Customer relationship management is a $40B industry, according to Gartner. You need to invest in your pipeline now more than ever to insure long-term, sustainable growth.
Lexicata was developed to bring a customized CRM and client intake software directly to law firms. Their solution helps law firms improve organization, maximize efficiency, and drive more revenue.
In October, the company was acquired by Clio, the leading provider of cloud-based legal practice management software. Prior to the acquisition, Lexicata CEO Michael Chasin joined Nathan on The Top Entrepreneurs Podcast and dove into their numbers.
How much is Lexicata doing in MRR?
Lexicata is a pure-play SaaS company that charges on a subscription basis. The company’s plans begin at $50 per user per month and scale up to approximately $1k monthly. On average, customers pay them $100 per month in addition to a one-time $400 setup fee.
The company serves roughly 3,000 law firms today and is doing north of $300k in MRR, according to Chasin. Lexicata has more than doubled year over year, for the last two years, and are growing mostly through relationships with channel partners.
What is Lexicata’s churn?
Churn is impressively low for Lexicata, despite playing in a volatile space. The company has achieved gross logo churn per month below 2% right now and is exhibiting net negative revenue churn overall. With simple pricing, they are driving expansion revenue by increasing deal size and number of seats.
In terms of customer acquisition, Lexicata is finding new customers through conferences, channel partners, direct sales, and limit marketing efforts. With a CAC of $50, they are receiving payback immediately with first month ACV and on-boarding fees. Chasin noted that the company models LTV around $5k over 16-20 months.
How much has Lexicata raised?
Lexicata is a completely bootstrapped entity. The company did take $180k in initial funding, prior to pivoting, but has not raised any other capital since making the switch and have been profitable ever since.
The company’s team of 18 full-time employees is based in LA and was not interested in raising capital or working with growth equity firms at the time of the interview. Chasin did however explain that he would look for a valuation between $8M and $15M if he were to raise in the near future.