Pitch Deck Teardown: Northspyre’s $25 Million Series B Deck

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By Webdesk


Back in FebruaryNorthspyre announced it had raised $25 million to help control costs for major construction projects. (Mary Ann Azevedo of TechCrunch mentioned the fundraiser in her fintech newsletter.)

It’s a huge industry with huge potential – so how does such a company tell the story of what it’s building? We’re lucky enough to be able to share Northspyre’s pitch deck with you today. Grab the crowbar; let’s crack this thing open to see what’s inside.


We’re looking for more unique pitch decks to break down, so if you’d like to submit your own pitch decks here’s how to do it.


Slides into this deck

The company told me it removed some of the most financially sensitive slides from the deck before sharing it with us; what remains is a spectacularly well-designed, clean and crisp deck.

  1. Cover slide
  2. Problem slide 1
  3. Problem slide 2
  4. Product slide
  5. Market size slide
  6. Solution slide
  7. Value proposition slide
  8. KPI slide (marked as “financial” slide)
  9. “The Question” slide
  10. Team slide
  11. Scrolling user testimonials
  12. Funding history slide
  13. Thank you and contact slide

Three things to love

Northspyre has a mature and well-designed deck that is a sight to behold compared to many of the others we’ve reviewed as part of this series. Here are a few highlights.

Gotta love this microphone drop from a market slide

For some markets you have to go in depth to explain why this is a market worth following. This is especially true for technology companies operating in emerging industries. Building is not part of that, so you get away with everything. Included:

[Slide 5] Market size? Enormous. Next question. Image Credits: North Spyre

A quick Google search gives U.S. real estate development figures ranging from $2 trillion to several times that number. I don’t think anyone would argue that this is a big potential market, and you can probably get away with saying you’re taking a slice of that market and calling it a day.

As a startup, it’s a good idea to read the assignment before entering the answer; if you label your slide “product,” it best addresses at least some of the things investors look for in a product slide.

But… the one thing to keep in mind: when you talk about market size, you are usually not talking about the size of the full value of the goods sold. If you’re eBay, your market size isn’t the list price of all the sneakers, video games, and cars listed on the site; it is the cost of the buyer and the sales commissions thereof. In other words, the market size for eBay for the sale of a single PlayStation 5 is probably around $30 or so, not $500.

Northspyre comes dangerously close to making that mistake here: even if the company performs with utter perfection, it won’t become a $2 trillion company. To be fair, they don’t necessarily claim that here – and it’s probably irrelevant given that the market is intuitively huge – but for a perfect score here, the startup could have figured out what the real TAM/SAM/SOM numbers are and have an intelligent conversation about it.

Be very careful about what you actually promise as your market size. In any case, report the top line number for the entire market, but you’ll need to drill down from there to get the full picture.

Answers the “why” beautifully

[Slide 7] What value do you deliver to your customers? Image Credits: North Spyre

It’s always a good idea to explain why and how a customer could benefit from using your product. This slide (combined with the market size slide above) tells a powerful story there. The company suggests that teams can save 2% to 6% on their construction costs. Multiply that by the $2 trillion market size and the picture begins to form: Northspyre is promising up to $120 billion in cost savings in an industry hungry for cost savings. It’s a great story, made even stronger by adding a link to a return on investment calculator.

Quite a few startups can’t say “but why should I care as an investor?” story, and it’s a relief to see Northspyre avoid that trap. This is a solid value proposition and a great idea to showcase your investors.

KPIs

The company has listed this slide as the “financial” slide. It’s not; financials are usually presented as an operating plan or as “correct” financials with more in-depth spreadsheets or overviews of what a company will look like over the next three to five years. This slide is mislabeled, but that doesn’t mean it doesn’t tell a useful part of the story:

[Slide 8] They are not financial, but they are helpful. Image Credits: North Spyre

I’d probably call this slide “traction” or “key performance indicators” or maybe even “our story in numbers.” Whatever the correct label, these figures are no joke: six hundred percent growth since 2020 is awesome (although it would be good to know how it measures its growth — number of customers? revenue? number of projects?).

Gross margins of 91% are SaaS level returns and 130% net revenue retention is more than impressive. It means customers are spending more on average on Northspyre instead of wasting away. A customer count of 130 is less impressive – presumably some of them are not the most important customers – but it shows that at least the company has a customer acquisition pipeline that is scalable to some extent. They are all positive.

The other great thing is that it shows that Northspyre knows what the important KPIs are: gross margin, NRR, growth and number of customers are all worth tracking.

The $1.61 in ARR for every $1 invested is a bit fuzzier, and I’m less sure why this particular number is on this slide. If this is a historical figure, I’d like to know how confident the company is that it can continue on this trajectory. How certain is it that if it raises $20 million, it will have added another $32.2 million to its ARR figure by the end of the 12-month period? If that confidence is low (or comes with caveats), it means the company is leaning with numbers that are a bit to the vanity of things.

Now, I’m not going to give Northspyre a hard time here. It has extra slides about financial data removed from this deck, so there may be other useful data elsewhere.

But what you as a startup can learn from this example is to make sure you signal to your investors that you know what the most important metrics are within your company. Combine that with a “go to market” or “growth” slide to draw the historical lines into the future, and you’ll go a long way in emphasizing why you’re worth the investment.

In the rest of this teardown, we take a look at three things that Northspyre could have improved or done differently – including how the product slide is, in fact, not a product slide – along with the full pitch deck!



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