Can half a million dollars, a new CEO, and the support of some of Utah’s most successful entrepreneurs propel an under-the-radar business to the global tops of software breakthroughs? Entrata, a 19-year-old software developer for property management, is about to find out.
Silver Lake and the family offices and Qualtrics cofounder Ryan Smith and Todd Pedersen cofounders, led by Silver Lake, raised $507M in funding for Entrata, a Utah-based company. Other investors included Dragoneer and Domo founder Josh James. Entrata declined to comment on its valuation. However, cofounder Dave Bateman retains majority ownership, which means that Entrata’s current value is more than $1 billion.
Entrata will also be getting a new chief executive officer with the funding. Adam Edmunds, a former Podium president, joined Entrata to help the company move forward. Edmunds is close to Bateman. Edmunds stated in an interview that he had briefly worked with Bateman, who would later become Entrata. He was a college intern at BYU.
Edmunds stated that he worked for Dave for approximately three months before advising him to go into entrepreneurship. Edmunds did just that and sold startup Allegiance to MaritzCX. Edmunds stated that the two kept in touch.
Because while Bateman’s recent headlines include his payment of the Utah GOP’s debt and, most recently, for a defamation suit filed by Nikola founder Trevor Milton in response to tweets by Bateman regarding Milton, litigation that continues, Entrata has preferred to be built privately over the years.
In 2003, Bateman and John Hanna, Mike Trionfo, and Ben Zimmer founded Entrata. Their pitch for the business had won them a national M.B.A. contest. Entrata used to be called Property Solutions. It offered software that helped landlords and property owners track and collect their payments from various properties. Entrata was introduced in 2012 as a more complete “end-to-end” solution. It would include customer relationship management, accounting, insurance, and utilities. Entrata was officially rebranded as Entrata in 2015 after the software was declared a success.
Entrata was a vertical software business that competed with smaller companies and Forbes’ Cloud 100 firm Yardi. Entrata, a 37-year-old private company with which Entrata settled a long-standing lawsuit in 2019, achieved significant scale without Bateman raising any capital beyond the initial money needed to get started. Entrata’s revenue will exceed $210million this year on a growth rate of 30% and net revenue retention rates of 125%. Entrata was profitable for many years. The company claims that Entrata achieved Ebitda margins exceeding 15%.
Smith didn’t underestimate the importance of this scale and high cash profile. In January, Qualtrics went public. Smith is also now the chairman. Smith recently finished a rollercoaster first season with the Utah Jazz. He has also become a prolific backer of startup unicorns. Smith says Entrata is riding on several macro trends such as digitization of the home and the rethinking of the rental property market brought about by Airbnb. Smith explained, “It’s a great opportunity to bring a fresh-school approach and large new backers and say, “Hey! What could this look like?”
Although Edmunds will have to shift his priorities, Bateman maintains that Bateman will continue to be involved to a high degree. Edmunds had taken some time off from Podium to take care of his health. Bateman, who recently moved to Puerto Rico, said that he had also experienced health issues. Bateman explained, “I’ve always considered myself a product person. I am deeply in my code.” “I realized that it was time to change places.”
Entrata’s Edmunds was the leader of the fundraising. Entrata quickly gathered interest from Utah tech leaders, investors, and others who knew them well. The half-billion-dollar war pot can be used to make acquisitions or grow faster outside the U.S. Silver Lake co-CEO Egon Daura said his company was impressed by Bateman’s ability to build Entrata organically (not through acquisition), brick-by-brick to date. The change in tactics could help Entrata to grow faster and become a $1Billion-in in revenue business. Durban said, “This company is at a turning point.”
Durban was vague about Entrata’s ultimate goal, but he hinted at an imminent IPO. He stated that Entrata is an excellent business because it has all the options to succeed down the road. Silver Lake’s partner Smith said he could see Entrata becoming a public company in just two years.
Bateman views the investment in his company as vindication regardless of whether or not there is a stock market opening bell. He stated, “We thought that if the product were built right, the market would follow.” “We can see that now.”