How do you integrate massive companies, align global teams, and keep growing — without chaos?
In this episode of Founder to Founder, I sit down with Andrew Sobko, founder of Batch and a world-class M&A operator in logistics and tech. Andrew built a $300M+ empire through high-stakes rollups, deep operational systems, and relentless execution.
We break down how to structure deals, manage cultural integration, use AI in logistics, and avoid the most common M&A traps — from someone who’s done it at speed and scale.
🔎 What You’ll Learn:
• How Andrew closed a $100M+ deal with Goldman Sachs watching
• Why integration beats separation in post-merger ops
• How to build trust and credibility as a first-time acquirer
• The #1 mistake most founders make when buying companies
• AI, automation, and the future of logistics
• What great CFOs and boards actually do
• Why grit still matters more than capital
This is a playbook for anyone thinking about M&A, scale, and long-term value.
🎧 Listen on all major podcast platforms — just search Founder to Founder
👇 What’s your biggest fear around M&A — integration, capital, or speed? Let me know in the comments.
What is Founder 2 Founder?
Welcome to Founder 2 Founder, the ultimate podcast for entrepreneurs who refuse to settle for ordinary. Hosted by Sardor Umrdinov, founder and CEO of Home Alliance - a $100+ million tech-enabled home services platform operating nationwide.
From bootstrapping his first business to building a horizontally and vertically integrated empire, Sardor brings you raw, unfiltered conversations with successful entrepreneurs, industry leaders, and game-changers who've turned their visions into multi-million dollar realities.
Each episode dives deep into the real stories behind business success - the failures, pivots, breakthroughs, and strategies that actually work. Whether you're scaling your first startup, planning an exit, or looking to acquire your next business, you'll get actionable insights from founders who've been there and done that.
What You'll Learn:
- How to scale from startup to 8-figure valuations
- M&A strategies and exit planning
- Home services industry insights and opportunities
- Investment and business acquisition tactics
- Leadership, team building, and operational excellence
- Fundraising, private equity, and wealth building strategies
Subscribe now and join thousands of entrepreneurs building their path to financial freedom!
"Partnerships are everything. Success is not a solo journey." - Sardor Umrdinov
Welcome back to the show. Uh today we have our guest Andrew Sabco, founder of Batch. It's uh who have took his company from zero to one of the fastest growing companies in America which is included in top three of Inc. 5000 and number one in Financial Times. [music] Andrew, thanks for joining our podcast. Thank you. Thanks for having me.
Andrew, let's talk about your M&A journey. What was your first uh deal? How that looks like? Yeah. So, I would say like my M&A journey probably started like 10 years ago. Wow. Probably was um 6 years before I actually did my first deal. Uhhuh. And kind of go back with one of my first mentors, Patrick Omera, who was a former, again, he was a Wharton guy and he stole one of the most successful railroads in the country, which he sold like over 15 to 20 years ago. And the M&A journey started with you know how do you put you know 1 plus 1 equal three that's always how it starts and when I started when I originally got excited about M&A I was like wow this is you know you can you can buy some companies you can buy bigger companies than you are and we started thinking about it then when I started my company which was CDL which became badge in um 2018 in 2020 we again had some interesting opportunities to potentially you either take some private equity money maybe think about you know public markets and specs were super hot so I started building like a real pipeline of deals start thinking about the TESS start thinking about okay which companies can we put together that's like when it's all started again originally a lot of work before for me at the beginning was like a rocket science I still not sure if I know much about M&A but yeah um I did a couple interesting deals um in the past but yeah that's how it all started And um a lot of work, a lot of strategy, just constantly strategizing, you know, how you put these companies together. Why M&A then organic growth? Just Roman if you do it successfully and you know, you know, I want to kind of go a little bit backwards about different cycles we're in. So like again 2019, 2022 there was a cycle about just growth at any cost and people were just again focused on subsidizing. I was always a big believer in acquiring great relationships and great customer base instead of um subsidizing a lot of people just would lead with a price just to get the customer and I've done it many many times and I have like million examples where we close like one of major fortune 100 logos just by subsidizing like throwing them like a really cheap price up front executing for quite a bit of time doing an excellent job and that's how you start get into some of those unique relationships but again timing is always different and through M&A I'm a big believer you can get significant scale and again it's all about also the story what are you acquiring how you acquiring what the customer base what the strategic rationale uh now I like to say it like when you present you're trying to raise money for M&A from investors you know what that investment member looks like so that's how we approach M&A right now yeah when you did the first M&A uh acquisition uh how big was your company how big was [snorts] your team and how big was the target I think when when we originally when we did the deal which we end up closing about two two and a half years ago now. Mhm. Uh we were approximately equal size companies. My company was like at the big at that moment was like more sexy some great tech simplifying customer base and was growing like crazy. The other company had more financial discipline. I I like to say they had like almost like public market ready back office infrastructure and they've been around for 15 years and strategic rational was number one you know cost of people in Jacksonville Florida was half half to what we typically pay in Chicago they already had like very robust back office and they also company had like significant history and unique customer base around southeast in America. Mhm. So the rational was you know put these two companies together we're again we're approximately you know at that moment we're like 100 million each in topline revenue and you put these two companies together you move back office you you take on at least you know 20% synergies because of the back office and some of the operations and you use what's better in each company. So uh so each company was 100 million and how big was the team on each one? I think you know when when we started and after cuz you know every time you do an M&A deal you you want to kind of underride against synergy. So unfortunately you know you go through the riff usually before you get the deal done or like couple days after or a couple weeks after. I think we were like at that moment like probably my team was around 150 people and their team was around 120 people when we started. how you merge these two companies like culturally like two separate cultures people because you're actually merging people right like merging countries almost like what I've learned through some my last couple deals number one the most important M&A it's like you know how can you win like hearts and minds of people which is very challenging very difficult especially again different cultures different cities and you know me being a younger guy and dealing buying a company that been around for a long time they seasoned executive team been around for a very long time been around this industry for like you know 40 plus years. Uh it's difficult to win those hearts and minds. So it starts with you know can you convince people it's a good idea. So at the beginning you know we did convince some executives but it was very difficult to convince the rest of the team cuz for them it was always like a threat. just to kind of look in the other side perspective. You know these people work for this company 15 to 20 years and uh they have they pay their mortgages, they pay their car payments. That's like entire livelihood is in that company and their jobs because you don't get to see them before you acquire company. I can talk about some teases we do always now we interview top executives like a mid-level executives. We we do like oneonone interviews before we close on the deal. But like most of the people now it's like usually it's like pre-secretive project. Yeah, same with the customers, you know, you're not trying to tell them like, hey, I'm going to buy this company. I want to interview cuz usually people panic. So, you come through a perspective like, hey, we're advisers to the board. We're some consultants. Do you mind want to ask you some questions? But top level executives usually are aware of situation what's happening. But there's again there's never certainty of deal getting actually closed. Yeah. Yeah. So, that's why most of the sellers they just they don't feel comfortable kind of like opening up and letting you speak to everybody. But because what if deal is not going to close there like million examples where you think people you think about the close a deal and the deal collapses and we had this you know just recently. So winning hearts and minds is the most probably challenging part of M&A. What steps you take after the M&A? After you close a deal, what do you do? Mostly it's more important what you do before you close on the deal. Then like after you close on the deal, you want to be in position to execute on the plan or ideally if you're planning to do some sort of riff, you want to execute on the riff, maybe have a previous management team if they stay or they leave to execute on it. So you come in with some positives. So if you enter into a deal, you close a deal and then you announce you know 20% reduction people it's it it's challenging it's challenging to convince the rest to believe it's a good idea whatever you guys are doing. So before the deal we can talk about what we do before the deal what we do after the deal. After the deal, you want to have like, you know, basically town hall. You announce on the transaction and you just start kind of digging in and try to convince people, try to convince them you are, you know, you're better, their lives will be better, uh, the lives will be stable, you can bring some maybe something new to them. What we like to do, we always, you know, start with people wise like some new benefits roll out like, hey, yes, unfortunately maybe we had to do this and this, but you know, if you announce some new benefits roll out, which are way better than you guys had just a few months ago, you should be able to convince some people, but again, it's still not guaranteed. There's a lot of risk in it. So, when you're making the deal, um, do you do that intuitionally or you go by the numbers like or both or you talk to mentors? How you do that? the way we do deals now and the way when I started it was like two different things when I was just getting started was like more I was I love the hype and I was like oh this company was really hot let's buy it it's a great idea we're going to have a lot of hype in the industry people going to love it you know we're going to be build pretty big business so I was like more risk I didn't understand risk at all now it's totally different so number one what you typically do how it all starts you put a performer financial model that's how it all starts you put an Android whatever the you know the SGNA reduction you put this all into numbers and if and you see on the numbers if you can make it work or not typically you know usually you can pretty easily just through the financial model that's how it all starts that's when you understand okay this is going to work or this never going to work so you're basically merging two performers together yeah two performers together you work together with the team and look into all the pipelines of deals and you see like you know who's going to stay who's not number two the most important thing is a or chart you know there are many deals that you know became either successful or not successful just simply on was the org chart messy or not. So if you can have a clean org chart like before you usually do a deal you understand like how it's all going to look like day after you close a deal. Do you normally keep them separate or you merge it? No, you have to merge it. You have to I'm now I'm a huge believer. I made mistakes where we kept a lot of stuff separate historically. Now my personal belief and recommendation you know you want to run as fast as you can integrate the work chart put it try to put it all under one brand if you can as quick as possible and know the most important also like you need to combine some ERP systems you know HR system ERP system I would say those two things are very important then operating system so the accounting system account the most important yeah yeah it's like usually if you do big deals yeah yeah then same HR system and and what you will see what I've seen that people just used to operating as their normal way even like my team historically my like legacy team so when we push and they will work with some major HR system like ADP and some other one and they'll tell you no it's going to take 6 months to merge theirs it's going to be super difficult but then you ask like simple questions you challenge people but what if we just start from scratch what if we just became a client of yours today like can we just you know on board 200 people on this underchar and usually it's yes and same with everything else like you know from Netswuite if you use a netswuite for your ARP side you know they will come up with some complexity they'll tell you it will be 7 to 9 month project or 12 month project and I always like to challenge those timelines cuz you know I just don't believe it and when you challenge people you get of course better results so so for me again some of my mistakes in previous deals we did not move as fast as we should have on all of my future deals you know you want to execute you have this plan and then people say you always have post deal you have like a 100 day plan post deal and you want to have that plan done before you close on a transaction. How many deals you have done so far and what was the smallest and what was the largest? So I would say like recently for badge we did uh in the last two and a half years we did like two deals. Mhm. So we completed this company in HS in Florida and we bought which was one of our biggest deals company called Next. Next was again the most probably one of the most complicated deals. It felt like it was you know $10 billion transaction. We had seven largest law firms in the country representing us. We had the lot the deal was sponsored by Brookfield was complex cap table or yeah the cap table started with a cap table. So the cap table on the next side was you know the next transaction before it was announced it started two years before it happened. It started with simple me crazy Andrew coming up thinking it's a good idea reaching out to Goldman Sachs investment banking team and asking like hey what do you think about this deal? Can you introduce me to the decision makers? That's how it all started. And when it starts typically, you know, just conversational people don't really trust each other. They're like, "Ah, it's another guy. I'm not sure he's credible buyer or he's not a credible buyer." And you just start with some sort of relationship, right? And over time, you know, people usually, you know, unless you start spending money on a deal, people don't still take you very seriously. So, the pivotal moment of that deal was when we hired an investment bank, which was in Oppenheimer. We hired a real one of the top law firms to represent us on the deal. And that's when people start paying started paying attention even though it's still you know they on their side we're trying to find some others options for themselves and me and my side you know you never have certainty you put some effort you put a lot of money into a deal and there's still no certainty deal is going to get closed so the the comp that just again the start of complexity then 6 months before deal closes so that's when you again we submitted an LOI we asked for exclusivity we finally agreed on exclusivity after like 60 days of negotiation uh on LOI Okay. And that's when you start diving in and then you do like some basic work, you know, both sides usually do some work on both sides. But if you have a real bank representing you, which means, you know, you spend the money, people kind of start opening up and you have some sort of institutional representation. That's kind of like usually a pivotal moment in the deal. And then you you what you do you want to basically move as fast as possible into signing stock purchase agreement spa agreements and that is still far away from closing when you sign the spa. Me at the beginning a long time ago I thought when we signed SBA like this is sort of a done deal but uh in that particular transaction we signed an SPA in November and the deal ended up closing midFebruary. So you still have, you know, November, December, January, February, like almost like, you know, four months of work even though SPA signed most of the stuff already figured out in SPA and it's still not closing. That was just like one of probably thousand complexities in that deal like how it all just started. Then you have a tech probably. Then you have a tech, you take the diligence, you think about how you're going to merge us, you know, who's going to run it, which team's going to run it. Can you go back to the work chart, you see how it's all going to look like day after you close on the deal. But typically you know in that particular transaction was you know we were also acquiring very hot company. We acquiring 200 million of paid in capital into technology stack. The company before we acquired raised over 275 million in cash raised. So next raised 275 275 before we acquired it. So the cap table was completely messy. There were a lot of secondaries done. So there you how much you purchased for? Uh it it's kind of confidential but was roughly around let's say between 100 to 200 million. Got it. Got it. You got a really good deal. So yeah, we kind of we got a we got a deal. Yeah. Intuitionally what you thought is going to work out and what worked out well what didn't work out on that. You know we knew that there were a lot of cash went to technology stack. They had some very well-known people that were part of you know Google maps team and PayPal team building the tech long time pen building the tech. But we thought that you know some of those people that were part of it they didn't really understand the industry well some of the technology that was built we were unsure and when you do again some sort of you never fully understand unless you're like fully under the hood. So like you can show demos and know there's demo environments but you it's still unknown. So after closing the deal the technology was better than we thought and the business side was in a way worse shape than we thought. That's the best way to say it. Got it. technology we we got very lucky. It was better than we way better than we thought we ever thought that was there. Yeah. But the the business was way more challenged. And again, we bought the business which was burning 50 million prior year prior to that was burning 80 million a year was again we were in the middle of this you know venture capital people were just throwing money for growth at any cost. No one cared about the gross margins. They just cared about just know adding some new logos. again taking on a deal that losing 50 million is is a is one of the most challenging jobs. Yeah. Probably in the world. So basically merged with three companies, right? CDL. So we Yeah, we we bought HS before and then we we bought a few months later we bought Next. Next. So basically three companies. Three companies got put together. You're making about 100 million each, right? Roughly. Roughly. And now instead of just being a brokerage, now you're more technable. Yeah. We always had the technology. So like what we historically had I was always a big believer in simplifying customers life especially if you deal with this you know fortune 5000 type of companies low you know you call it client base and my thesis all the technologies that we built from when we started in 2018 were simplifying user experience and simplifying pricing how can you basically bring door dash experience for the most complicated piece of supply chain that was like the thesis like you can order food from your favorite restaurant write to your app in less than 5 seconds. You're hungry been doing something. My thesis were the same. How can you basically replicate that door dash experience for this very complex space around the ports and all the complexity around ports? How can you simplify pricing? So we originally built all of those user interfaces, shipper interfaces and we digitized like 1.1 million probabilities on the prices. That was like a interesting what next had they had like all of this kind of brain technology like you know software for basically brain and this sort of marketplace and an app that was used by like 30,000 independent drivers. Strategically those two technologies made absolute sense. You have like you know incredible user interfaces on one side that helps you continue closing some new fortune 500 deals and you bring like all this core backend automation AI. So Nex had they had a more of a uh truck drivers right? Owner operators. Yeah, it's still asset light business model. Got it. And their business model is kind of a uberization kind of thing. Uberization they have ports of ports, right? Yeah. They basically customer is more of a owner operators and your customer no it's still you know it's it's kind of two-sided marketplace. So you have people that execute right which you see independent truckers and on other side which I believe also incredibly important. Uh historically said it the most important but sorry for that. um it's your fortune 5,000 client base. Let's go back. How did you start with in brokerage? How you got into the industry? Again, I have like a very unique story. So again, like when I moved to America, my my entire mission in life was to go to work for Goldman Sachs. Wow. Uh I was from very young age. Oh, you're working with Goldman Sachs? [laughter] No, I'm working with Goldman Sachs. Yeah. Um when I was very young, I was like 100% on the mission coming to America. I'm going working for Goldman Sachs. And at age of 17 18 I was in Los Angeles like by an accident and I had a friend in Chicago who offered me like hey do you want to come to Chicago check it out and I'm like sure Google picture Chicago like looks great he's like by the way I have a friend who owns his own truck he'll give you a free ride to Chicago and you came to Fresno right you I used to live in Fresno California and then I moved to LA for a couple over the summer I was in LA I had nothing to do um originally when I moved to LA I moved to Compton oh wow for me it was LA I didn't know it was Compton And I had no I had no idea. I was, you know, had no fear. Just a kid trying to figure out his life. It's a summertime in LA. So like for two weeks, I was trying to figure out what to do in LA. And then I'm like, "Okay, this is sucks." Um, let's, you know, it's not what I saw in the movies. And my buddy's like, "Hey, by the way, come to Chicago for a couple weeks. Let's check it out. It's beautiful city." He's like, "Go in Chicago now, you know, from Fresno to LA. Google Chicago is like such a beautiful, you know, downtown." I'm like, "Sure, why not?" And um so when he arranged me a ride with a with this independent driver, he started negotiating prices with his customer in front of me. And the guy, you know, he didn't have like perfect English, but he was just, you know, bidding his customer up and was like Friday afternoon. And this guy squeezed additional $2,000 price from the same customer who called him like 2 hours earlier. Same client, same weight, the same details. He just negotiated $2,000 extra spread. I'm like, "You can make $2,000 spread just by negotiating." He's like, "Yeah, that's, you know, it's Friday. You know, it's about intuition. You know, you have to feel like, you know, when people are desperate and, you know, LA, it's a hot market now." I'm like, "Oh my god, you make $2,000 spread like for no logic, no reason, just by, you know, hustling." And for me in my, you know, I spent like 5 days with this guy and I'm like, "Wow, this is like the coolest thing ever." Like, you make so much money just like, you know, just by negotiating. I'm like, "What if somebody can do what?" And I was at that age I already knew about you know what NASDAQ did you back whatever in the ' 80s with digitizing stock market and the whole brokerage was disrupted. I'm like somebody needs to do what NASDAQ did whatever in ' 80s to stock market and bring it through this industry. Yeah. So I moved to Chicago couldn't find a job. Took me a couple weeks but then I found a job that basically I was hustling aside doing some other extra side jobs from pizza delivery and some to survive and I found a job in a logistics firm and then within like few months at the age of 18 I started my first company. Wow. And the first company was you know the thesis was no let's digitize like rail pricing rail network rail rail ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra ra rail but take rail pricing digitize it similar example and so that's how I got into industry just by again thinking about how can you just simp simply thinking about digitizing the pricing right kind of simplifying the pricing and kind of giving more certainty into pricing but then it's still you know that NASDAQ experience is still kind of in the works you still see a lot of like even like asset light freight brokerage firms could be like even Uber freight. No one's still figured out how to build that NASDAQ of logistics. It's still far away from there. I think I'm very close. I'm not going to mention too much on it, but I think it's still possible how to do it. And you know how you can bring that sort of exchange like mentality and create environment from trust, credibility, credible players and certainty of truckers. You know, like same way when you sell your stock, you're getting media liquidity. there's still a ways of of doing something similar in this industry. You basically started as a dispatching right between logics then kind of you evolve and adding the teams and how long it took you to to get to the first acquisition. It probably took me like 10 years. 10 years. Yeah. Again, it's all my 10 years journey when I first learned about M&A from my first mentor Patrick and constantly strategizing with him, constantly doing this. Didn't know anything about M&A. I didn't know first of all you know now I like to say that and we spoke about it before it's all about the credibility you know credit credibility and character like three C's I like to say it but the credibility are you credible buyer so at the beginning I was definitely not a credible buyer and over time I think I became a credible buyer so when people engage in a conversation with you they feel like you know he is a credible buyer and it starts with again from all of your adviserss around you your teams who you are who's your backers like everything else it takes long time and long journey but you learn when you merge a company uh when you acquire a company you normally use Steen or you have a special uh after acquisition team who will do the integrations so now we usually like to I I got very lucky so I have like an excellent board of directors now who are very engaged and very involved with tremendous public market experience so one of my board members not going to mention his name but he was part of probably the most successful rollup strategy in the public markets on Wall Street and generated again over 15 billion of shareholder value. Mhm. So um now we have like an excellent team. We have like call it you know four to five core people on the team side board side and we have a couple guys representing us on the buy side. I have like one of my team members. He was my original one of my invest part of my investment team from Brookfeld and he joined us and his previous experience was at Goldman Sachs. So we start with again non-stop daily meetings, daily mammos starting with again from request at the beginning again it starts with you identifying a lot of targets and thinking about why why this potentially makes sense talking to a lot of people and then convincing them which is not easy cuz you know you're dealing with some individuals that build their businesses for 20 30 years. Yeah. and they like over the kids maybe some of them might not have a succession plan some of them might have some unrealistic and they negotiate an LOI like they think that LOI is that final document which is not usually what I've seen that when you sign an LOI and then when you have a closing everything looks completely different cuz people think to inflate the numbers when they tell you what it is and you sort of you know I highly recommend just you know just sign an LOI and move forward move as quick as possible and then start digging in but some people take it again the first step very seriously Yeah. So, uh that's how it all starts and again and then you when you sign an LOI that's you know when you start digging in. So, usually we do like daily multiple times a day daily meetings. We put somebody to be a lead to be like a sort of project manager. Mhm. We like to immediately hire right now a firm to help us on the buy side to do a QV quality earnings on the buy side. That's how we do it right now. We don't want to like you know gas and do our own work. It's easier just to bring like a professional team that can do it and within like four weeks they basically do a POV on the buy side on your target external accounting for it's external account. Yeah. Yeah. You bring them in and they sort of independent. They know they still work for you but they're like fully independent. So when the seller is fighting with you like hey I told you it's 10 and the QV firm is like no it's one. Yeah. And um you know sort of you kind of help you bridge that relationship with the seller. Got it. Makes sense. Makes sense. And then you have again a team of great people and you starts with you know doing all the diligence from business diligence, HR, financial diligence, top executives, work charts, customers, you know interviewing some top executives also at the same time starting lawyers starting working each other what's very important in M&A to bring very good law firm that has experience in M&A because usually what I've seen that a lot of entrepreneurs in our case they've been like so deep in it and I was like also historically and they're like you know how I'm going to figure out this what if this customer leaves what if something doesn't work out here or what if this numbers were not right or this person leaves or he goes and starts a new company tomorrow like proper M&A law firms already know every potential complexity that could happen it's already all been figured out so when you think it's no I I don't know you feel like panicked I see it a lot if this what if this you know there's wraps on warranties and that's when you make still make a business decision do you want to what kind of reps and war it is you negotiate with people but it starts with an excellent M&A law firm and when you have excellent M&A law firm and usually what I've seen deal collapses deals collapsing if you have not sophisticated uh lawyers on the seller side who's your best or preferable M&A firm I like to use all the big ones from Corkalis DA Piper Lem Kulie um Kton's good firm M and uh now we use on our current transaction we're working on Winston. Yeah. So usually like all of those let's say top seven firms in the country. Yeah. Cool. You mentioned about you had board of directors. Uh did you came to this point yourself or it was mandatory [snorts] by like after the merge or by investors? If you're really serious about building a big business or potentially exiting something, you need to be credible seller too, right? because you if you're not credible seller if people don't really trust you they're not sure. So I started on the journey of building proper board of directors I know five six years ago when was it what was the company revenue approximate at that time I think it was like maybe we were on the way to 100 but we were not at 100 yet. Yeah. So at that time you started actually putting your board together. I already knew it. Yeah. I always want to bring some people that can be very helpful strategic and help me. Mhm. And how often do you get it? Bring investors, you know, be more credible in front of investors, kind of all of those things. Yeah. You have a quarterly meetings with them. At this moment, I think we have weekly meetings and I have some board members that I speak 10 times a day. Got it. Because you have so much changes happening like changes, but we're working constantly some deals. We're talking to some investor. There's some new stuff happening all the time. So, you always want to be like, you know, want to throw some ideas on someone else. Yeah. And not on someone else, but kind of discuss it, bounce it with each other and think about it. what is the exit strategy? So the exit strategy starts with timing when you discuss about cycles. You know my industry post 2022 went through a significant down cycle which again I've young but [snorts] I've already been through like three cycles before this and you always want to time it right. You know in 2021 foolishly enough you know I had some very interesting offers on the table. We actually had in 2022 an offer from Goldman Sachs. So when in 2021 I had an offer to sell the business for cash. I decided no, I'm up to something really big. Then in 2022, I end up getting offer from like one of my dream banks and I was like, wow, it was so good. And then that deal when that deal did not close get rescheduled, you were like, oh [ __ ] I should have taken that offer in 21. So it's all about the timing, timing this correctly. So this industry while my industry went through a significant down cycle and valuations are, you know, some cases, you know, 50 to 80% to 90% down. you want to be in our case we want to be a buyer not a seller now on exit side there's a lot because again we're dealing with a lot of potential again we executed on this big M&A rollup strategy there's a a view where you know public market makes sense and the reason public market makes sense so you can leverage your public equity and give some sellers instead of just giving all of your cash you can give them equity they believe in the story right well you can do the similar thing when you're private equity back business and you have equity versus this but people are usually more skeptical towards you know what's your private valation than from what's your public valation is right so that's how you convince I think it's more for sellers and then also you're getting you know if you want to raise money for some deals you have cheaper cost of capital if you're public but again it's all about back to timing like can you time this right and u last two three years were not the best timing for an exit unless you're a AI company [laughter] and uh Even though we were like one of the first AI companies in our space and building first AIS in the space but still you have to be like you know AI first business. Now you're on buy stage basically. Now we're in the buy side. Yeah. Yeah. By side. And what is your ideal targets? Uh 100 million revenue plus usually like a minimum threshold for us and have to be some sort of stable businesses. Now we're looking for profitable businesses, profitable companies and but usually what I say the bigger the better. Mhm. The bigger the deal the better the easier to close the easier to raise money for that particular deal. And what type in the logistics we're looking for strategics again either like we call it customer expansion lane density expansion geographical expansion team maybe getting some business development team that you currently don't have. There has to be some sort of strategic version value around this. But now our view is look we have this great technology stack you know we spend spent eight years building it. We have 200 million of paid in capital into this tech stack. Mhm. And now you focus on buying revenues and putting revenues on top of your tax stack. And that what makes us you know kind of unique multiplier of evida that size. Normally the challenge right now when you go through down cycle a lot of sellers are not comfortable just selling them. They might have depressed ibidas. Mhm. Then maybe we're doing 10 million of ibida for 10 years before 2023. Yeah. And then 2023 their ibidas went to two or four. Yeah. So you're trying to find that middle, you know, somewhere to be in the middle and you're trying to kind of convince sellers this is a good deal. There's a lot of upside. So like it's called, you know, I call it financial engineering. It's very important and being very creative. 100% buyout or like 8020 like you normally keep depends. But I think it's better just to do like a full buyout and but you know maybe have a seller join the team. Yeah. Be part of the management team. Mhm. You know, I like to call it, you know, have somebody come at the, you know, managing partner. Yeah. Kind of use one of those kind of like big how big investment banks do like, you know, they have managing directors, managing partners, give them those titles and have them help you build and execute on your strategy and give them additional upside if they're up to it. But some people just, you know, if people in this specific environment, if people just want to take 100% cash and be out, usually it's more risk. So you again, the purchase prices are way less. Yeah. Then you can engineer it if somebody's you know rolls some of the equity and you give them more upside if it all works out. Do you normally have all the uh list of targets uh in your playbook somewhere or so my playbook on M&A targets is most of my targets is kind of like my personal proprietary deal. Uhhuh. which is sounds scary and bad right that just one guy runs with it but now we have also my team running with us too and we're just trying to meet as many potential sellers have at least meeting introduction meeting I constantly work with all banks mid-level midsize big banks and constantly just asking them hey what the how the environment looks like do you have any presentation can you give me an update and I just had a meeting on Friday with like one of top three banks in the country and u I think they're like the biggest bank and just asking them like, "Hey, what do you think? What may be in the market? What are you hearing?" Cuz usually there's always some rumors. Yeah. How maybe this company is not doing well. This guy might be interested. Maybe this private equity company owns it, but they already end of their private equity of their fund cycle. So you know that they have to sell maybe by end of this year. Maybe there's a ways to engineer it and there could be some other bigger deals. you kind of hear rumors like there is like I'm not going to mention name but there's like one very well-known company that by you know it's a very very large logistics part of this kind of giga economic company they have a big logistics arm and I know it's not strategic but it has a scale so in some cases you just want to you know be aggressive find somebody to represent you so you're credible and try to approach them to buy it even though it could be like 10 times bigger than you are today if one day you would exit uh what is going to be the next play depends if I stay on board, right, or not. If whatever the exit is. Yeah. But like I I I personally have tons of energy and a lot of interesting, innovative ideas and I'm working on something very unique and interesting. I'll tell you later on, but um yeah, tons of energy, tons of great ideas. I like sort of building kind of marketplace type of businesses where you take on something that asset heavy or balance sheet heavy. You don't really own it and you build a basically simple distribution channel for the world and you put it on top of and you just consolidate all of those assets all over the world and package this to Fortune 5000. Most of the business owners or founders normally exit with do not compete right in the industry for their particular industry. Yeah. For that would you do that? Yeah. Yeah. And if you do that then what is going to be the next industry? Incredibly curious about a lot of different subjects not just my current industry. Yeah. And now in this kind of age of AI I think you can be you can become like in subject matter expert pretty quickly. So you don't really need to go like very deep. Right. Yeah. So you can get into like any other innovative but I I like to enter into something very interesting, very unique and that you can kind of change the world and create something very unique and take on some major challenges in life. Do you believe that uh running a business almost the same like any business like as long as you know the structure? Yeah, right now right now few experience yeah a founder. Yeah. And in my case, like I probably have 10 plus years of making like thousands of mistakes. Yeah. It's way easier when you enter anything else. You can just move so fast from hiring to getting up to speed to everything else. Bring credibility, creating teams. Yeah. Understanding, you know, how to build the great teams of people from HR side, from financial side. And uh again I like to say like you know my my most important jobs I like to work with and start something new is of course you have you need to have a great chief technology officer. Mhm. You need to have chief great actually I would say probably chief product officer more important at the beginning the chief technology officer great HR talent acquisition team and great FPNA probably more important than typical CFO. Yeah. And somebody who understands how to make money. That's usually what FPNA people do. Yeah. where CFOs usually are more more working with external banks of bringing money in right understanding when they understand your business model properly they can just be um tell you like hey if you make some moves here and here and here you'll make extra 20 million VBA and that's usually like people on FPNA side they just again just take a bunch of data and they just figure out how to make money with it how big is your finance team I think about 20 people plus today it was bigger before do you have like FPNA, CFO. Oh yeah, we have an excellent FPNA and we have a CFO with public market experience. What size do you think companies should add a CFO? I think it's important to have somebody on that side pretty fast. But I would say, you know, as soon as you have like 10 million plus in revenue, you need to have a CFO. It can be fractional. Correct. In the beginning, probably potentially. Yeah. Yeah. But I think if you have again excellent CFO who has that FPNA maybe experience. Yeah. He can help you make money. Yeah. I saw a lot of companies and business owners, founders and making a mistake of not having a strong uh financial financing leader in the company even doing like 50 60 million they collapse. Why? Because they don't have someone in the finance blog really supporting them and giving them numbers. Yeah. I think it's one of the biggest mistakes founders do. Yeah. They try to save on that block which is really really crucial. Yeah. A lot of founders still operate on cash basis right instead of gap. Yeah. and um and they think they maybe have today some money in bank account because yeah they're profitable and in reality they might not be. So I agree it's very important to have a strong CFO what do you normally choose like a month over or year-over-year growth or IBIDA timing again so we're interesting cycle now so now we're in the cycle where ibida is most important right growth is not that important anymore depends what you do if you're company you want to grow again it's very hot and you're venturebacked if you're in sort of more stabilized type of business and been around for a long period of time Now eBay the most important of course probably balance right I guess balance yeah like rule of 40 yeah it's like 10 or 20 but in this particular environment people just value more IBIDA Ibida story in Ibida yeah yeah because that's why most of the private yeah growth you can explain the growth ibida is very difficult to explain even though you can still always explain what you're doing again it's all goes back to telling the story correctly what is the um on the company when you're buying saying what is the minimum EBIT you're looking for like percentage wise of the revenue could be small if I believe that I can get that because of synergies yeah can get that IBIDA too again depends like our industry is known for like 5 to 10% IBIDAS you know you might be buying the company with like two three doesn't really matter usually if it's depressed IBIDA and you know what you're doing you can increase it quickly that's an opportunity for you right so that's what we're doing right now would you be interested in buying like a fuel car companies or not it's not strategic question Nothing to do with our core business. Yeah. Got it. You are mostly work with ports, right? Ports we we basically I would take on on on the service from say those Fortune 500 companies. Yeah. It's not just typical logic logistic companies. No, no, no. We Walmarts of the world, Kroger's of the world, big big big boys. Andrew, uh what technologies already transforming the logistic industry? What do you think about like integrating AI or robotics? And do you think robotics will replace the trans transportation in the future? Number one, on AI side, I'm a big believer that AI, you know, solve some major problems. And again, back from automation. I like to say it instead of hundreds or thousands of people analyzing some data. We have an AI analyzing data for you. You basically apply math to solve problems. So unless you have like a clear solution, you don't just build, you know, you don't bring AI for sake of bringing AI. actually have you know you're solving some big problem like so one of our tools that we build called like next best move.ai AI. So we sell it to let's say all large fortune 500 companies and in many cases let's say when they need to make a decision and they internally have again hundreds of analysts and there could be some very large company or thousands of analysts. How can we tell them what their next best decision should be on the logistics or global supply chain side within a second? How can we optimize create and and so what we did we built this you know a very unique optimizer that kind of analyzing global supply chain network and tell them hey here's your next best five or 10 decisions you still have a person making the final decision but you do need again so many people crunching the data for you and then second where AI works you know AI what we do we focus on internal automation of course how can automations at scale work how can you kind of instead of having again a lot of operators making a lot of decisions and doing all the busy How can a potential AI internally help you solve that? And then through our app that we built, we we're trying to solve as many daily problems for those independent drivers though that their productivity goes up. So we have a lot of studies where we increase their productivity by 150% on a daily basis which is significant. Mhm. That's kind of my approach right now through technology like it should be again solving major problem for the customers kind of simplifying their lives and increasing productivity to what do you think is going to happen 2030 I think we're going to start seeing as we see already a lot of like you know autopilot you know on the vehicle and the personal vehicle side is already growing I think there will be some winners and but let's say if you look at specifically to logistics industry I think that AI and you know autonomous trucking it's going to compete directly with the rail a lot for like a long haul. For the short hole it might be a little bit challenging because again it's still heavy and then you still deal with all of the regulation but I think finally we started making some progress on this side like back in 2016 when I was originally started thinking about this it was way too early now where AI is at today it's very possible. What is the biggest cost in the piano of the industry like labor and the gas? Yeah. Labor and gas usually labor and gas what percentage? I think it goes like you know labor goes like 35%. Yeah. Gas goes about 35 to 40%. Yeah. And the rest you have you know equipment and stuff. So basically just imagine replacing that labor. Yeah. Yeah. Maybe even you know you can save a lot on gas if it's you know electric trucks. Yeah. At least at least between cities, right? Like big cities like but within the city then you can still have the human doing it but within the big cities you can have the autonomous drivers doing that. It's going to be huge savings. Huge savings. Yeah. Yeah. And probably replacing the gas with electrical probably. Yeah. Let's see what you know how Tesla project goes. Yeah. They're basically replacing two things then. Yeah. Right. They're replacing both. Yeah. They're replacing it will be significant you know cost cutting. Yeah. For companies over time. Interesting. So most drivers can be jobless what in 10 20 years look you know they might be able to get there some some new jobs some new industries but you don't see that many new people joining the industry you see like you know people still kind of like a bit older so they kind of exit the industry retire and you don't see any new people rushing to enter the industry so I think it's will be very natural within like next to 10 15 20 years. But then again, now you on the technology side, you go back and you look into like, you know, can this is infrastructure, electricity grid is ready for all of this. Yeah. So, I think we're going to have some interesting um I I don't want to call it crisis, but interesting pivot mode in 20 28 and we'll see if our electricity grid can handle all of this and I see a lot of interesting startups solving it. Yeah. from data center side and and now you see from even like electric vehicles will there be enough charging stations all over the place and so I'm I'm interested to see how that kind of gets sold so I think electricity and now you see electricity trading become an interesting business when people kind of sell underutilized capacity so um that's I'm I'm again very curious around that and uh I believe because of the data centers now we need twice more grid than before when I need even more. Yeah, with with the car and the like logistics might be even more correct. and can the grid can handle. Yeah, that's Yeah, you saw maybe in few latest interviews from Elon and Sam Alman where you know to double current not just capacity but intelligence of our AI today to double it you know to increase it maybe like double it or increase it 10x you need to 10x your GPU capacity. Yeah. and which is very challenging that AI infrastructure is becoming very interesting space and um I'm very curious to see what's going to happen. Uh now it's more a personal question like uh about your business philosophy and your day-to-day like uh how you plan your day, how you plan your week, months, I don't know. It starts with you know your stress management. Mhm. Right. So I usually plan my days. I wake up early. You want to be as you know cuz all of our jobs are incredibly difficult and I used to call it's like a war zone. you come every day and it's a war zone and you have no idea where you're going to get hit and what's going to happen, but you're always in that crisis mode. So like one of my personal most interesting thing what I've learned over the last I would say probably 8 years in life, I learned to manage stress and I start my day always with TM meditation. Like I I I go to the gym at 5:00 a.m. in the morning and then at 6:00 I try to do TM which probably one of the best things I found in life. and you are very stress resistant and you can go through sort of incredibly calm and through any sort of stress during the day and just like normally react to any crisis that could happen to you. So I'm like very stress ready towards anything during the day and then my personal trick in life which is not the most healthiest habit but I became well-known uh cigar smoker. So, I do, [laughter] you know, usually around 1 or 2 p.m. I take a quick break, my my lunch break, and um I smoke a quick cigar and calms me down even more. And you're just incredibly, you know, stress resistant. Yeah, that's how usually how I start my day. So, so nothing can get me through the day. How you plan your year or like quarters? I'm not sure if I'm like planning this. You know, we always have a budget. you start with a budget, but there's so much unknown and cuz we're in active M&A mode, you know, we over the last 12 months, we worked on two very unique, very large M&A transactions. So like one of the deals we worked there for like 9 months this year actually started like end of last year and rolled into this year and we end up getting outbidded by one of our competitors at the end. That was like incredible transformational acquisition that we're going to add like over 200 million VBA to our business. Mhm. So when you work on those type of deals, right, how do you manage, you know, we just focus on trying to get the deals done, trying to raise money, constantly meeting with the boards, constantly, you know, hustling, right? I I took like over 100 flights just for that deal and we end up losing the deal. So you know if you say like you're like so you know we were convinced we were planning the deal is going to get closed then you lose it and you know it could get into your head and you learn that even those type of situations where you feel like you get in it you're like very certain and something doesn't work out your way again you you immediately try to pivot and you find a new solution you find a way to get some energy because you know your team loses energy and it usually look on your founder if founder you know gives up you know you worked the entire team worked on this big deal. Mhm. It was so transformational for so long time. We end up raising a lot of money for that particular transaction and we couldn't use it. Yeah. Because usually was specific towards that particular transaction. Mhm. So how can you plan and you know and then you pivot and you find another quick deal that for whatever reason has an emergency and urgency and you move really fast. You're trying to close the other deal. So my approach again be very optimistic you know you keep move as fast as possible like with tremendous speed. Yeah. Cuz I had a couple times that I was like slow. Mhm. too slow on some transactions and I'm incredibly convinced like moving really really fast even you make mistakes but you just make faster decisions and move faster. So um what helps you to make those fast decisions? I'm naturally that way again my board became I I have like a very conservative board of directors which usually again more conservative and they want to think stuff through. Well, I'm you know, if you have I actually had a meeting with one of my call it mentors and partners that we worked on a deal and he was on the opposite side who's incredibly successful. He built one of the most say top two most successful private equity businesses in the world very well-known guy. So we had the conversation you know how creative we were towards our last transaction even though we didn't close but we just post the deal we were through analysis. We're discussing that when people get older in life, their risk they become very sort of risk reverse. Yes. I also got older quite a bit but and I made millions of mistakes and you should have put me in a position where I became sort of more risk averse and I do understand already way more risks. This colleague he said that Andrew you have it's a good thing it could be a bad thing. You don't understand the risk. You're like you're just so risk such a big risk taker. So like I'm if I'm seeing something big I'll take a huge risk. I'll put tremendous amount of energy and effort into it. tremendous amount of creativity and I will just run with us. Hopefully, you know, my team will help me to figure this all out. But when you have a good team, you know, kind of cleaning up behind you and you move really, really fast. So, I'm convinced moving faster is still better than slowing it down. Cuz in my career, again, I had some transformational deals collapse cuz we did not move fast enough. What is the support system looks like? Like who supports you? Like uh besides the board, your wife, my wife helps me. I don't have a chief of staff. my chief of staff experience. And again, some people got lucky. But when I had my very first company, I think it was like 10 years ago. I thought I was very smart and I needed this cuz everyone has an assistant. So, I hired an assistant and I had to spend more energy thinking about what kind of jobs and tasks to give her cuz it was too stressful. She was just sitting doing nothing. So, I had to think twice and I'm like, "Oh my god, it was so stressful." So my experience having like you know some sort of chief of staff or assistants were difficult. So now I just I just did it faster myself. I just I always overbook myself which is impossible. If you have an assistant it's impossible to do overbook and I maybe a little bit stressed out. I learned how to deal with it. Yeah. But that's how I became hyperproductive cuz like even when I travel to some city and I have some I might be in you I might have one meeting in San Francisco or next week and I I try to book like six other meetings and I stretch it to impossible but I always pull it off. Got it. Interesting. And and you still go to office right like every day? Every day I go to the office outside of when I travel. I go to work on Saturdays and u I like to work a few days a week and Sundays I usually kind of more reading books and strategically thinking about some new ideas which usually some of my best ideas came up I came up with on Sunday during reading some interesting books. Yeah. And and Saturdays you work yourself or you have some other teams member. I have some team members coming in but usually I just I like to go to the gym and just calmly sitting and just catching up on emails and thinking about stuff. How many books you read per year? I don't know. I used to read way more, but now it's like sometimes what I've learned when I read a book and something gets too boring, I just learn to move on quickly. It's like I'm not getting caught up on something that just demotivates me. Yeah. And sometimes like I don't finish books, but I I definitely buy like, you know, like 50 to 100 books a year and I don't read them all, but I just like constantly collect collect some interesting books and then whenever whatever I'm in the mood for. Yeah. How do you find mentors? It started with like when you are one of my dear friends Charlie unfortunately whatever happened to him we were when we were both young we [clears throat] both had this thesis you know when when you're young and you come to somebody older and you actually with no agenda come and ask for a piece of advice they will always give it to you now Steve Jobs has a famous story when he was a kid whatever 11 12 I don't remember how old he was when he called the C of HP and asked for some parts and he just gave it to him he just called him he just asked ask. So I'm a big believer just like in asking people. So my for for a very long time since I'm very young I I I've been lucky and fortunate enough meeting some incredible people some of the most successful uh let's say Forbes top 50 entrepreneurs in the world. Mhm. And it's always starts with I had always this rules from a very young age when I meet somebody important enough just ask for coffee. Worst case I will say no either yes or no. I hate maybe. So, I've been fortunate enough of just ask without agenda, without asking for any money, just meeting phenomenal people, asking them for I would love to get your piece of advice. You know, one of my last deals I worked on, I I run into randomly in Los Angeles at the hotel. I run into Henry Kravis, who's the founder of KKR. Mhm. And I just came to Henry and I asked him like, "Henry, would you mind if I can buy you a coffee? I would love to ask you for advice. I'm working this and this deal." He asked me some questions like, "Andrew, tell me what do you do?" So I explained to him and he invited me to his office and and my last deal I was breaking down and all my investment memos that we were presenting to investors and the model and we worked with him on the deal. Wow. So I'm constantly meeting some similar level individuals from very young age. So again back when you were young easier when you would actually from your heart come and ask for advice. Nothing, no agenda and you try to do something for people. So I see a lot of people sort of like you know they're just trying to get some something from you quickly. They try to some randomly people just well I'll come and ask you for money I invest. I don't do this kind of stuff. I just honest just come in asking for like hey I'm working on this and this transaction and couple of years ago like eight probably eight or nine years ago I ran into George Leman who's the founder of 3J Capital and Charles Ko. Mhm. I maybe told that story many times and same story very random run into by an accident asked for coffee they both agreed separately was in the same location and I just asked like hey how can I build I ask George Lima George how can I build a billion dollar company and after I explain him what I'm doing he's like stick in your industry focus on technology it sounded simple but if you know if you think about it more yeah what keeps you up at night right now work related I'm constantly thinking about some like next deal something you know what else I'm working on at that period of time. Mhm. So like one of my last deals I was working on that usually kept me up in night and I was just thinking about some solutions and coming up with some ideas. But usually like right now I just became again very stress um resistant. So depends like what yeah family side or work side but like I'm just you know you do the best you can you work very hard you put a lot of energy into it and you will be fine. Yeah. Do you have a magic number for exit, IPO, strategic buyer op like for this particular business or in general? For this particular business, I do no we we we are working on a transaction right now. I cannot really disclose too much but yeah. Yeah. If you had to start over today with 1 million and what business you would do and how you would do it. AI infrastructure. AI infrastructure. Yeah. A worst advice you ever got in M&A? Not integrate businesses right away. Keep it separate. Yeah, my 100% experience. I lived it. Today we had uh Andrew in our podcast uh one of this fastest growing uh logistics uh and uh technology companies in logistics. Andrew, we discussed with Andrew about uh his first deal about how he is doing the other deals, how how actually merge multiple uh hundred million dollar companies together, right? and how to build a billion dollar company and what is the uh what it takes to to do these kind of deals. What is a support system looks like and uh what kind of mentors uh and what kind of support system like what uh investment bankers like how you should really do that uh structure uh when you are doing these kind of big deals. Andrew, thanks for joining uh this podcast. It was really insightful. I have learned a lot personally and I'm sure the other founders uh who are doing M&A is going to be really it was interesting for them and I'm sure they have learned a lot. Thank you. Thank you for hosting me. Thank you. Great.
