Yep, those little percentages add up.
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Yeah, and just as a full disclaimer, I have no idea if they get 0.5%. But I do know they get some on at least a portion of transactions.
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That’s okay. What’s a million here or there? 
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Can’t believe Nick didn’t put in a competing offer. Would have been a great platform to start a NACHI reporting system.
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Basically, it appears to me that Nick is saying that the investors were happy to overpay. I do not know if these types of investments will put NACHI at risk or not, but AI may change everything very rapidly. I too would sit this one out or wait a few years.
Not really.
Porch is like uber, they want other people to do all the work, and make money of other peoples work while having no employees doing the actual work. They don’t want to pay inspectors as employees, they just want to control inspectors lives, while taking a cut of everything an inspector does, and then making more money off the inspector hard work by selling data. If the inspector makes any money, pays taxes, does any marketing, lives or dies, they don’t care. It’s all about monetizing other peoples work. If you’re a one man shop or large muti-inspecotr firm, they don’t care, as long as they can make money off your work.
Launchpad actually buys up inspection companies, and puts them under a giant corporate umbrella. So inspectors working for launch pad are W2 employees. What they do with the data, I don’t know. But at least they pay the inspectors directly for their time, take out taxes, and provide some sort of support for employees. They offer stock options to all employes from what I’ve heard. And Launchpad only targets bigger multiinspector firms. One man shops aren’t on their radar.
Both are giant VC corporations, both want to dominate the inspector market, and you can debate their intentions. But their methods are quite different.
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That’s not what everyone believes.
Besides, getting users “hooked” on a service or new-shiny-object and then selling to some conglomerate is not in the interest of home inspectors at all.
YMMV.
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I read the press release you posted, and it appears to just be Launchpad deciding to use Spectora as their exclusive reporting software for x amount of years. Probably in exchange for a break on the regular subscription price.
What is the reference you posted to RFP about? I assume you meant RFE, as that is where your link goes. But I’m not finding the connection from them back to Spectora, although they do appear to be an investment firm.
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You’re right Ryan, that was a typo on my end, it should be RFE, I went back and corrected my original post.
I’m only guessing at what these business relationships are to each other, but Nick had mentioned above that Spectora was bought out by a private equity firm, and being that Spectora recently announced a business relationship with LaunchPad, and LaunchPad has a business relationship with RSE Investment Firm, in my mind, it makes sense that RSE could easily be the buyers of Spectora. But again, that’s only a guess.
And as Nick also stated:
Spectora Announces Exclusive Technology Partnership with LaunchPad Home Group [Press Release]
About LaunchPad Home Group
LaunchPad Home Group is a family of regional home inspection and services brands sharing relationships, support systems, best practices, and capital base for the mutual growth of our brands. LaunchPad’s mission is to create lifelong relationships by simplifying home ownership at every stage of the journey, from inspections to remodeling to day-to-day safekeeping and maintenance. For more information, visit www.launchpadhomegroup.com. Today, with the help of private equity investor RFE Investment Partners, LaunchPad is the fastest growing residential inspection company in the U.S. and provides a full suite of services to assist customers in their home ownership journey.
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Hey Ryan @ruecker ,
Did they by chance mention Peters’, the new CEO of Spectora, last name in the email?
There is another theory about the new owners out on FB. This one is the most plausible I think. Click on the link and then take a look at the company that is posting the job.
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Yes. It is Osberg
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Looks like a really strong possibility.
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Okay, not the Peter that I thought it may have been. Professionals | RFE Investment Partners (rfeip.com)
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Never a dull moment in real estate or inspections…
So to someone’s earlier point… $44MM is probably 3x EBITDA maybe 4x. That would represent the premium paid for the brand. Let’s just call it $15MM annual and try to unpack that number. If we guess that Spectora has 5K customers each paying around $1200/yr for software, plus some percentage paying for Advanced, dedicated number, and all running processing fees through then $15MM is only about 3K/yr/customer. So it’s a plausible number. That’s revenue though, not earnings. Payroll is probably on the higher side as it is fundamentally a tech company. Food for thought.
The CEO’s linked in highlights his ability to wring money out of businesses and position them for exit strategies. That’s in-line with what vulture capitalists do. They buy things, pimp them a bit and then sell them to someone else.
I expect to see 2 major actions emerge from this.
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They will begin to tackle the “technical debt” that accumulated throughout Spectora’s rise. While it’s a sound, functional platform there appear to be some behind the scenes architecture decisions that have held them back. The lack of packages or assemblies is one such visible limitation. I’m sure there are a number of others. It’s critical to refactor all of this and streamline the code base if they want to replicate the secret sauce in other verticals. Think oreo flavors. That’s likely the magic opportunity that the investors bought in for.
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I’ve said for a while, home inspection software is cheap. Look for them to raise the price somehow, someway, creatively or bluntly.
Other things I expect in no order:
- The affiliate marketing thing largely flopped, but they saw some potential and allowed inspectors to refer preferred contractors. That gives them insight into who else might want on the platform. Look for this to be spit-shined and brought back in a more successful way. The UX for clients is a tad confusing in some areas and this is probably part of why it didn’t go well. Once they are in the report it’s great, but the “dashboard” isn’t intuitive and causes clients to ask me where to find things.
- Kevin and Michael will have less to do over time until the point where they finally exit. That’s how it works when you sell a software company. I’m frankly surprised that Dominic is still engaged with HIP and that Porch hasn’t consolidated the mess of software they own. Porch still seems to be losing money, but they appear to have a few more quarters left before they have to face the music. This likely had something to do with Spectora being acquired. There is a critical window to get an alternative built and matured before Porch implodes.
- There are other ancillary services which Spectora could roll out and which would be welcomed by some inspectors… look for that as well. As Nick said the investors will want to see an ROI that beats the street or they wouldn’t have invested.
It should be an interesting development even if it may turn out to be bad news for home inspectors.
As for Launchpad… they’ll put pressure on the inspector firms that think they are buiding an empire. Launchpad is the closest to having an empire, the question is can they make it work and will enough agents want a McInspector Happy Meal? I’m a 1 person shop… and I have some agents who use me for that specific reason. They know who they are getting when they book with me and that matters to alot of agents.
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