If I have the math right, their revenue of $130m is made up of $110m in COGS. If they’re losing $1m/month that means they’re spending roughly $30m/year on running the business. My educated guess is most of that $30m is marketing spend required to secure the $130m revenue and cuttable costs (salaries, office space) are much less than $10m/year.
Sounds like ARR is the wrong term since it’s probably not a business operating on recurring revenue — probably an example of the bananas valuations of the last few years, based on revenue not viability.
Generally right here, just has a physical operating component to the business which makes COGS high. Think of it like e-commerce business where you are buying goods and shipping to customers. We can cut deeper, but new investors don't want to do that at he cost of revenue. In other words, I cannot materially cut costs without sacrificing revenue bc I have a fundamental GP problem that will take time to improve over several quarters.
130M in ARR and you can't save 1M a month in burn? what is holding you back from letting go ~60 people and/or trimming other costs?
Raising on those terms, that dilution and no board seat, I would not do it.