The Next Evolution of SaaS: Letting Customers Build Features
The SaaS CFO Podcast Recap
Published:
Duration: 20 min
Guests: Dana Rahman
Summary
Dana Rahman, CEO and co-founder of Legato, discusses the company's innovative approach to allowing non-technical users to build custom features within existing SaaS platforms. This episode explores how Legato's embedded AI-powered tool creates new revenue streams for vendors by enabling user-driven...
What Happened
Dana Rahman, CEO and co-founder of Legato, talks about her and her co-founder Shlomit's background as product and technology leaders in SaaS platforms. They witnessed how generic B2B platforms forced business users into costly customization projects, leading them to create Legato as a solution.
Legato offers an AI-powered app creation layer that allows business users to build applications, workflows, dashboards, and reports within existing SaaS platforms. This tool is designed for non-technical users, eliminating the need for engineering knowledge or professional services.
Rahman explains that Legato is embedded inside platforms, allowing users to enhance existing tools without leaving them. This approach targets non-technical users, enabling in-house CFOs to customize their tech stacks without relying on external developers.
Initially targeting B2B applications like ERPs, CRMs, and HR systems, Legato plans to expand to more traditional platforms over time. The company focuses on platforms with high customization requests, aiming to streamline these processes for business users.
Legato's business model involves selling their tool to vendors, who then offer it to users as a new revenue stream. This approach helps vendors in the AI race by winning over business users who can now build their own applications.
Founded in 2025, Legato has raised $7 million in seed funding. Rahman emphasizes the importance of having a clear narrative alongside traction when approaching investors, which helped them secure funding quickly.
The go-to-market strategy is currently founder-led, with Rahman and her co-founder leveraging their network and expertise to engage with platform leaders. The company's pricing model is usage-based, aligned with the revenue generated from user-created applications.
Key metrics for Legato include adoption rates and time to value, focusing on how quickly users can create meaningful applications without engineering support. Rahman mentions that maintaining and updating user-created applications further enhances platform stickiness, reducing customer churn.
Key Insights
- Legato enables non-technical users to create custom applications within existing SaaS platforms, targeting B2B applications like ERPs and CRMs. This eliminates the need for costly professional service projects.
- The company's business model involves selling their AI-powered tool to vendors, who then offer it as a revenue-generating feature to their users. This approach helps vendors differentiate in the competitive AI space.
- Legato's pricing is usage-based, allowing vendors to charge users for creating and using custom applications. This model aligns with the value generated by the tool, providing a clear revenue stream.
- Dana Rahman highlights the importance of a clear narrative in fundraising, noting that investors responded well to their vision of empowering business users and enhancing existing platforms. This clarity was crucial in securing $7 million in seed funding.