Linear #030: Squire: vSaaS For Barbershops, VTS, & Key Focus Areas to Grow from $1M to $10M ARR

One vSaaS breakdown. One biz story. One 'how to'. In your inbox once a week.

Jul 24, 2023

Squire: vSaaS For Barbershops

These guys met at a party and went on to build a $750M company. But it hasn't been all glory, it's a tale of true perseverance.

The story of Squire, the (almost) unicorn software company you've probably never heard of:

Meet Squire. A barbershop management software that 3,000+ shops run on. They've raised $143M from top tier investors including Tiger Global and Iconiq Capital. But it hasn't been all sunshine and rainbows. It's a case study in true perseverance...

Let's dive in:

Songe LaRon and Dave Salvant left their corporate jobs in 2015 with $60K in cash and an idea. A better booking app for barbershops. The two, who had no experience as barbers, were hell bent on making it happen. But with no industry experience, how was it going to work?

They started with a simple booking app. It was failing. They realized that barbershops needed software that could handle payments, inventory, scheduling, commissions, and more. So they decided to buy a failing barbershop in Manhattan and run it themselves.

They spent $20,000 of the $60,000 of cash they had on hand to buy out the lease on an ailing barbershop in Manhattan’s Chelsea Market. “That gave us a test kitchen to develop the software,” recalls Salvant, the company’s president. “This was a huge gamble.”

That was a risky move, but it paid off. They learned exactly what it took to operate a barber shop. This is so key in industry-specific software. You HAVE to have a deep understanding of your industry. Too many vSaaS co's fail because of this.

To gain market credibility and traction with investors, the duo applied to Y-Combinator. After 3 rejections, they were finally accepted in 2016 and moved to San Francisco. They developed a Silicon Valley network and it set them up for their first institutional round of $8M.

That $8M in capital enabled them to add more and more barber shops and continue to build out the product to be end-to-end. By 2019, they were named to one of the fastest growing companies in America by Inc. Magazine. Squire had reported 3 year revenue growth of 3,684%.

In 2020 the Coronavirus pandemic struck. Their revenues crashed. But with incredible timing, Squire secured a $34 million funding in March of 2020, right before the lockdown started. If this round took any longer to come together, there is a chance they would not exist today.

Squire persisted, leveraging the capital to build an incredible reputation amongst barbers and deciding to not charge any subscription fees during COVID. They developed software to enable contactless payments and virtual wait rooms for customers to stay outside until their turn.

On pace to triple ARR to $12M in 2021, Squire took advantage of the software investing gold rush. They raised $60M at a $750M valuation. That's a multiple of 62.5X...

Squire will have to grow into that valuation with existing capital or face a down round in the near future. In 2021, valuations got out of control. It was no different in Squire's case.

While getting my haircut recently I asked the barber about it, he said they are the Apple of the space. Simple and intuitive. He said life before them was difficult, lot's of cash tips, owners fighting with barbers as to how many haircuts were completed, the list goes on.

But will they persist and overcome the hefty valuation? I think so. It's clear they've solved a real problem and built a great vertical software business in the process. Here's to Squire. I'm excited to see you all continue to innovate and build magic.

One Biz Story:

VTS: Commercial Real Estate Software (Contrary)

Click the photo above to see the breakdown

One ‘How To’:

Key Focus Areas to Grow from $1M to $10M ARR

Click the tweet photo above to see the breakdown