Biju Ashokan, CEO, and co-founder of SaaS real estate proptech Radius Agent, sat down with the GetLatka team to discuss the explosive growth of Radius Agent and why Ashokan believes the company can 5X this year. Ashokan explained how Radius Agent is becoming the Shopify for Real Estate agents, how he grew his social platform to 70,000+, the company’s three main revenue streams, and how his proof of concept in one state is setting him up for success across the country.
After graduating from Carnegie Mellon in 2008, Ashokan started developing SaaS proptech products. His vision was to create a software suite for real estate agents to make the entire buying and selling process easier for the agents and end consumers. In short, a Shopify for real estate. That vision helped Radius Agent launch in 2015 with $50,000 in pre-seed support from a top accelerator AngelPad. Fast forward to 2021, and Radius Agent closed 2021 with 200 agents in California with $2.2m in revenue. Their recent Series A funding of $13.1m is accelerating their expansion plans, as they target eight more states in 2022 and a 5X growth rate.
- 200 agents in California, expanding to 8 more states in 2022
- Team of 60, 15 engineers and 3 salespeople
- Planning for Series B investment in 6 months to accelerate even faster
Radius Agent Builds a Trio of Revenue Streams, doubles ARR in 2021 to $100,000
The Radius Agent model blends a subscription rate of $250 per month with a flat transaction fee of $1,000 per property and a 35% commission share from leads turned to deals. This multi-pronged revenue approach is primed to be replicated as Radius Agent expands from its California-only focus.
$50,000 MRR from 200 Customer Subscription Fees Expected to 5X in 2022
Ashokan explained that in 2021, the company averaged $50,000 in MRR from 200 agents paying $250 a month in subscription fees. As they track to expand to 8 new states in 2022, he expects that number to conservatively 5X. Overall revenue in 2021 hit $2.2m, as the current run rate hit $100,000.
Focus on Social Network Community-Building, now 76,000 strong
From the beginning, Ashokan focused on building a real estate agent community. He began testing different models back in 2015 and admits that it took 3-4 to get the social network right finally. Once he did, the Radius Agent social network of real estate agents exploded to over 75,000. He proudly explained that all of these current users are referrals from other agents.
Free Social Network Drives New SaaS Customer Base of 200 Agents
Ashokan explained that the agent-centric social network, which includes Facebook, Clubhouse, free academy courses, and a lead place, drives agents to join the paid subscription product. While each brokerage firm has its own internal social network, Radius Agent is open for all real estate agents.
10 “Live” Daily Webinars Drives New Customer Acquisition
New customers come from the community, explained Ashokan. The most successful tool is the “live” webinar that runs 10x per day. Ashokan explained that the countdown timer gives the webinar the Illusion of happening live when, in reality, the video is pre-recorded. Lakta questioned how prospects respond to this technique, and Ashokan explained that the sales team manages the webinar chat live. As a result, webinar viewers get questions answered on-demand, and it’s not unusual for the sales team to follow up with live calls immediately to interested prospects to convert them to subscription customers.
$2,000 CAC Delivers Positive ROI in 3 months
Radius Agent’s current CAC is a reasonable $2,000 according to Ashokan, which translates to a 3-month ROI. Ashokan plans to use their most recent Series A funding to add 100 new real estate agent customers per month as they expand to 8 new states this year.
Adding 8 States to the Real Estate Base of California
Ashokan explained that adding new states to the ecosystem is not costly but time-consuming as the company faces regulatory issues in each state to get licenses. He estimates that each state will take 60 to 90 days to acquire the necessary state licenses. Once that’s completed, his sales team will aggressively look to add at least 100 new customer real estate agents in each market.
Targeting 2,000 Agents to Close 8-10 Deals Per Year
As Ashokan continues to build out his dream suite of products, like Shopify for real estate agents, he eyes a goal of 2,000 active customers who are closing at least 8-10 deals per year. Radius Agent currently retains 200 subscriber agents in California alone, so the target is conservatively reachable.
Why Real Estate Agents? 4% Industry Churn, 3 Year Retention
Ashokan discovered that new real estate agents are wooed into the business of real estate because of how simple it looks on Instagram: show a house, close a deal, make money. Most real estate agents leave their brokerage house within three years because they leave the industry. Ashokan sees community, training, and process as keys to extending retention beyond three years and further reducing churn. He believes that with more focus on training and seamless processes, he could woo prospective agents into first joining Radius Agent, and then make them more productive real estate agents within his system.
Current Agents 2X Deals from 7 to 14 per Year
A key component of Ashokan’s system is his emphasis not only on the social community but also on accelerated training. His 90-day accelerator program is a crucial incentive to lure real estate agents in the community to join the subscription service. After the accelerator training, Radius Agent provides additional mini-courses on becoming a better agent. As a result, existing agents doubled their annual deals from 7 to 14. At a minimum, this doubles the customer value of this revenue stream, as they pay $1,000 per deal transaction to Radius Agent. Better training, doubled revenue.
2021 Brokerage Addition Drove $250m in GMV from 500 Deals
In 2021 Ashokan added a brokerage product to his growing suite of real estate tools. Radius Agent now uncovers leads and passes them on to agents in the system. When one of those agents closes a deal, they share 35% of their commission with Radius Agent. They completed 500 deals this way in 2021 at a GMV of $250m in California real estate.
Enticing New Agents with an Immediate 50% Increase in Income
Ashokan explained that real estate agents who leave other brokerages like Coldwell Banker or REMAX immediately increase their personal income because of Radius Agent’s structure. Other brokerage firms charge a 20-30% commission. When they join Radius Agent, they can enjoy no-fee deals beyond the $1,000 transaction fee. Real estate agents only pay 35% of their commission to Radius Agent when the initial lead came from Radius Agent. “Most agents who’ve joined us see their income go from $120k to $180k immediately because of our structure,” noted Ashokan.
Staff Growing Beyond 60, Actively Adding to Sales Team
According to Ashokan, Radius Agent is focused on growing their sales team as they expand beyond California. He noted that their development team of 15 engineers is based in Bangalore, India, where a senior engineer earns $60-80,000 per year. Ashokan lamented that the area, known as the “Silicon Valley of India,” is growing so much that it’s getting harder to recruit talent, as “every company is setting up a back office in Bangalore now.”
Co-founders Retain 35% equity
The pre-seed and Series A funding leaves Ashokan and his co-founders with 35% equity in the company. Investors currently own approximately 50% of the organization, while employees own 15% through the ESOP.
Funding started with $50,000 Pre-Seed, grew to $13.1m in the latest Series A, Eye on Series B
Radius Agent launched in 2015 “with a Keynote presentation,” according to Ashokan. That landed the company $50,000 from AngelPad. In 2018 they added another $4m in seed funding and most recently closed $13.1m in Series A funding at a $50m post-valuation with a 24x multiple. Ashokan is looking for Series B funding in the next six months to grow in additional states aggressively.
Product and Network Grows from 2015
After his first social network attempt failed, Ashokan eventually built and launched the current community in 2018. In 2019 and 2020, he launched products in the background that he could share with the customer subscription base as it grew. In 2021, the company added the full-service brokerage to the existing revenue streams.
Adding Products to the Suite to Attract 10X Customers
As he continues to add new customers, Ashokan is also working behind the scenes to expand the already robust suite of real estate products. Aside from the growing Radius Academy of training on everything from marketing to legal compliance, as well as lead generation, Radius Agent is looking to add on paid subscriptions like health benefits and more.
Fast Five on CEO and Co-Founder Biju Ashokan
Ashokan shared that Leading, the book penned by Sir Alex Ferguson, the longtime coach of the Manchester United Football Club, is his favorite book. Ashokan follows many CEOs, but not one in particular. His favorite online tools he uses for him and his team to work and collaborate are Asana and Slack. He sleeps a short 5 hours per night. He is married with no children and one dog. He is 37. He wishes he could have told his 20-year-old self to learn more about the art of fundraising.