How Cents Built a $60M Laundry Software and Payments Platform With 80 People

I got into it because I wanted to buy laundromats. The more you learn about this industry, the more excited you get, but the more surprised you are of how well it does for the lack of technology. And that's where we decided instead of buying stores, starting to build for them. The custom build hardware is where we both have margin, but it does so much more than just function as a screen and a payment acceptor.

How many of these are in the wild today installed?

200,000, 250,000, some... Something along those lines.

Okay. What's the target for the end of year this year? Do you have a target?

A hell of a lot more than than last year.

Can you double? Can you break one twenty by December this year?

Could we? I think it's possible.

Hey, folks. My guest today is Alex Jekowsky. He's the cofounder and CEO of Cents, a New York based all in one software, hardware, and payments platform, Triple Threat. They're built specifically for the laundry industry. These are laundry mats, dry cleaners, and multifamily shared laundry rooms. They bundle POS, online ordering, on machine payment hardware with marketing automation, and AI customer service all in one. A big vertical SaaS business. Alex, ready to take us to the top?

Let's do it. Thanks for having me on.

Yeah. I mean, you are a triple threat integrating all these things into one. Did you start off in a hardware or software or payments, or was it all from day one?

The idea when we started the company is there's one way to do this if we wanna build a multibillion dollar business. It's not a point solution. It's not just a point of sale. It's not... You know, we have to be the all in one. And the beauty of vertical SaaS, right, it's a smaller market. We should have higher penetrate... Higher penetration, higher retention, and higher attachment rates to all the products you deploy going forward. Right? So

we started with the point of sale because software easier than hardware from an iteration perspective, from a deployment perspective, from a hiring perspective, from a cost perspective. So we started a core product with a point of sale as we were building the hardware. Then we commercialized the hardware in kind of late twenty twenty two, early twenty twenty three, and then realized, damn, this hardware thing really hard. And while we made, you know, a couple million dollars

of sales and we were pouring a lot of money into the effort, realized best way to derisk and accelerate that execution was potentially through M and A. And that's what led us to kind of buying a business in 2024 that accelerate a lot of our hardware growth.

Alex, take us back to day one. When did you guys write the first line of code for the business?

I always mark, like, when did I take the first risk of going full time? That was around October, November 2020. I got into it because I wanted to buy laundromats. After I sold my last company, heard I wanted to open a bar, you meet enough people that own bars who say maybe not the thing to do. While it didn't end up being the bar, it was... I was most interested in the laundromat space. The more I

learned about it, found stores I wanted to buy. And the more you learn about this industry, the more excited you get, but the more surprised you are of how well it does for the lack of technology. And that's where we decided instead of buying stores, starting to build for them. And so that was probably, you know, twenty nineteen first line of code.

You know, a lot of people in AI right now are saying, what's the AI hedge? Go buy shit AI can't replace. Why didn't you actually go roll up laundromats?

When I was looking at buying stores, I was hell bent on buying those stores. I was... Had LOIs for three locations. I was, like, all in, biz buy sell, the whole the whole nine. It was the function of... I have a relatively sizable earn out at a company I... That just acquired my business. Like, I need to be able to do this with the least amount of effort possible. I'm sophisticated enough. I should be able to

implement the right systems. That meant I didn't have to go handle a metric ton of quarters on a monthly basis and, you know, hire a person to do delivery when there's the gig economy everywhere and not jerry rig a square with paper logs and a toast POS to me. So all of that made me realize I don't even know how I could run these stores with the level of technology available. But I felt so deeply in

love with the industry and so deeply in love with the opportunity of the fact that there really there was no venture backed, no growth equity backed, no sophisticated infrastructure... Institutional technology infrastructure for these operators because all the money that went into laundry tech was the Uber for laundry. And guess where all the Uber for laundry companies take their laundry to? Local laundromat. But it got no love people didn't appreciate the tan. They thought the operators weren't sophisticated enough, whatever it might be. And we love to say, boy, were they wrong.

How old were you in 2019?

23.

Generally And speaking, were you already pretty well off as a 23 year old from your prior exit?

I think in context, yeah. I mean, I I think in the world of of of where you wanna be in life, no. But, you know, I I I had it cushy, we'll just say.

Take us through when you got your first paying customer and then the growth tactics to get your first 100 customers.

Yeah. We were introduced to a large scale operator in New York as kind of our first customer. And most people say, don't sign the whale first. You overbuild. You have all these enterprise issues the SMB doesn't have. I challenge that by industry because if your if your first customer is a big enterprise customer, they tend to be invested in your success. And really, this operator gave us their full store and their entire G and A to

help us understand what's important. And in our vertical, I think a lot of SMBs, you know, a 73 store operator or a one store operator are not remarkably different from a store operation standpoint. They just the problems that a one store operator has compounds meaningfully the large scale. But we learned a hell of a lot and we're able to build a product that may be a little overbuilt in the beginning, but set the right foundation. I

thought this big customer would be enough for us to raise capital. All the feedback I got from from seed investors early on was prove to me you can pound the pavement and you can sell another five or 10 customers yourself. If you can't do that, I don't understand how you think more capital will get you where you wanna be. It was really pounding the pavement to try to figure out the product market fit. The way I

did it was physically walking in the stores or going into the contact form on all the websites if operators had them or pick up the phone and calling the the the store and trying to figure out if they didn't do delivery. We were building the first ever gig economy integration for delivery, so leveraging Uber, DoorDash, etcetera, to build two way logistics, which had never done been done in the space before. And we saw that as here

for a nominal fee, you can add ancillary revenue with no labor, CapEx, etcetera, to launch delivery and grow your... These small business owners, you know, addressable market. And that was the wedge to say, oh, we also have this hardware product we're building and this point of sale, etcetera. And that is kind of what helped us build up, get about 80 total stores.

Do you remember what revenue finished for in 2021?

I think we went from basically zero to about 700,000 in 2021 and then 3,000,000, $6,000,036.60, and then it starts to really ramp and scale from there. We're not adding 50,000 rooftops a year. The industry can't sustain that. What we care about is we have 99% customer retention. Like, that's the number that we care the most about. Because if you build the right product, you build it the right way, you're transparent, reliable, and communicative to the customer,

you know, and you have an industry dynamic where it's so stable as an industry. You have these really remarkable metrics that facilitate a lot of the growth.

Can you attach years to the dollar figures you just gave me? So seven hundred k

twenty one twenty two, twenty three, '24, and '25.

Okay. What's the target for the end of year this year? Do you have a target?

You know, a hell of a lot more than than last year's.

Can you double? Can you break one twenty by December this year?

Could we? I think it's possible. Does it make sense for our business, our customers, the industry? That is where I I don't necessarily believe. I think what we wanna do is dive deep into the customer needs and focus a well more on on net dollar retention versus just location count growth. I think where you see a lot of tech companies fail is you see this big valuation. They've raised it a billion dollar valuation. They're growing hundreds

of percent a year as a, you know, at 20,000,000 of revenue or something like that. Then they get to a 100,000,000 of revenue, and then the growth is more like 10%, or it's declining from from from a 100 down to 30, down to 20, down to 10. And if the EBITDA margin isn't there, you become a zombie where at a $120,000,000 of revenue, you're worth less than you were at 50. Growth will eventually come down. It

just is inevitability as you get bigger. So how is the business positioned for when growth starts to look like 30 to 40%? So our our view on growth is being durably compounding as a business with strong efficiency invested in the areas that lead to customer value and success. That is the safest position to be in in a bull or bear market.

99% retention. But if you're crushing it, going deeper, getting more wallet share from the same operators, net dollar retention should obviously be much above that, especially if they install hardware. It's very rare that they're gonna rip that out. What is your net dollar retention target, and where are you today?

Where we wanna be is at the top, if not greater than that. I think, best in class benchmark you see from Bessemer's website or insight or anything of the kinda one fifteen to one thirty. That's within the realm of, like, you wanna you wanna be living there in general.

Are you there today?

For for us, yes. Yeah. We we only have, you know, 90 or so employees, maybe 94 employees at the scale of revenue that we're at today. So, again, for us, efficiency and doing things at the capacity that we can do them that the industry can sustain is what is most important.

60,000,000 last year of revenues with 94 employees. I mean, you have

Well, technically, we had, like, technically, we had, like, 80 at the end of last year.

I'll do... I'll give you even more credit then. Right? 60,000,000 divided by 80, I think, is about 750,000 of revenue per employee, which is world class. Right? How are you doing so much with so little, and were you profitable last year?

Yeah. We're we're operating at at above 20% EBITDA margins. We like to push our team. One of our one of our executives, Nick Dincenzo, on our sales side, he has a great quote I love using, which is, you know, people grow linearly and businesses grow exponentially, and we've had a really good time having our people grow exponentially alongside it. And I... Sometimes I look at companies with hundreds of employees. I don't even know what they do

all day. And I think people... You know, we have... The the best metric outside of customer retention is 98% employee retention. I've only lost, I think, three, maybe four employees ever that make over $100. And so I think it's a culture that embraces failure as an opportunity to succeed and grow. And that pushes that level of, I think, culture connectivity because we're all in the shit together kind of thing. But we'll never be happy until we

at least hit a million of revenue per everyone head count. That is... That's the benchmark.

So if someone's thinking, wow. 20% EBITDA profit, you know, profits in 2025 on 60,000,000, why would he go out and do the 140,000,000 series c? What was your thinking?

Well, hopefully, you never raise capital when you need to. That's always not a great position to be in. When we did this round, we said, here's... This is the valuation we wanna raise at, and these are the terms we wanna raise at. It wasn't if somebody offered 20% more or x percent this way or the other didn't sway us. We had higher term sheets. We had different term by different folks. I think the the thing that

drove us to to wanna raise the capital was the quality of the partnership of Sumaru. It's just an amazing group top to bottom. And, I mean, we went... Probably had three or four dinners before we even started in the process. And in aggregate of the twelve hours of dinners and in... You know, I don't even know how many bottles of wine. We probably talked about cents for an hour or two. But as people, they just were

incredible. And that's what we indexed on. I always said, like, I never wanna be afraid of going into a board meeting. I'm okay to be frustrated and angry knowing I'm gonna get my ass kicked. But I wanna be afraid because afraid means I don't know the people around the table. I don't know how to predict them. I don't know who they are or how they're gonna react. Like, we know we know each other and we've been

able to build that bond. So that was a big reason. And the other side of it, again, is accelerate growth, meaning pull the out years in and being able to get into dry cleaning and our shared laundry rooms and multifamily properties. You power now, you know, nearly 7,000 apartment buildings, shared laundry rooms, college campuses, all of that, and pushing deeper into other retail sides in terms of dry cleaning alterations, etcetera. And we knew we we wanted

capital to do that and bring on a great partner to steward that next phase of growth on the board and then also provide liquidity for some of our employees. We did an employee tender as part of this.

What percent of the 140,000,000 was for that sort of thing versus operations?

Operationally, I think it was like we did a series c close of a 110,000,000 and a $30,000,000 tender. And even in the hundred and ten, there were still some some some secondaries there. So I would say it wasn't it wasn't primarily for growth capital, but definitely growth capital is helping us fuel a huge amount of the continued kind of accelerant of our growth.

You just closed this in a couple months ago, ninety days ago. Are you comfortable sharing what you saw in terms of valuation?

When we kind of set the valuation target, it was, alright, we know at this price, these are the buyer profiles, and this is the path to liquidity for us. And what I tell every... Like, I have a share price calculator in our financial model from now until 2031 monthly. We know what percentage of the market we need to have. We know all of the relevant metrics to have an outcome. Now, for context, like, I love this

business. I'll run this till they don't let me. So when I think about liquidity, it's not so I can sell it. It's so I... You know, we provide liquidity for some and we continue to rip it. But we feel very confident in the price that we raised at to deliver the kind of outcome that an investor is looking for at this stage.

Can I pin you down, though, and put you somewhere between a ten and twenty x revenue multiple?

Yes. You can you can pin me you can pin me down down somewhere.

And the reads... I look. It's... I think it's a valuable lesson for founders. Right? So, Alex, correct me if this is wrong. What Alex is saying is listen. A 140 is a lot of money. 10 to 20 x feels okay. If we keep growing, he sees outcomes where someone would pay more than that multiple, where everyone would be in the money, basically, himself, investors, employees, everybody. Alex, is that sort of accurate?

The way that I I view it is, you know, when you're getting the multiple and that's driving the enterprise value and somebody invests at that at that price, can you get... If it's growth equity, can you get four to six x that price in an outcome with enough of a buyer profile where... You know, why do people go public? Public... Going public isn't a liquidity event. It's a financing event because you've raised too much capital. The

preference stack is is crazy. It's usually because you you kinda have to at a certain point. Yeah. And there... You're too big to be bought or whatever the the the case may be. And so we wanna preserve as much optionality as possible for an exit event, whether it's going public, selling to a strategic private equity, or staying private and and holding the business for as long as we want. And so... But no matter what, in order

to preserve that optionality, you have to be in a position to be able to have a growth equity or private equity event or a public event or something like that, where you need to have the cash flows to stay private and not constantly need more capital. We've seen it more often than not where companies raise at large prices, and the investors rarely lose. The founders will lose more. The employees will lose more. The common stockholders will lose more.

How much today of the company... I was just all in. Is the ESOP pool plus you plus employees, basically non investors? How much do they still own?

We're not giving percentages on on that out necessarily, but I... What I will say is the the the common stockholders are are very well positioned, and this is a founder led business. And so we've really indexed on ensuring that all of our investors are aligned with the founders and the team. We want all of us to succeed and be aligned in what it takes for that to happen. And if all of the interests are aligned, you tend to have a really productive board, and you tend to have a lot of trust and and transparency at the table.

Take us home here on product. Of the 60,000,000 of revenue last year, how much was hardware versus percent of GMV versus software?

For us, this hardware is unique because it's really a payments hardware product. So you have this big push of revenue on on hardware. There it is right there. Big push of revenue on hardware, but every hardware device that goes out there has SaaS and payments attached to it. So you have this hit of revenue and then the longer tail SaaS and payments, you know, revenue line flows from there. And so that's obviously, you know, we we

process a huge amount of payments through our rails between cash and How much? I think we're we're around a $1,401,000,000 a month Okay. Or or so right now. So it's a pretty sizable volume that flows through. And, again, that is largely driven by the hardware that we sell. So every one

time on the hardware, or is it a loss leader for the payment volume?

No. That's the the the hardware is one... It's it's great margin product for us.

Okay.

And it's similar to like a... Like, look, the laundry equipment manufacturers. They sell this one time piece of laundry equipment. It's got great margin, provides a ton of value, and lasts a really, really long time for the customers. We don't view hardware as a gateway to software. I mean, obviously, is, but the hardware itself standalone, it isn't just an Android tablet. Like, we custom built that device that's on that machine from the enclosure to the EMV

modules to the screen to everything to have standalone value to the operator beyond just here's an Android tablet that comes with a point of sale. The custom built hardware is where we both have margin, but it does so much more than just function as a screen and a payment acceptor.

How many of these are in the wild today installed?

It's 200,000, 250,000. Some... Something along those lines. I have number in my in my head, but it's a lot. There's a lot of them out there.

Yep. Alex, I could talk to you forever. I mean, you're in so many different product lines. You're in a really interesting space. You're not sort of touting us. We're gonna be worth $30,000,000,000 because we're an AI product. You're just doing the good stuff the right way with good people and, you know, serving the customer. So if people fell in love with you just watching your answers, they wanna get behind you as well. I mean, are you hiring? Or, like, where where do you wanna direct people?

Yeah. We're we're hiring. So, you know, trysense.com, trycents.com or LinkedIn. Feel free to message me on LinkedIn or look at our look at our page or general interest applications if there's a role that we're not actively hiring for that you're interested in. Go take a look, and we'd love to connect.

Alex, thanks for taking us to the top, man. Appreciate it.

Awesome. Thanks, Nathan.

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