How Lemlist CEO Maël Ezzabdi grew Lemlist to $40M revenue and 10K customers in 2025.

All right, guys. It's here Tuesday, October 21st. I just recorded with Charles yesterday. He just signed a $25 million deal at Lemlas to acquire a company called Flap. What I love about what he did is it wasn't your traditional deal structure. If you don't dig into the 25 million, you'll never know how creative you can get to buy other smaller companies to drive what's called your inorganic growth. Lemlist is now doing over 40 million bucks of revenue. I bet you they break a 100 million by the end of 2028 with Charles's leadership and Gome the original part of co-founding crew and his product led growth is just founder stories on LinkedIn. But the way they did the deal is it was a basically 10 million bucks plus some convertible bonds for the founders at close of that you know 1015 million 5 million was cash 5 million was basically clap saying okay lem list we'll give you a $5 million loan you can pay us back over time at a 3.5% interest rate but we'll defer for two years right so that's a cool way for the founders to get more money over time and then the second part of the of the $25 million deal structure the last 15 million is earnout for the clap founders if they stick with list and they grow it from 2 million bucks to 10 million bucks of ARR over the next three years. So before December of 2028, it'll earn that extra 15 million to get that total deal headline rate of 25 million bucks. Really creative deal structure. This one's a really good episode. Let's jump in. All right, folks. Special guest today. I'm here with Charles Deno. He's the CEO of Lemlist and Lempire. As you know, we've had the CE Guom, the founder and other product experience folks from Lemlist at our events and on the podcast. Uh Charles is leading the business into a new era. That's the post $40 million AR era and that starts with a big acquisition that they're doing today. We're recording this here Monday, October 20th. I think the acquisition also happened today. Charles, tell us what's going on and maybe for those that don't know what Lemlist is. Tell us what the business is first and then why this acquisition made sense. Yeah, first of all, thanks a lot Nathan for having me. Uh it's a pleasure. Um and uh yeah so we we are having a very exciting journey at LM list uh because we are growing very fast and reached 40 million AR as you mentioned. So Lamb list is a sales engagement platform. Basically we help sales people uh to um do outbound. So we help them like to find leads to find their phone numbers and u and and emails and then to engage on multi channel. So we support many different channels. So you cannot reach uh on email, you cannot reach on LinkedIn, through WhatsApp, um through phone. So we we try to be the platform that has the most capabilities in terms of engagement. Um and uh yeah, List Hopefully it's not done with the AWS outage today. You're good. I already checked. We're good. But CLAP Clap is actually done. So that's that's for the fun part uh because uh because of AWS, I guess. Uh and uh and yeah, we we just acquired Clap uh which is a um call intelligence platform. So uh Clap is basically very an AI product that allows every sales rep to record their call and to generate high quality transcript in any language. And the idea of this transcript uh is uh to do multiple things such as automatically get coaching and insight on the call. So help sales improve but it can help to autofill the CRM. So avoiding to u to manually fill the CRM. It prepares the nodes that you can integrate in the serum or directly the different fields that you want to fit in. Uh and it helps um for of course yeah sales coaching, sales enablement um and many different use case that you can decide. Um so that's a very yeah very um let's say use case extensive product where you can have a lot of fun building like multi- use case around um around the transcripts and we're seeing like many people use it for that and and so this is just to be clear this is really officially moving lem list from sort of maybe email marketing automation tool you're really moving into sort of the granola fathom you know call recording you know cluey whatever's left of cluey right space um is this how did you decide that clap was the company to go after. Did you use Lemmless say you know what we know we want to get into the space and then it was do we build it or buy here's a list of who we could acquire or was this something where like you're buddy buddy with the founder you go back 30 you know 20 years you're not that old and you say let's just do a deal together. Yeah. So it's it's always a mix of things. Um the the general idea that so we were user of Clap uh and we love the product. We've been using many different products and uh one day I tried Clap and I really fell in love with the product and naturally all the team adopted Clap and the sales are using Clap every day. And so that was kind of like let's say the the starting point where we started to realize that the product was very good. Um and uh beside this uh we're profit making at Lis. we we we do around 10 million uh profit every year. So we we always want to invest in more growth and better product for our users. U so that was another driver and the last part is really that we saw very good combination um because clap is selling to exactly the same people as we target. So sales team from three to 50 reps um sometimes a bit more um and uh they have the same kind of ACV they have the same like champions which are rev revops business ops or or sales managers um and we saw a very strong potential in um what they get from the conversation so the conversation is like unused in many in many companies so it's a lost asset but if you use the conversation you find lots of valuable thing for sales and one of the thing is what I called uh internal signal internal intent and at Lis we're really trying to make out outreach better and smarter and doing it to make it smarter you need to have good intent to reach out to the right person at the right time and in the conversation actually you have a lot of very interesting um insights that you can use to outreach I give you an example which I gave on my post but um at at my previous company I was CRO um and basically like my sales were calling all day and they were not taking any notes So basically the serum was was empty and because the sales turnover is high. Um so you replace your sales rep all the time and because you have no notes 3 months after 6 months after when you give the account to another rep which happens when you are kind of mature uh the the rep calls with absolutely no information nothing on the account. But if you have something like clap you have all the history of the of the discussion that you had with the account and you have intelligence and you can use this intelligence to prepare your next call. So instead of calling out of the blue with no idea on on the previous calls, you will call and for instance you will know that uh the the manager is called Eric that uh they have uh three point of sales and they are opening a fourth one and they have this type of seasonality and so you start the conversation with much more intelligence and if you start from nothing you know and that's for me all of that this is just an example but in the conversation that are not used in most company you have a lot of intelligence that you can use to improve prospection and and outreach. Um, and this is the idea of combining Clap and and Lemist. Yeah, this makes tons of sense. So, start off as you guys are a power user. It makes a lot of sense with your audience. You go out, you get the deal done. What was or what is Clap's revenue? It's roughly 2 million AR. Okay. Got it. And were they bootstrapped or have they raised a bunch? No, they raised the seed uh a few years ago uh initially to do async work uh and they they they were not able to build the category uh because it was like uh yeah doing clip video for async work uh and they they pivot to uh conversation intelligence uh year and a half ago um and they and they grew this this product to 2 million and kind of very fast growing like recently about 10% month over months um and uh so they had they had raised the seed but now they were like almost break even. They were they were they were break even in terms of cash right now. And how many folks were on their team full-time? Seven. Okay, that's amazing. That's great. And and yeah, if you tried the product, you'll Yeah, you'll be shocked if you tried the product. If you try the product, tell me and tell me honestly. But to be honest, everyone who has tried the product was shocked when they knew that it was only seven people. Uh and it's it's one of the reason why we bought we bought Clap is because they're have a very strong tech and product DNA. uh and they lack a bit of distribution which we are good at at LNIST. Uh so for us it's a product that that was underdistributed in terms of potential. It's a product that is that is much better than the 2 million AR product. It's a it's certainly at the level of a 20 million era product and the idea is that we can catch up on that and and help and use like our LMI customer base and audience to grow clap and so we're very...