Entrata Raises $507MM, Traeger IPO Set, $320MM in Utah Expansions Announced, LoanPro Closes $100MM Funding, and More (Week-in-Review Highlights, July 9, 2021)

Entrata sets new Utah record for private company funding round; Traeger looks to go public and raise $100 million in the process; LoanPro lands $100 million Series A round of funding; and more.

Jul 12, 2021

Just when you thought things couldn’t get any crazier money-wise in Utah things ticked upward again last week when Lehi, Utah-based Entrata announced it raised $507 million in a round of funding.

That total — $507 million — breaks the record for the most amount of money invested in a private Utah company at one time, a record set less than a month ago when South Jordan, Utah-based Lucid announced it had closed a $500 million round of funding.

Launched in late 2002 by three BYU students as Property Solutions* (because of the frustration caused by an inability to use the internet to connect with landlords), the now-named Entrata currently serves over 20,000 apartment communities, including their owners and their renters.

As a result, Entrata generates over $200 million in annual revenue by helping property owners manage their properties online while processing over $20 billion in rent payments per year.

The investment was

“… led by Silver Lake, Qualtrics Founder Ryan Smith and Vivint Smart Home Founder Todd Pedersen, with participation from Dragoneer, Domo Founder and CEO Josh James, and other strategic investors.”

According to the company news release, this funding marks the first time the firm has accepted an “institutional round of capital.”

In the same announcement, Entrata also announced that Adam Edmunds has been named as chief executive officer, replacing co-founder, Dave Bateman, in that role.

**Entrata’s** new CEO, Adam Edmunds (L) with company Co-founder and Chairman, Dave Bateman.

Most recently, Adam was president of Lehi-based Podium. Additionally, Dave will continue as chairman with the firm and maintains majority ownership on Entrata.

Putting $507 Million into Context … AND … Entrata’s Valuation?

As massive as $507 million is for a private round of funding (and it is), it doesn’t come close to matching the largest amount of funding for a private company.

In fact, private funding rounds of half-a-billion-dollars-plus happen more often than you might think.

For example, Crunchbase outlines over 19 private funding rounds of over $500 million from the past decade alone, including a top round of $14 billion that went to Ant Financial Services in 2018.

Yeah, $14 billion — with a capital “B.”

To be clear, $507 million is clearly nothing to sneeze at, at all.

So props to Team Entrata to getting to this point; it’s a big, big deal, especially here in the State of Deseret.

One last thing … the one piece of information the Entrata news release did not disclose was the current valuation of the company, and to me that’s interesting.

Typically, announcements about larger funding rounds tend to include information about the value assigned to the firm, especially if/when the company reaches Unicorn status (aka, a value of over $1 billion).

Hence, in that regard, NOT including a valuation number makes me wonder how the investors and Entrata are valuing the firm.

We do have two clues about this, however:

Annual revenue ($200 million), and
Number of employees (2,100).

Based upon those figures, Entrata is only generating $95,000 per employee, which is not nothing, but it strikes me as being a bit low.

Specifically, although Entrata operates as a Platform-as-a-Service (aka, a SaaS model), such headcount revenue numbers suggest the company may need to provide a fair amount of

hand-holding and/or
employee interaction

as part of its services to both the apartment complex owners and their residents.

Because the company release stated that its chairman and co-founder, Dave, still holds a majority ownership position in Entrata, the most that the $507 million investment could have gained for its new investors was a 49.99% stake in the company.

This would mean that at a minimum, Entrata was valued at slightly more than $1 billion, aka, Unicorn status.

By contrast, when privately held Divvy was acquired for $2.5 billion in early May by Bill.com, we learned that Divvy had annual revenue of over $100 million and over 400 employees.

That means that Lehi-based Divvy was generating roughly $250,000/employee when it was purchased, over 2.5 times more than Entrata’s numbers.

This also means that Bill.com used a multiplier of roughly 25X revenue to value Divvy.

Clearly, Divvy and Entrata are not serving the same customers, so an apple-to-apple comparison is not possible.

However, if the Divvy valuation model of 25X revenue was used to value Entrata, that would place the Entrata valuation at $5 billion.

That would also mean that the new investors only ended up with a stake of roughly 10% in Entrata, and I don’t believe that’s what happened.

So … my best guess — and that’s what it is, a guess — Entrata IS a Unicorn, but it’s worth is only slightly more than $1 billion.

NOTE: Long-time friend (and former CEO of VentureCapital.org), Brad Bertoch pinged me after publishing this edition of Deseret Business Watch to suggest my valuation was too low. He wrote that he suspected that he believed
“… that (the new) investors in Entrata purchased between 20-30% (of the company).”
That would put Entrata’s valuation somewhere between $1.5 billion to $2.5 billion.
That feels like a more accurate market cap range, so I’m gonna go with that until I learn otherwise. {Added July 13, 2021.}

News Items of Note from This Week

What follows below are eight additional Noteworthy News Items taken from the breaking news announcements that hit our radar recently from Utah’s business community, news items we thought you might find worthwhile if not also intriguing.

Case in point —

Traeger Grills Announces Plans for a $100 Million IPO

Last week, Salt Lake City-based Traeger Grills filed a Form S-1 with the U.S. Securities and Exchange Commission, declaring its intent to “go public” in an Initial Public Offering and raise a minimum of $100 million in the process.

{NOTE: Traeger’s legal name today is actually TGPX Holdings I LLC, but it intends to change its name to Traeger, Inc. prior to its IPO.}

According to a Seeking Alpha write-up on Sunday, Traeger will likely push for a $3 billion pre-IPO valuation on sales of $545 million in 2020.

Because this is only the first public look into Traeger’s finances, I expect to see additional information disclosed over the weeks ahead before the IPO.

GOED Announces Over $320 Million in Planned Corporate Expansions in Utah

Utah’s Governor’s Office of Economic Development announced next week that five companies have plans to spend over $320 million over the next decade or so to begin or expand operations in the state.

The companies in question are

Not a bad week for GOED.

LoanPro Lands $100 Million Series A Round of Funding

Farmington, Utah-based LoanPro announced last week that it has raised $100 million from FTV Capital as a “growth equity investment.”

Formed in 2014 by brothers Lloyd, Ben, and Rhett Roberts, LoanPro is used by over 600 traditional, fintech and alternative lenders and currently has over $15 billion in loans under management.

Not sure about you, but I had never heard of LoanPro prior to this announcement last week.

So any readers with insights into the company, please drop me a note. Thanks.

Purple Innovations to Expand in Georgia with a 500,000-square-foot Manufacturing Facility

In addition to the plans noted above to expand operations in or into Utah, Lehi-based Purple Innovations announced last week it plans to expand its footprint in the eastern half of the United States by opening a half-million-square-foot manufacturing plant in Henry County, Georgia.

How much money Purple plans to spend with the expansion was not disclosed, although All On Georgia reported that once completed, Purple plans to employ over 800 people in the southern state.

But the company has over 670,000 square feet of manufacturing space currently in operation in the greater Salt Lake City area.

Clientbook Raises $4.5 Million

Lehi-based Clientbook announced last week that it had closed of $4.5 million in strategic funding after trebling its revenue in 2020.

Clientbook’s mobile app and software platform are designed for retail sales associates to help them

Manage relationship with their clientele, and
Increase revenue per client.

{I could have definitely used this back in the day when I sold suits for ZCMI while I was attending college.}

Looks pretty slick. Congrats, Clientbook.

Instructure to Acquire EesySoft

Salt Lake City-based Instructure announced plans last week to acquire Amsterdam-based EesySoft.

Financial terms and time frame for the transaction were not disclosed.

But once the acquisition is completed, EdTech software provider Instructure plans to rebrand EesySoft as

Impact by Instructure.

Fair enough.

Utah Shakespeare Festival Turns 60

Did you know that 2021 marks the 60th year in existence for the Utah Shakespeare Festival? It’s true.

And although the coronavirus pandemic decimated the Festival in 2020, the Festival is back again with a vengeance this year.

So … if you have not taken a trip to Cedar City, Utah to watch one or more plays produced by the Utah Shakespeare Festival, I hope you will make the trek this year. It’s worth the experience.

BTW: Whoever locked down www.Bard.org for the Festival’s URL deserves major props! It’s very clever yet not so subtle branding.

Funding Summit Utah Business magazine Planned for July 20

Last of all, Utah Business has a Funding Summit planned for July 20 that I thought looks pretty interesting for any entrepreneurs and/or inventors looking at paths for raising money.

It’s FREE to attend the virtual summit or $50 to attend the Networking Reception that evening.

I’d check it out if you fall into one of these categories as an entrepreneur or an inventor.

* — NOTE: This Daily Herald article in the Entrata press room (Student Business Treads Path To Success) states that the formerly named Property Solutions was “launched in November 2002.” Hence, when it comes to reporting on the year Entrata was launched, that’s the date I’m using.

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David Politis is a Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visit David’s LinkedIn Profile or the website for his business: The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him at me@davidpolitis.com.

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