Railyard Cloud
$12.4M ARR · 74 employees · Remote-first
Railyard sells dispatch and settlement software to mid-market freight brokers. ARR is $12.4M growing 31%, net revenue retention is 108%, and burn is $340k a month. A strategic acquirer has made an unsolicited approach, a Series B term sheet is in hand, and the founder is not sure either is the right answer.
The question on the table
Raise, sell, or get to default-alive and keep the optionality?
Company file
- ARR
- $12.4M
- Growth
- 31% YoY
- NRR
- 108%
- Gross margin
- 78%
- Net burn
- $340k/mo
- Runway
- 14 months
What the system found
14 → 27 months
Runway from the pricing and churn changes alone
108% → 121%
Modeled NRR after the expansion motion
$41M → $68M
Valuation range difference between raising now and raising in four quarters
The capital decision, the metrics behind it, competitive position, and SOC 2 readiness.
BK-OS · Run All Layers
Get default-alive, then choose
Recommendation: decline both. Execute a four-quarter plan that takes net burn from $340k to $95k a month while holding growth above 25%, then raise at a materially better price or sell from strength.
The Series B prices Railyard at 3.3x forward ARR, which is the discount a lender applies to a company with fourteen months of runway. The acquisition offer is worse: 2.9x with half the consideration in acquirer equity and a two-year earnout tied to a quota you do not control.
The burn reduction does not require layoffs. It requires fixing three things the metrics already point at: a pricing floor that has not moved in three years, a support-heavy onboarding process, and a self-serve tier that costs more to serve than it earns.
| Path | Valuation | Founder ownership | Control | EV |
|---|---|---|---|---|
| Series B now | $41M | 38% | Board seat lost | $15.6M |
| Sell now | $36M | — | None | $14.1M |
| Default-alive, raise in 4 qtrs | $68M | 51% | Retained | $24.8M |
| Default-alive, stay private | $— | 72% | Full | $19.4M |
Comprehensive Financial Analysis
The metrics an investor will actually diligence
| Metric | Railyard | Benchmark | Read |
|---|---|---|---|
| Net revenue retention | 108% | 115% | Below — expansion motion missing |
| Gross revenue retention | 89% | 90% | In line |
| CAC payback | 19 mo | 14 mo | Below — sales efficiency |
| Magic number | 0.72 | 1.0 | Below |
| Gross margin | 78% | 76% | Above |
| Rule of 40 | 17 | 40 | Well below |
| Logo churn (SMB tier) | 31%/yr | 18% | Materially worse |
| Logo churn (mid-market) | 6%/yr | 9% | Excellent |
- HighThe SMB self-serve tier destroys value at every level
31% annual churn, negative contribution margin after support, and it drags the blended metrics an investor will price you on. Sunsetting it raises ARR quality even though it lowers ARR.
- MediumNo expansion motion exists at all
108% NRR is entirely from seat drift. Two obvious usage-based expansion levers are already instrumented in the product and unpriced.
Cash Flow Command
Runway under four scenarios
Current plan
Sunset the SMB tier
+ pricing floor increase
+ onboarding automation
Compliance & Risk
SOC 2 readiness, mapped
Access control and quarterly access reviews
Change management with peer review evidence
Vendor risk register for 31 subprocessors
Incident response plan with a tested tabletop
Plan written, tabletop not yet run
Business continuity and restore testing
Backups exist; restores have never been tested
Customer-facing trust page
Drafted — removes the single most common deal delay
Competitive Position Radar
Four competitors, watched continuously
| Competitor | Signal | So what |
|---|---|---|
| Freightwave Systems | Usage-based pricing replaced per-seat | The category is repricing; your seat model looks dated |
| Dockline | Raised $22M Series A | Expect aggressive discounting for 18 months |
| Haulos | Integration announced with the top TMS | Distribution threat larger than any feature gap |
| LoadPilot | Support docs show a settlement module in beta | Direct hit on your differentiator |
What would this look like for your business?
Railyard Cloud is illustrative. The tools are not. Point them at your own numbers and you will have the first version of this file inside an afternoon.