AIRO CAC Scenario Analysis

Methodology: Rather than estimating which specific deals will close, the total quantified pipeline value is multiplied by a blanket conversion rate. This treats the pipeline as a portfolio and provides a more accurate reflection of sales and marketing efficiency.

Closed net ARR = Total net pipeline ARR x conversion %
Expected customers = Total quantified deals x conversion %
CAC = £75k S&M spend / (expected customers + 2 already won)

Account	Channel	Gross ARR	Net ARR (post-commission)
Big Mamma Group	Direct	£71,000	£71,000
Houses of Parliament	Direct	£164,000	£164,000
ParkDean Resorts (incl. expansion)	Direct	£185,167	£185,167
Battersea Power Station	Direct	£42,000	£42,000
Flat Iron Steak House	Direct	£40,000	£40,000
Atis	Direct	£30,000	£30,000
Estelle Manor	Direct	£14,275	£14,275
Celeste Notting Hill	Direct	£5,353	£5,353
Hyderabad Wala	Direct	£2,880	£2,880
Mollies Hotel	Direct	£2,295	£2,295
Dishoom Canary Wharf	Direct	£1,200	£1,200
Direct subtotal (11 deals)	£558,170	£558,170
M&B (via Quintex)	Partner	£3,200,000	£2,400,000
KFC (via Purified Air)	Partner	£1,920,000	£1,440,000
Spanish Restaurant (via Quintex)	Partner	£209,940	£157,455
RoadChef (via IAQ)	Partner	£53,532	£40,149
Treehouse Hotels (via Purified Air)	Partner	£5,039	£3,779
Partner subtotal (5 deals, net of 25%)	£5,388,511	£4,041,383
Total pipeline (16 deals)	£5,946,681	£4,599,553

Conservative

20%

3.2 of 16 pipeline deals convert

New customers3.2

Total paying (+ 2 won)5.2

CAC / customer£14,423

Closed net ARR£928k

S&M as % of ARR8.1%

3-yr LTV/CAC37.1x

CAC payback1.0 mo

Well above the 3x SaaS benchmark even in the worst case

Base case

50%

8 of 16 pipeline deals convert

New customers8

Total paying (+ 2 won)10

CAC / customer£7,500

Closed net ARR£2.31m

S&M as % of ARR3.2%

3-yr LTV/CAC92.3x

CAC payback0.4 mo

S&M efficiency enters best-in-class SaaS territory

Optimistic

75%

12 of 16 pipeline deals convert

New customers12

Total paying (+ 2 won)14

CAC / customer£5,357

Closed net ARR£3.46m

S&M as % of ARR2.2%

3-yr LTV/CAC138.3x

CAC payback0.3 mo

14 unquantified leads offer further upside beyond this

Monthly per sensor

£33.99

Pro subscription tier

Annual discount

15%

Applied on annual billing

ARPU (annual)

£407.88

£33.99 x 12 months

ARPU is fixed at £407.88 per sensor per year across all scenarios. Total ARR for any deal is simply ARPU x number of sensors deployed. For partner-sourced deals, 25% of this revenue is paid as commission, giving a net ARPU of £305.91 per sensor on the partner channel. The ARPU range across the two channels is therefore £306 to £408, depending on acquisition route.

KFC and M&B dominate the blended numbers. The direct-only view uses only the 11 direct deals (£558k net pipeline) to demonstrate the repeatable engine without partner concentration.

20% direct

Customers: 4.2 | ARR: £120k

£17,857 CAC

LTV/CAC: 4.8x | Payback: 7.5 mo

50% direct

Customers: 7.5 | ARR: £287k

£10,000 CAC

LTV/CAC: 11.5x | Payback: 3 mo

75% direct

Customers: 10.3 | ARR: £427k

£7,317 CAC

LTV/CAC: 17.1x | Payback: 2 mo

Revenue model

All contract values are based on a per-sensor monthly cost of £33.99 on the Pro subscription tier, with a 15% annual payment discount applied. ARR for each deal is calculated as:

Sensors x £33.99/mo x 12 = Annual contract value

Sensor counts are derived from site surveys, scope-of-works, or customer estimates during discovery. Where expansion potential exists (e.g. multi-site rollout), only confirmed or near-confirmed sensor counts are used in the model.

CAC calculation

Total sales and marketing spend for the 6-month period is £75k (£150k annual salary divided by two). This is divided by the number of expected paying customers at each conversion rate:

CAC = £75k / (16 deals x conv. % + 2 already won)

S&M spend includes all sales headcount costs, marketing activity, tooling, and travel. Hardware, sensor, and installation costs are excluded. The two already-won customers are added as baseline across all scenarios as their acquisition cost is already absorbed.

LTV/CAC ratio

LTV (Lifetime Value) uses a 3-year customer lifespan assumption, which is conservative for IoT monitoring contracts that become embedded in compliance workflows (TR19, fire safety). The formula:

LTV/CAC = (Avg net ARR x 3 years) / CAC per customer

CAC payback period = CAC / average monthly net revenue per customer. A sub-12-month payback is considered strong for SaaS; sub-6-month is exceptional. The industry benchmark for a healthy LTV/CAC ratio is 3x or above.

Pipeline composition

The pipeline includes 16 quantified deals across two channels:

Direct (11 deals): £558k gross ARR, no commission applied. Includes Big Mamma Group (175 sensors, 34-site EU expansion opportunity), Houses of Parliament (370 sensors, high-profile reference account), ParkDean Resorts (near board decision on 10-site rollout), Battersea Power Station, Flat Iron, Atis, and others.

Partner (5 deals): £5.39m gross, £4.04m net after 25% commission. Partners include Purified Air (KFC, Treehouse Hotels), Quintex (Mitchells & Butlers, Spanish Restaurant), and IAQ (RoadChef). Partner-sourced deals account for approximately 60% of active pipeline by volume.

Summary: Even at a conservative 20% pipeline conversion, the blended CAC is £14,423 with a 37.1x LTV/CAC and 1-month payback. The direct-only view at 50% delivers an 11.5x LTV/CAC with a 3-month payback, well above the 3x SaaS benchmark. Blended ARPU ranges from £178k to £247k depending on conversion rate, while the direct-only ARPU of £38k at the 50% base case reflects the typical deal size without partner whale accounts. All figures exclude approximately 14 additional unquantified leads which represent further upside not captured in this analysis.

CAC scenario analysis