwards of 10, even 15%, month over month over the past year. Roughly 1% of that figure comes back as revenue for the firm, serving as the primary driver of revenue figures discussed here.
$15m in Annual GMV, Roughly Tripling GMV Annually Since Launch
Revi’s current offering was launched in January 2019, extending the company’s focus on marketing through purchase data and consumer relationships to include the purchase process itself. Since that relaunch, the company has grown from $2m in GMV in 2019 to $15m in 2021. 2020’s figure was $5m, not quite tripling the launch year.
That dip is easily explained when considering that Revi’s primary market is restaurants, which took a significant hit due to the initial COVID lockdowns in early to mid-2020. Adjusting for COVID, it’s fair to describe growth in annual GMV as growing at roughly 3% year over year.
$4m in Seed and Pre-Seed Funding
Revi has thus far been through two rounds of funding. First was a $1m pre-seed round of funding in Jun 2019. In June 2020, the company raised $2m in a seed round, at a valuation of $15m. At the time of the seed round funding, Revi was generating just $30k in MRR, a figure that the company has since tripled to $90k.
As far as equity, through the funding thus far, Johnson has retained around a quarter of the company and has structured another 25% as an ESOP for his team. Investors have roughly 50% equity at this stage.
Team Size of 20 (13 Full-Time) Keeps Operations Lean
As an early-stage company, Revi has managed to keep operations lean. When asked about team size, Johnson stated that Revi has 13 full-time employees at present, of which five are engineers. The company also employs five to seven part-time workers.
Despite COVID Losses, Revi Held Gross Annual Churn to 34%
With a market of almost exclusively small business restaurants, COVID was bound to increase churn rate. When asked about churn, especially in light of the company’s target industry and the pandemic’s effects, Johnson said that impacts to churn rate were less significant than the Revi team feared they would be.
Including losses tied directly to COVID (including customers whose businesses did not survive), Johnson reports an average monthly churn of just 2.8%, or just shy of 34% gross annual churn. Strikingly, when COVID losses are factored out, the company reached 1% monthly or 12% (adjusted) gross annual churn.
Johnson believes the reason that most customers remained with Revi during the downturn is the value the platform delivers to its customers, which served as a lifeline during a time of industrywide crisis. Better analysis of purchase data provided customers with improved insights that fueled better decision-making. Revi’s automatic campaign generation also helped businesses without sufficient marketing capacity to continue driving repeat traffic and adjusting to consumer needs and wants.
145 Customers and Scaling Rapidly
Revi’s customer base as of December 2021 was 145 restaurants. And, as noted earlier, the company is nearly tripling its revenue — and thus its customer base — yearly. If this growth pattern remains steady, the firm could approach 500 customers by the close of 2022.
By providing superior, data-driven consumer engagement products like order ahead, self-service, QR codes, and CRM management tools, Revi gives restaurants better insights through POS transaction data. Revi takes this commitment beyond the POS terminal, increasing engagement throughout the purchase journey, helping restaurants increase profitability, decrease operational expenses, and give the customer a simple, personalized, connected, and rewarding experience.
The future for this young company looks like continued growth and scale. Johnson believes that as COVID pressures wane and the restaurant industry further stabilizes, digital tools like Revi will be the crucial catalyst for successful restaurants, even the difference between growth and failure.
