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Cognism is a London-based B2B sales intelligence company that provides contact data, pipeline enrichment, and sales intelligence tools to help businesses build and execute on pipeline. Founded in 2015 by James Isilay, who previously worked as a commodities trader before pivoting the company from a fintech concept into the sales intelligence market, Cognism has grown from zero to $71 million in annual recurring revenue.
The company raised a $87.5 million Series C in January 2022 led by Viking Global Investors and Blue Cloud Ventures, bringing its total funding to approximately $129 million across seven rounds at a valuation of $436 million. Investors include PeakSpan Capital and Bolderton Capital, both of which provide operating partner networks that Isilay credits as central to the company's scaling strategy.
Isilay, who presented at the SaaSOpen live event in March 2024, framed Cognism's growth as a mentorship-driven journey, describing how a structured support network of investors, CEO coaches, and board members helped the company navigate scaling crises from zero to over $70 million ARR without a major breakdown. Dominic Allon serves as CEO of Cognism.
Last updated
Cognism reported $71 million in annual recurring revenue as of the time of Isilay's March 2024 presentation at SaaSOpen, with a separate figure of $83 million ARR also cited for 2024. Isilay described the ARR trajectory as a smooth journey from zero, with the company passing the $50 million ARR threshold before the March 2024 interview.
Cognism reached a $436M valuation in 2022.
Cognism has raised $128.8M in total funding across 7 rounds, most recently a $87.5M $87.5M Series C, announced Jan 13 2022, led by Viking Global Investors and Blue Cloud Ventures round in 2022.
| Year | Round | Amount | Valuation | % Sold | Source |
|---|---|---|---|---|---|
| 2022 | Funding round | - | $436M | - |
CEO
James Isilay founded Cognism in 2015 after a career as a commodities trader in oil, German power, and carbon. He described himself as a software engineer by background who knew nothing about the B2B sales intelligence market when he started the company, a posture he credited with driving him to seek out mentors at every stage of growth. Dominic Allon serves as CEO of Cognism.
Isilay's early support network in 2016 consisted of two personal investors: a conservative investor named Declan Farley, who monitored spending closely, and an optimistic early backer named Usman, who provided the first check. By the time of the March 2024 presentation, his support network had expanded to include a wellness coach named Harold, a wealth advisor named Dario Arnold, CEO coach Katie Trust, chairman and mentor Peter Daffern, and the operating partner networks of PeakSpan and Bolderton.
In the twelve months preceding the March 2024 presentation, Isilay described turning over the majority of his C-suite, hiring a new CTO, CFO, CHRO, CLO, and CPO. He described the process as managed carefully to maintain morale, typically pairing departure announcements with the introduction of a successor. Net worth was not discussed in the interview.
| Question | Answer |
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| What's your age? | 44 |
| Favorite online tool? | - |
| Favorite book? | - |
| Favorite CEO? | - |
| Advice for 20 year old self | - |
Customer count and pricing details were not discussed in the interview. Cognism serves B2B companies seeking contact data and sales pipeline tools, but no specific customer figures, pricing tiers, or per-seat costs were stated by Isilay during the March 2024 presentation.
Cognism serves 6.4K customers.
Cognism operates as a B2B SaaS company in the sales intelligence category, generating recurring revenue through annual contracts with companies that use its contact data and pipeline enrichment tools. The company reports its revenue on an ARR basis, with $71 million ARR cited at the March 2024 SaaSOpen presentation and $83 million ARR also cited for 2024.
Profitability, gross margin, churn, retention, CAC, LTV, burn rate, and runway were not discussed in the interview. No per-customer revenue figures or monetization mechanics beyond the ARR figures were disclosed.
Cognism's team size was not stated precisely in the March 2024 interview. A figure of approximately 450 to 560 employees is associated with the company for 2026. Isilay noted that in the twelve months before the presentation he had focused almost entirely on hiring new C-suite executives, replacing the majority of his senior leadership team across the CTO, CFO, CHRO, CLO, and CPO roles.
Cognism employs approximately 500 people as of 2026, down from 559 in 2024, including 150 sales reps that carry a quota. It serves 6.4K customers that rely on its solutions.
Cognism generates $83M in revenue.
The CEO of Cognism is Dominic Allon.
Cognism raised $128.8M across 7 rounds.
Cognism has 500 employees.
Cognism is headquartered in London, United Kingdom.
Cognism operates across multiple industries. Browse revenue, funding, and growth data for Cognism in each sector below.
[00:00] Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, saasopen.com. But for now, let's jump into the recording. [00:19] >> The first two hires I ever made were terrible. Like, seventy two percent of founders report that the entrepreneurial journey affected their mental health. Yeah. We've gone from, yeah, zero, and now we're at 71, million AAR. [00:32] Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software [00:58] founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. [01:18] >> Hi, everybody. Yes. I I'm James Islay, founder and CEO of Cognism. So this talk is about how Cognism avoided scaling crisis from going 0 to 70,000,000 AER. When I was thinking about how to tackle that topic, there's many stages of the journey from zero to 70,000,000, and the one theme that came back to me again and again was about mentorship and my support network. And it really reflected on how did that support network grow from when [01:46] >> we were zero AER to 70,000,000 AER. And I think that's the biggest difference and that's the biggest thing that's made our journey smooth. So that was what I was going focus on. How many people here have a mentor? Could you just put your hand up if you have a mentor? Oh wow, not that many. How many people have a mentor of a company that's several stages ahead of them? So this is a really important talk. [02:09] >> So this is our AAR and as you can see it's been a fairly smooth journey. So yeah, we've gone from zero and now we're at 71,000,000 AAR. [02:22] >> Just so you know, Cognizant, we're in the B2B sales intelligence. So we help companies with contact data, filling the sales pipeline, enriching opportunities to help increase win rate. So we're really helping to build and help execute on pipeline. [02:41] >> One of the great things about me going into this industry is I knew nothing about this industry. Before Cognism, I was a trader, so I traded oil, German power, and carbon. I was in the finance industry. I started Cognizant to build the fintech, and then we pivoted into sales intelligence. And so one of the great things about this journey is I really didn't know anything about sales intelligence. So corny quote from Socrates, true knowledge exists in [03:03] >> knowing that you know nothing. And I really knew nothing about this industry, and that was very beneficial for the for the journey. And because I approached it from the perspective that I knew nothing, and I needed to keep finding mentors to help me to build my knowledge in the industry and know what to do in terms of building a company. So I really went out and seek knowledge and I really went out and tried to find [03:25] >> the mentors to help me get to the next stage. [03:30] >> This is really important. These are some really key stats. Seventy two percent of founders report that the entrepreneurial journey affected their mental health. Thirty seven report suffering from anxiety and thirty six percent from burnout. The average level of loneliness amongst CEO founders is reported to be seven point six out of ten. The entrepreneurial journey is really, really hard. I've seen founders burnout. I've seen people go through crises. Having a mentor and having a really good support [03:56] >> network is really key for those moments to get through to the other side. And for me, it's been really key to help with the continuous scaling. [04:04] >> Yeah. So the the and and again, like, to go back to these four pillars that you need to think about for yourselves when you're on this entrepreneurial journey. You know, family health, career, wealth, that, you know, they're they're all pillars of that you need in terms of your support network, and I'll show you where my support network's at right now. And, you know, if you don't have one of these pillars in the right place, then what [04:26] >> I've seen time and again with other founders is it just the chair breaks and it falls down because one of the legs falls down. So it's really important that you build a support network around all of these areas. [04:37] >> This was my support network in 2016. So two types of investors. I had a conservative investor, Declan Farley. Both of these two were friends at the time. Declan was like the conservative investor that would call me, WhatsApp me every single day, chasing me about every single penny that was spent. Like, he was a it was a bit miserable, like, again, he he kept me on my game. And and Usman was the optimistic investor. He said he'd [05:02] >> always be there for me, provided the first check-in, and then I never heard from him ever again. So combined, were the perfect investor, but that was like my support network in 2016 when I started on this journey. It gave me the confidence to move forward and it gave me the confidence to get going. This is my support network now. It's actually bigger than this and there's many legs to it. It's missing my fitness coach which I've [05:26] >> just added. Harold is my wellness coach, he makes sure that I'm in my good happy place in my mind. Dario Arnold is my wealth advisor. I got secondaries to stop me going crazy, spending tons of money and creating loads of stress from that. Katie Trust is my CEO coach. So she helped build our company values. She helps me whenever there's a crisis in my management team. She's the best adviser on how to resolve that crisis in [05:52] >> terms of personal relationships between c suite executives. She helps us with OKRs. And Peter Deafrin is my CEO mentor, and he's he's been at NetSuite when, you know, taking it to billions in revenue, Crystal Decisions in terms of, like, taking that to a formidable expert. He's been there many times before, he's been on the journey many times before. Any crisis I've ever seen, he's seen it before, and, you know, either he has the solution on how [06:17] >> to resolve it or he knows how not to resolve it. And then I have these investors, PeakSpan, Bolderton, they have dozens of experts in residence, dozens of operating partners. Like Bolden for instance has David Cullog, really famous CMO. [06:33] >> David Wiesman, the CPO of bookings.com. And they they're really those those networks really help me in terms of, in particular, who to hire, which of the c suite people that I need to hire next to keep the the scaling journey going. This was a really good guide that I found from I have to shout out to Santiago Morale, which really, I think really gives a good guide on the stages that you hit and what you need [07:04] >> to develop in terms of your own understanding and knowledge as a CEO. I hadn't touched many of these topics when I started my company and now these are the kind of it was a really good guide of what I've educated myself on as I've gone through my journey. So, like, the founder stage, digital value, infrastructure applications, team, product management, work management operations, team of teams, coordination and process, investments and projects, organization and culture. That one's been [07:33] >> super key for our scaling. And then enterprise, governance risk, security compliance, information management and architecture. That's what I'm really building knowledge around right now and where I'm really seeking out mentors to kind of help me with the scaling there. [07:48] >> This was another great guide. I felt that we had a talk earlier this morning about hitting these scaling crises. And this really resonated to me. And I think it resonated from talks I had this morning. So these these are kind of the typical, like, revenue points you get where you hit those scaling crisis, and that way you really need to make sure that you've got the mentors that are at the next stage. And some mentors, for [08:15] >> instance, when when Peter Dufferin became my mentor originally, I probably I I knew I knew I know now that I really took him to earlier stage because the advice that he gave me wasn't really resonating and didn't really have impact because I'd taken him a bit early. But right now, he's the perfect mentor. And and whenever a crisis comes up, because he's really played at this stage, like the 50,000,000 AER plus, his advice has been invaluable. [08:43] >> So yes. Oh, we lost some pictures there. So I wanted to go down to a particular stage and then just talk through these different stages and what mentors I had there and where they helped us. So if we go back to the sub 1,000,000 when we just started, I had three key mentors. One was Tom James and he was an angel investor who'd had an exit. The key bit of advice that he gave me at that [09:08] >> stage was to focus on my home market. So to not go into The US market. It was one of his big pieces of advice. One of our rivals raised a seed round, went into The US market, and blew the entire money and died. Whereas we stayed focused on The UK market, and his advice was stay focused on The UK market until you get to 10,000,000 and then and then and then look at The US market. And [09:31] >> that real that was invaluable advice and starts with blowing through our money too quickly. Mark Taylor, because I knew nothing about the the b to b [09:42] >> sales intelligence market, Mark Taylor had run a b to b outreach agency. So he really helped me to understand the market, understand what customers wanted. Helped both him and Tom James provided initial customers to kind of like test our services in. And and he also helped me to really build out a sales plan in in in terms of like how to grow the business. Nick Keating, what the first two hires I ever made were terrible, like [10:08] >> the the SDRs. They didn't work out at all. And I I really realized at that stage because I came from a software engineering background. I'm a software engineer by background. I knew how to hire software engineers, but I didn't know how to hire salespeople. I didn't know how to hire marketers, I didn't know how to hire customer success. You've got so many, like, departments and areas to to learn. You can't. It's not possible. So he really [10:32] >> came in and helped us to really us how to hire good salespeople and good customer success people. Like, one of the key lessons at this stage was that I needed to find people that knew how to hire those juniors. And and I needed them involved in the in the in the hiring process and I needed them to do the sign off for those employees. That was really critical for our success. Another key thing here that really [10:57] >> made a big difference was creating a board. I invest in a lot of startups now. And one of the key mistakes I see again and again is that founders want to fear creating a board. But it's not really a control thing. It's really a headspace thing. It's really about creating time with those mentors to kind of review where the business is now, review your metrics, review your financials, and get feedback, like a very well constructed feedback [11:26] >> that you can actually action and then and then put back into the company. That meeting, like regular board meetings and regular revenue operation meetings from our first year, were really key in our scaling. It really provided, when we did those on a monthly basis, like now the cadence for those moved to a quarterly basis because we have so much more data and we need to be so much more deliberate. But at that time, it really made [11:47] >> a big difference from zero to 50,000,000 AR for us to do that monthly and then to have that feedback from from those mentors to kind of ensure that we were adjusting the the boat in the right direction all the time. So, [12:02] >> yes. Next one is when we got to 1,000,000. Oh, we're missing a lot of pictures. But here here are the two pictures that were up here. We're Salesforce, and that was really about us investing in our infrastructure and investing in our technology. One of the other key mistakes I've seen across my investments and other founders that I've mentored is that people are cheap and they don't invest in their people, they don't invest in their technology. And [12:33] >> and I see that as one of the major issues of scaling. So I've always invested in the best tools, the best equipment for our sales teams. And that makes a has made a big difference. [12:45] >> So so yes. Scaling the the the infrastructure is is really key. And so the other one here was Salesforce and PeakSpan. So the other one at this stage, our first kind of VC vet investor came in, and they brought with them their support network. So they have an expert network. They have operating advisers, education resources, and just general support. So PeakSpan coming in as a VC with this infrastructure that they had. And and quite a lot [13:16] >> of their VCs don't have this type of infrastructure. So if you are gonna take VC investment and you are a first time founder, would really advise you to look at a VC like PeakSpan or Boulderton that has that kind of support infrastructure, has operating partners. So Peter Dufrin was one of their operating partners and he became my mentor and now he's our chairman. And so and and then PeakSpan also run regular sessions with key experts in [13:41] >> in the field on a on a monthly basis. They also provide all of my c suite with mentors and they pay for it. So that has been really good for my c suite to scale as well. So that was really important for us scaling. We got the picture here. [14:00] >> Katie Trust came in at over 10,000,000 AR. And Katie really helped us with building out company values. Culture is just so key for keeping a company together, for keeping and retaining talent in the later stages. So around about the 10,000,000 mark, we really got to we had an initial set of values, they weren't very good. Katie came in. We ran like a two day off-site. We built out the company values with all of the c suite [14:27] >> at the time. And and and it had huge it still it has it one of the largest impacts on across the org. And then she also helps us with okay OKR setting. As I said, she's she's a meant she's she's one of those people I bounce almost every kind of personal personnel issue off and and then get really good advice. So having somebody like that that can pick up the phone to or just WhatsApp is is [14:50] >> fantastic. So I would really recommend a CEO coach if you don't already have one. These are our company values. I I'm not gonna go through all of them. I go the the number one one is we are nice. Like, you go look at our Glassdoor reviews, that permeates across the company. And particularly, I I create the sales culture around that value of we are nice and fairness, and it really creates a different type of sales culture [15:15] >> to the to to the you'll see other companies. And it has really helped us with employee retention. So I think it's really helped the the and it's helped with attracting employees to the company as well. I get people on a regular basis emailing me saying that they heard about the company culture and they'd like to work for the company. [15:35] >> So from this as well, and one of the things that Katie really helps us with is the cadence of our communications. So we do town halls regularly. So we do a monthly town hall where we communicate our values. We celebrate three things together. We go through every single department and what the department's achieved so that the whole company feels included. And then she also ensures that we've got the right kind of communication cadences for the stage [16:02] >> of the company that we're at. So right now, of the things that's been important is just to slow down the communication. So that now we're moving to quarterly cadences on our town halls and quarterly cadences in our RevOps meetings because we just have too much data and doing it monthly is just overwhelming our C Suite executives. So it's been very important to kind of like time the communication for the right stage of the business. [16:29] >> So on the enterprise one, this is where Peter Bolderton came in. This is the recent one. So we've now scaled past 50,000,000 AR. Balderson has [16:41] >> an expert network and operating partners that are good for the 50,000,000 plus AR mark. Peak spam was really good from that kind of like 5,000,000 AR up to 50,000,000 in terms of the operating partners that they had. Boulderton has those operating partners that have scaled to the 300,000,000 billion AER plus and have all that experience. And and the the key thing that I'm learning at this stage is is really about making sure that you really hire [17:11] >> correctly in terms of the the title level and experience level. It's a very expensive mistake to hire the wrong people. It's also just having access to the right people or knowing which executive search firms to use to kind of find that right talent. So this is kind of really key now. So it's also about governance. It's about how board governance works. So that becomes a lot more complex. You have to get a lot more, you start [17:39] >> to see a lot more formal issues like legal issues and just as you approach, move towards that IPO level, your investors are expecting more from you in terms of formality. And so having to learn that from the right experts is really key. And this is their platform. I'm not going to go through all of this but they have a very big platform. So again, it's about picking the right investor at the right stage that can give [18:06] >> you that knowledge as a first time founder to scale. [18:11] >> This is my c suite team. Again, apologies for all the pictures missing. But over the last year in the last twelve months, my whole focus has been on hiring new c suites. So I hired a new CTO, a new CFO, a new CHRO, a new CLO, and a new CPO. And yeah, I think I've said them all. So I pretty much turned over about the majority of my c suite team and spent all of my time [18:38] >> focusing in on hiring those executives that have already done the journey before and have scaled from the you know, scaled to the hundreds of millions in in AR. And they've come in, and they've completely rebuilt their departments. And what I've seen works the execs that are really good have come in, found the really good key talent, but then brought in talent that they've worked with before to fill the gaps. And that's been a sign of a [19:02] >> really good executive. [19:06] >> So the key takeaways from this. [19:09] >> Know what you don't know is really key one. And seek out best in class mentors that have done the journey before. Nurture your support network. So again, like don't just focus in on the the mentorship just from from the company perspective. Also, mentorship. I would urge you in terms of like wellness coaches is just somebody you can speak to about the problems at the company aside from the kind of the strategic element, like the personal element [19:41] >> as well. Like the relationship between the relationships between you and your executives is super key. Like a wellness coach, like for mental space has been absolutely fantastic for me, game changing for me. And then also, yeah, of course, fitness. Because because, know, if I look at those CEOs that are top of their game, they also they they really do also give dedicate time to their personal fitness to make sure that they're they're they're they're that's good. [20:06] >> And again, drive cultural alignment. So it's the the company values piece, I can't stress enough how important it is throughout the whole of the journey for smoothness to to create like a really great culture. You you want your employees to come in and just and and want to work and and to be excited to work. And you know you've got culture right when people are coming to you for jobs. When they've heard that your culture is [20:31] >> so great that they're knocking on your door and they want to work for you. And I've seen that happen and it really lowers the customer employee acquisition cost. So it really lowers your hiring cost. So it it does pay back in spades. [20:47] >> Just to give a shout out, so if there are any, there was a new organization, when I was researching this, there was a new organization that was launched last year called the Founder Mental Health Pledge. So I think it's based out of Atlanta. And they are getting VCs and funds to sign up to make sure that they are providing their CEOs and founders that they invest in with all the right resources for their mental health to [21:11] >> help them with their, and their well-being. To help them ensure that they are fit, healthy, and looking after themselves. Which we often don't, right? As founders, we're usually all workaholics and we usually don't give ourselves any sort of head space for ourselves. But it's so important. Like Boulderton have a whole fitness program and they have [21:32] >> coaches across the board. So they and it's been fantastic to have that as part of their program. So twenty seconds left. I'm I'm amazed that I made it in time. But, yeah, thank you. Thank you, everybody. If anybody's got any questions, I'll be dancing. [21:49] >> Oh. When you fired your c suite, how did you convey that to your team to maintain morale? When when I [21:58] >> think that if you're gonna let one of the c suite go, it's kind of obvious to the rest of the c suite why the c suite person is gonna go. I think again, it's like if you can manage, I'm very good at managing relationships. So I haven't really had a bad, like it's always been done mutually and it's always been done in, I think you have to get good at managing that out because also it just [22:26] >> takes stress away from the organization. So so it's always been it's always been on good terms so far. And so so yeah. I think like that again, somebody like Casey has been very good at giving me the advice about how to make that nice and how to make that exit, like, kind of peaceful instead instead of, like, warlike. Outside of the c suite, though, like, your ICs, how was that, like, message and interpreting? Again, it's like [22:51] >> it's ideally, you're you're like, this person's leaving and here's the new better person that's gonna take over. Which is what I just did with the c p o. And then everybody got very, very excited about the change. Because also the organization felt like, okay, on the c p o, we needed to make an adjustment. We need to make an improvement. So again, it's it's about like, if you could convey some good news immediately after the bad [23:11] >> news, it softens the blow. And it and it makes it kind of a a lot more and it also can pump up the organization. So you can use it as a good thing to pump up the energy of the organization. K. K. Great. Alright. Thank you.
All figures on this page are taken directly from interviews or are estimates from public sources and proprietary models. Not financial advice. Read full disclaimer.
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Valuation
$436M
2024 Revenue
$83M
Customers
6.4K
Funding
$128.8M
Avg ACV
$13K
Team · 2026
500
Founded
2015
| Year | Milestone | Source |
|---|---|---|
| 2024 | Cognism Hit $83m revenue in December 2024 | Watch[1] |
| 2024 | Cognism Hit $83m revenue in January 2024 | tracxn.comWatch[1]Estimated |
| 2023 | Cognism Hit $64m revenue in October 2023 | |
| 2022 | Cognism Hit $38m revenue in November 2022 | |
| 2022 | Cognism Hit $25m revenue in January 2022 | |
| 2021 | Cognism Hit $19.2m revenue in November 2021 | |
| 2021 | Cognism Hit $19.2m revenue in October 2021 | |
| 2020 | Cognism Hit $16.1m revenue in August 2020 | |
| 2019 | Cognism Hit $7m revenue in September 2019 | |
| 2018 | Cognism Hit $2m revenue in September 2018 | |
| 2015 | Launched with $0 revenue |
Key ARR milestones shaped the company's strategic decisions. Isilay was advised to focus exclusively on the UK market until reaching $10 million ARR before considering US expansion, a decision he credited with preventing the kind of capital burn that ended a rival that entered the US market too early after its seed round. The company's monthly board and revenue operations meetings, which Isilay ran from the first year through the $50 million ARR mark, were cited as central to maintaining growth trajectory.
| 2022 | $87.5M Series C, announced Jan 13 2022, led by Viking Global Investors and Blue Cloud Ventures | $87.5M | - | - | cognism.comWatch[1] |
| 2021 | Series C | $10M | - | - |
| 2020 | Series B | $12M | $80M | 15% |
| 2019 | Series B | $10M | - | - |
| 2018 | Series A | $3.8M | - | - |
| 2018 | Seed Round | $2.7M | - | - |
| 2017 | Seed Round | $2.7M | - | - |
| Year | Milestone | Source |
|---|---|---|
| 2026 | Reached 500 employees (February 2026) | tracxn.comEstimated |
| 2024 | Reached 559 employees (October 2024) | |
| 2023 | Reached 481 employees (November 2023) | |
| 2023 | Reached 481 employees (September 2023) | |
| 2023 | Reached 414 employees (July 2023) | |
| 2023 | Reached 408 employees (January 2023) | |
| 2022 | Reached 273 employees (November 2022) | |
| 2022 | Reached 273 employees (January 2022) | |
| 2022 | Reached 367 employees (January 2022) | |
| 2021 | Reached 260 employees (November 2021) | |
| 2021 | Reached 260 employees (October 2021) | |
| 2021 | Reached 269 employees (August 2021) | |
| 2020 | Reached 189 employees (December 2020) | |
| 2020 | Reached 189 employees (November 2020) | |
| 2020 | Reached 179 employees (August 2020) | |
| 2020 | Reached 143 employees (June 2020) | |
| 2019 | Reached 128 employees (December 2019) | |
| 2018 | Reached 53 employees (December 2018) |
James the first interview hey we're I'm excited for this how many of you guys have have listened to the the podcast or been on the podcast raise your hand okay good do you feel better or worse after going on better okay this is a good sandwich so I thought a lot about um what I know you've done because I only want people teaching up here that I've actually done stuff I want them to say here's how we did it and here's the proof um you've bought companies you put the LOI up on the screen at the last event I think a lot of people in a distressed situation they might have competitors that are maybe in trouble they might be looking to buy events so before we get into that I just want to establish benchmarks and then jump into m a strategy for cognizantism and how you're thinking about product roadmap before we do that what's mrr today uh 52. 52 million a month 50 million okay that's up that's even up from back in September so what's Driven the growth how much that's what's 5 million more in AR we went um from a 2021 we went from 11 to 22. last year 22 East 44 and with this this year will end this month for um 52. wow so what's Driven the growth are you buying is it organic how are you doing it it's organic now I mean we bought a community which is a plg um like a focused business last year and so that when we looked at it was 1.5 million AR and now it's um like around about 5 million AR and talk about how you got that deal done so how did you find the deal and what did you pay for it so we found the deal because my sales team came to me and said we got this new capacitor um and they're coming up more and more um and then what I did is I reached out to the um CTO and the CEO to actually see you know to to engage with them um and because they were in France um we wanted we didn't have a great French data set so we wanted to um like improve our French data set and also they were they had a different model to us they were more like we're more positioned against Zoom info they were in more positions against Lucia there were more plg motion so I wanted to get a plg motion for you know because we weren't very skilled at that and our it team wasn't so I wanted to for us to get the skill set for that how many of you guys would you consider yourselves Bottoms Up plg low RP high volume raise your hand anyone else if you're under 100 rpu and you're sending more than 100 clients a month your your plg okay okay so most other people so top down then raise your hand if your average ACV is higher than 10 grand a year uh yeah yeah oh okay okay so most people are like what you are and not like what you went and acquired so you acquired the bottom-up motion so walk me through how you used your top down genes that you were good at to grow the plg business to from 1.5 to 5 million in AR over the past I guess it would have been 18 months I think it's just giving them the resources that they needed to grow grow more um so um using our marketing engine we have a really great marketing engine uh Alistair Coursey who's uh you know she so that skill set bringing that skill set to them so they got better at marketing um I think um right now that we kept the businesses separately so we've got the plg business and a separate brand we haven't brought it in under the same brand so we and we're really going after different countries and territories with it so right now we're keeping the businesses separate and we're keeping the motion separate and all I'm doing is giving them more resources so they can do plg better and more on scale so so um I mean I think that's the difference I mean there's the it teams are different the IIT teams are in Tunisia where we're paying I don't know where James have no idea where that is it where's the Indonesia Tunisia oh God I got it sorry I dropped out I missed the geography part of school Okay cool so different GEOS and yeah different skill sets so like when we do Revenue operation like we do a monthly rev-ops meeting where we look at how the revenue is it's a very different meeting for a plg company than it is for a sales level growth so what multiple did you pay 1.5 million ARR you paid what um when we actually ended up requiring them they were about uh 2.2 so we paid 20 at a time um 20 million all cash up yeah yeah no and the cash is released in stages when they hit certain targets so over a long period of time so so the the that's working out really really well they're highly motivated we give them a little bit of equity as well but um actually having those kind of Revenue goals to hit has has created Created incredible focus and also meant we haven't really paid out a lot of cash initially so we're paying out cash as they hit targets what percent of the 20 million was up front um around about I think I say around about 20 of it okay so okay uh a lot of people in here may have been approached by bigger companies that say we want to buy you we'd like to buy you for 10 million but we're going to do something amount of earn out and the second they hear you've got to hit these Revenue Milestones to earn their earn out they go I'm never going to see this money because you control a business aren't you a little disincentivized to see Casper I'm being I'm wearing the doubles yeah are you disincentivized to see it grow because you don't want to pay the extra 80 of the sale price I wouldn't look gross so no no not at all I want them to succeed and so and it's also just you you want to work with motivated um if you acquire a company you want to work with a motivated team you don't want to work with a demotivated team so I mean there's every incentive to be engaged with them and in every incentive to help them achieve those goals I I would the faster they achieve their goals the happier I am yeah but guys this is pretty impressive I mean if you actually negotiate if a company is doing you know 2.2 at acquisition price and you pay 10 or 20 of 20 million is upfront cash right that's what it uh that's four million dollars Scott you basically paid your risk upfront in terms of cash outlay was it like a 1.9 x yeah or something like that yeah yeah so yeah very very low risk now some other folk anyone else Scott have you bought any companies yet you're looking at it maybe thinking about it Rajesh is this built into your presentation tomorrow at all how you bought unboxed okay that would be great you paid all cash up front right 90 and that was 100 million dollar deal so it was 90 million up front interesting story there anyone else bought companies thinking about it okay let me let me ask you a different question um how are you now thinking over the next 12 months how are you thinking about M A in this sort of new world that we're in right now we're just finishing off a round so we got another round closing next Friday what's the amount um it's 50 million uh breaking news yeah Round of Applause although he's you know we hey stop how many dilution how much like crazy amount no um no no I mean it's it's um we're doing that on a 425 pre okay and you're raising 50. yeah okay um okay so okay a little more than 10 15 to 12 okay and you have to do like an ESOP pull on top of the round as well another five ten percent for employees yeah exactly interesting yeah we we're pretty good at getting Equity back to employees from investors that's great yeah um how much Equity if you want to go on the IPO track how much Equity would James personally like to own at IPO what would you be happy with I have the kind of Target of over 10 and are you on track to do that yeah yeah yeah okay cool uh that's this is great it was a lot of data in two seconds that was pretty good thank you for sharing that's okay all right so how okay so let me ask you this then um I imagine your ability to buy other companies when when you're buying other companies and saying I'm going to give you stock and cognizam you can now defend the valuation you want because you can say these investors just paid 450 pre we don't have yet we've never we never had like a crazy valuation I mean some of our competitors were raising like full tx's back in yeah late 2021. we kind of kept uh evaluation reasonable so I think you know the the good thing as well is that our employees have seen growth in that Equity right versus now a lot of um you know uh I suppose employees of those companies have their Equity deeply deep underwater so so we're in a good position and that we never really I had an overvalued round we didn't get those crazy valuations what was your last round valuation um it was like it was slightly below this round so we've got a slight up up around this which I think is quite unusual that the other companies I've invested in I've seen like 50 cuts to the variations from 2021 so we've got a slight increase which is good um but then I think right now this is kind of like the the low in terms of like historically right it's a little bit below market so like every city upside from here and that should help me with like new hires so for instance we just we just got in um the former kind of head of people from data dogs joined us so I'm able to get great hires now because we've got amazing growth yeah great growth we've got a really good Equity pool refreshed and um then people are getting that Equity at a really good value so it's going to help me with the getting that kind of like generation of talent in well guys if there's any bootstrapper that really wants to just get the article and whatever press you want and say you raise it a billion dollar evaluation and you just needed to hire the talents executive like I'll put a dollar I'll put in however much you want over a 9 000 year period it all hit in year 9000 you'll never see it but it'll be true and I'll write the press release and we can get you the Press so you can hire the talent without getting delusion right I think that there would be a service for that I think people would pay for that honestly uh but anyways James this is very exciting so how do you go from a 50 million dollar run rate today to a 100 million dollar run rate in 2025. I I think it's again it's like invest like last book investing in your people making sure that we just uh no come on okay is there a big competitor doing 30 million you know bucks in Revenue that you're going to use the 50 million just raise to go buy I mean um I think my we're mostly focused on organic growth right now like we we've you know we've been growing like over 100 per year most of that is organic um so right now we're focused on organic growth we want to be the best in like International contact data provide in the world and be really really focused on that not go multi-products be really good in our Niche and I think just from that and then and then getting our sales teams to be multi-threaded and sell to Enterprise like that's our biggest challenge it's like you know our sales teams were very good at um selling to like commercial segment s b mid-market and now we're starting to land these big seven figure deals and that's really about like getting those sales people what's the largest customer pay you today uh like a million so you have do you have a couple a million plus per year uh we have um um we've just landed our first million ones right round five million dollar customer that's a big deal yeah you can't hit 100 million dollars in Revenue without having a couple million dollar a year clients it's like a key thing you have to look at you need to have those it's getting our sales team to learn that they can do that and then it's getting them to to give them the tool set so they that they they can kind of get into those Enterprise accounts and they can multi-thread and get all this which is more important than ever now like it's harder than ever to kind of you know land those big deals which is really about um engaging all the right decision makers at the right time to get that deal over the line I mean I'm back in the day I mean I would myself if I looked at a customer and said it's a million dollars a year I couldn't say that with a straight face I mean with it I'd be like I would smile or something I wouldn't get a deal to just the Act of being able to ask a customer for a million bucks a year for the value of the platform as a stepping stone for any sales team so congrats on getting that it's very exciting um how much did Henry shuck offer to buy cognizant for he hasn't it he's busy he's been quite busy being a public company okay so Zoom hasn't made an offer yet would you sell I right now I'm I'm quite but I I really enjoying ruining this business I'm really enjoying growing it I love my exact team I love I love the whole company um so I'm actually having a lot of fun I I don't right now I want to take it to IPO I'd love to I'd love to become a unicorn UK doesn't have too many of them I think we've got about the last count was 42 I'm sure it's a lot less now um so I'd like to I'd like cognizant to become a unicorn and then and then I'd like to list it I think like that's the path I'm going on so much revenue I don't know what it's like in the UK how much revenue you have to have to have a good IPO in these I I well I I I think my investors are kind of like talking to 300 million AR right for us to go to IPO so the question is like um how much do you eat that organic how much do we do that in organic um but I think we've got a lot of optionality there in terms of um you know different paths to go to go down but right now we're focused on organic for the next couple of years get the company profitable um and then once we're profitable um then you know then look at our options speed up to the IPO is zong in here with qcc not yet okay I'll introduce you to them okay let's get we have two minutes left let's look at one or two questions Rajesh you got a question for James curious about anything yell it out top two challenges going forward in the next 12 months right now it's hiring uh we've got execs to fill in so I'm looking for a new CF bag um and then I've got another exec so it's um upgrading the exact the exact where those exactly kind of not scaled um and then I think um overall it's the economy of course right so I'm sure everybody's seeing win rates kind of drop and Deals getting harder to close so um for me it's really um upgrading the sales team so they get more multi-threaded and we can start to get more of those Enterprise deals then because I think that that is where we need the the issue right now on win rate specifically Enterprise is that there's more decision makers needed to close deals so you need to get more more multi-fredded you teach your teams how to do that I know that that is a skill set that isn't you know is is not in many books you can just pick up online so James Benson you take us home here you got a question for you got a question for James what are you curious about okay Scott contact any question how did you identify the actors no it was my sales team to repeat the question who how did you find the acquisition offered did Bankers bring it or somebody else no it was our sales teams complaining about competitor so and then knowing that we had a gap there in terms of an offering that we had in our case it was data and then and then just going after that that that you know building building a relationship right at the end of the day um you know that it's about founder to founder typically and you having a good vibe that's one of the things I've really learned about Acquisitions you don't want to do a deal with a Founder that you're not going to be friends with you won't don't want to have like a beer with um that's disastrous um so guys again it grown from 11 million to 22 million to 40 million to Now 52 million today did it through buying one of his competitors to get his plg motion bottom up going but he's really good obviously at top down as well we have breaking news not in the Press yet 50 million round at 450 pre closing as we speak which is very exciting and no email in his inbox from Henry shark offering to buy the company for a billion dollars he wants to take it public himself in the UK once he gets 300 million bucks in Revenue become his own unicorn James from cognizant give him a round of applause thanks thanks a lot appreciate it man thank you [Applause]
please help me welcome to the stage James it's away from cognizant my name is James Isley I'm the CEO and founder of a company called cognizim cognizant is a B2B sales intelligence provider we help companies find their next best customer and first I'd really like to fight Frank um Nathan um for inviting me to speak I met Nathan at a SAS stock in 2019 and we were part of a group a a event called SAS society and Nathan um hosted the uh the table and he gave me one of the things that I um things that Nathan gave me at that talk was a piece of advice about managing my board and he he urged me to like use my board and to actually drive value from my board before that my board had really been um just an access a reporting exercise a place where I reported my figures and after that advice I really made my board um helped to help really plug the gaps that we had in terms of expertise and one of those people was Phil garlic who's head of corporate development as Zoom info and um Phil garlic really helps us to do the transactions and to do the Acquisitions particularly Casper that's saved me at least a million dollars in fees from Bankers so and that should help pay for like his magazine for uh for a for a while so thank you Nathan for that advice it's small bits of advice that can really help accelerate your growth um and and so that's why these events are so key uh so this is the story of the revenue growth from cognizant um so as you can see we've had very um consistent Revenue growth right now actually we're all end of August we're at 37 million AER uh our Revenue growth has really been a mix of probably about 50 uh from marketing and 50 from our outbound sales team and I'll talk more about that um as we as we go through the talk so the next 20 minutes I'm gonna I'm gonna cover a lot of topics uh I'm gonna just cover really key points and and I think some of the key lessons from cognizant's growth Journey um first of all we're going to talk about the growth from zero to 30 million um the three kind of I think strengths of cognizant one is our hiring of international developers another one is our growth um how we kind of split marketing between capture demand strategies and creating demand strategies then I'm going to look at the m a wide umna I love doing m a um I personally yeah I don't use any Bankers we have the expertise on the board from Phil garlic who used to be a head of corporate development Zoom info and I personally Drive the transactions and I really enjoy that and then there's a there's a we've provided an asset which is our lesser of intent for Casper the template for that uh which which is on the one of the Assets in on the uh the the drive uh and then we just talk about why we did the m a in terms of how it improves our um go to market motion and also about the challenges of driving the m a transaction in terms of uh getting to the valuation and structuring the deal so first of all International developers so my I found my CTO on using upwork um so I'm actually a software developer well that's my background but I would say I was a pretty terrible coder and so I knew that the first Gap that I needed to plug was actually a good uh good head of development I I found my so my ctOS from Croatia uh we we hired most of our developers who are actually based in Croatia in Macedonia we've actually got the average cost of Engineers down to 32k and after the Casper acquisition what we found is that most of their developers were hired in Morocco and Tunisia now we're actually building a new office in um Tunisia where the actual average cost of the engineers is around 16k so one of the key things that I would you know ask people to look at is looking at International talent and hiring uh globally and for us that's that's really been um one of the the big advantages we've had one of the other key lessons is really to actually build offices in those locations so actually we have a office in Croatia in in zadar and we have an office in um Scopia in Macedonia and we're now building a new office in sfax in Tunisia um what that really helps to do is really build culture um and and really helps you to retain that Talent what we've found is that when we've actually had developers that have just work from home that they're not they're far less sticky so that's one of my key lessons and one of the I think the strengths of cognizance growth the next kind of one of the key things that I think we've done really right is around capture demand so so we have a fantastic marketing team Aleister corsi is our CMO I'd really urge you to follow her on LinkedIn that she provides some fantastic content and guidance um you know this is the the way that you know I suppose the world should be seen is that um the model that we have in our head is that about three percent of uh anybody in the market is really looking for Solutions at any one point of time and 97 are actually um not not buyers but need to be warmed up so the typical capture demand strategy is really you know SEO Google ads LinkedIn you're bidding on the keywords that that our users are looking for so for us it's B2B data and also bidding on uh competitive keywords our key lesson here was we tried to Outsource this I you know initially tried to Outsource today um before building a team and really didn't get much success you know using agencies and recently again we tried to Outsource this to try and get cost efficiencies and found that really that was a disaster and so really our key lesson here is really to build an in-house team and to really keep the talent and train the talent internally and to really pair that Talent with great mentors um from from companies that are scaling above you and that's really you know been The Key to Our Success here this is our organic traffic and this is really driven from our create demand strategies so uh currently we're about 260 K of value um of of um from our organic traffic that's about twice the value you know using you know tools like hrefs there's about twice the value of our nearest competitor and really hear what we've done um to really drive that and something we did differently this year is we hired a subject matter expert so Ryan uh Risa who who does this cold calling um we actually used him to build a community this this year and that's really works well for us and created like a really good set of differentiated content so again and one of the other things that we've done here is hire uh like content creator like content creators in in low-cost countries have a lot of marketing staff in South Africa which has been a great location for for hiring in terms of marketing um content and this has really helped us to create differentiated content and to to again like have double the traffic than our competitors uh our nearest competitor that's that's a little bit above above us in size um jumping into section two I'm just going to go through the the I'm gonna really dive into the acquisition uh why you know cognizant's uh growth and story and then caspers so Casper was a company that we acquired in France it was more people uh it was more going after um I would say like that individual user that's buying uh data on a credit card uh so also just look at that kind of whole you know why plg and and then um you know how that helps us expand our Market so again this is just cognizant's Revenue again cognizant is really more about a direct we have a direct sales team um so so we we really have um High sales touch points um we our average ACV is is you know from 15K and above um and you know we we we don't have a really any sort of a freemium version It's how we built the company you know we we we were VC funded and uh and and so you know that gave us the resources to kind of really at a very early stage build that sales team um Casper was actually a bootstrap company it's really plg driven so so you know they have a freemium version their average ACV starts at really 500 and goes up to two thousand dollars so it's a really a very different uh model to Cognizant this is the combined revenue um really the the the vision that I had when going after inquiring uh Casper was to kind of fix an issue that cognizant where when we were actually acquiring those kind of micro and SMB businesses at 15K packages we really had very poor retention of them and what we saw when we looked into Casper was for that same type of audience they had on annual contracts they had about 110 plus net retention whereas you know we were around about the 60 level so so really what it we showed was that that pricing and how they developed their products we hadn't really created the the best customer experience of the best customer Journey but by combining the two companies together we could create this this perfect customer experience where we could take customers that that um starting on a far smaller package that could self-serve and didn't need all the cell support and then move them along to the higher ACP ACV packages as um as as they grew so that was really the vision and what we wanted to build coming together and that should create like the perfect like highest most accelerated uh customer Journey um so this is what Alan to Allen's was the founder of Casper um and this was what he said about it Casper is a very good plg data provider but what we're lacking commercial power to address larger deals cognizant has one of the strongest sales forces in our industry and the combination of two will allow us to achieve great things with cognizant knowledge because cognizance knowledge and resources Casper can become one of the most powerful plg data providers in Europe and smash the competition I mean at the heart of any m a transaction or acquisition is really that narrative that story that you're trying to bind everybody together with and this was the narrative that that I built and I I took and talked to Alan about in the team which really was the common Vision that then helped the transaction go ahead and which was the The Vision that was shared with the board I think it's super important that right at the beginning of the transaction if you're leading that m a transaction that you have a narrative that you have a really well defined narrative about when these two organizations come together how are you then going to be a superpower uh so so this these are the the different skills that come together Casper was really a plg motion um they had created a far more simple product that was really aimed at those individuals that are putting and buying purchasing on a credit card cognizant is really an organization that um is telling people who are buying at the org level and so they have all level authority to buy and we're really having more features to actually sell at the to help benefit those org level buyers and because you've got far more sale touch points to be able to sell that org level solution you have to speak to more buyers of course the ACV has to be higher together we can create that kind of like perfected Journey where individuals can come in and initially start on their credit card and as they grow and expand then we can sell them the benefits of moving to an org level solution when they're ready for that that we're ready for that change this is how the transaction took place um and the kind of order and and why so back in September 2021 I was approached by one of my sales people that we had started to see Casper in our deals now I hadn't heard of Casper before and they just added a UK sales rep and so they started to appear in ideals um so I reached out on to um LinkedIn um it was basic as that and and managed to get hold of the CTO and then the CTO put me in touch with the CEO we had a quick Zoom call and then what I immediately did was fly over to Paris um with that Vision that I uh talked about um because at that time we really felt that we were missing that plg element we had tried to build it internally but but that hadn't worked out so so I really felt at that point we really needed to acquire that plg expertise and really have a part of our organization that was really good at plg and where we could concentrate that skill so I engaged with the cat with um Casper sold them that Vision then in November we um created the letter of intent so Phil garlic um who has that expertise so again we didn't need to use a bank which is great and I'd really um urge that um if you're doing M A it's like you can do this yourself you don't need a banker and you can save millions of dollars in fees um like it isn't that complicated to do that and I really feel that it's super important for you as a Founder to drive the transaction because it will help the success in terms of the relationships you build for the for the Post merger um the the for the Post merger um success for that to be successful and so um we did the letter of intent the letter of intent which again I've providing the resources is a really important step I mean that that that's really you negotiate that that's where you build you ground expectations uh and so it's a really key step to get that right and to get all the expectations set correctly between the company acquiring your own board and your own staff at the same time we did uh due diligence in uh technical Financial due diligence in January 2022 and kicked off the legal process and then the transaction completed in March 2022. so it was it was fairly quick I mean Casper is actually a fairly small organization it was 14 people again I threw a lot of personal time into it to make sure that it happened quickly um and also did lots of trips to Paris which was no bad thing and to make sure that that um that I built the relationships with the Casper team uh in terms of yeah so so the next section I'm just going to um have a quick look at the LOI um the the structure of the deal and and what we learned so in terms of the letter of intent um you can you know have a look at that that in on the desk and if you've got any questions like please connect to me afterwards and I'm happy to explain anything or go into anything in more depth um I mean one of the big lessons going through another m a transaction at the moment is at this stage is really to understand is the founder ready to sell like this is where you can really drag out a lot of the issues and and um really find out like who at the uh where the other company of the doubts and and then you've got as the drive of the transaction it's my job to to to kind of challenge those doubts and Tackle them in the letter of intent to get everybody comfortable with the transaction so um again this part of the process is really about building relationships and closing off doubts um and um another big another big area here is jurisdiction issues so Casper was a French company um there's a lot of uh negative noise about France as a country to do business in well so far we're having a very good experience um here we did have one problem around tax on the on Equity so so it was actually more um tax efficient to do a pure cash transaction and so that's ultimately how we structured the deal uh so the deal structure here so so of course the big debating point is valuation and we've just gone through a period in time where valuations have been Sky High and when actually we started this transaction you know there were deals being done in the VC community in our space where multiples were like like 40 times Revenue um so of course that wasn't going to fly with our board and so you know one of the um things that I really had to do was really um find that common ground on valuation between the founders and my board which is you know we're we're VC funded so I've got a lot of VCS to kind of debate valuation with that um one of the like methods and tactics that there that are used in terms of negotiation is really you know talk about valuation multiples um that are higher on the the current uh AR and then with the board talk about the multiple um at the close of the transaction so you can talk about a low multiple so so that was just one tactic so that I could actually um like meet everybody's expectation um it's just really about talking about the same thing at different periods of time um that would again help to find agreement um in terms of the way that we structured it um because we didn't do Equity um we we actually built an out structure so um so those are the cash payments at different milestones and that's worked really well as well um in terms of incentivizing just in the same way as Equity we did our the first time we actually did an acquisition we did an acquisition in 2020 with a company called meltastic that was most like majority Equity uh and and I haven't really seen any difference between doing it with Equity or doing it on this own out structure um and actually from from our perspective because we did this cash and not Equity it's really cheaper if you think about it from from our perspective as a fast Growth Company uh and actually the the the other party preferred cash um I think everybody always prefers cash um generally um so um and yeah and this the the overall that um structuring the deal with this um and communicating on the on the um the multiple in in different ways to the to the acquiring company into our board really helped to get everybody on board for the transaction um so so I guess to summarize and I've gone pretty quickly through that um the the what I've covered over there is really you know the keys to our growth is really for cognizant has really been um us um being International like hiring International developers like for us to grow faster in the future like I'm gonna find new locations again right now we're looking at North Africa because it's really untapped and there's great talent there um you know we've we've had a great we created an amazing um uh way of capturing of growing with this capture demand and creating demand strategies and splitting those out and really putting resources in both I mean that in terms of create demand really that's like a year uh payoff but again as you see now like we have double the number amount of organic traffic than our nearest competitor so again it's really paid off and the Investments really paid off um in terms of why do m a uh or inorganic growth is is um really beneficial it's really beneficial to plug the gaps that you might have in your own skills in your own team uh it really does also help to stop competition um and and um you know that that that's been a key for I think that's um Casper would have been a big problem overall if they've grown in the US market is independent um and of course adding product capabilities and in terms of the m a uh a book um hopefully you can all dive into that real uh letter of intent and that'll give you a great template um to to think about deals um if you have any questions on that please you know happy to answer them um you know it's it again we've now got this new go to market motion which which is fantastic right now we're using Casper to enter new markets so we're about to kick off Spain um so the aim is that for us going forward is that we'll go into new markets with a plg motion once we get a certain amount of traction then we'll set up the direct sales teams to sell deals at a higher ACV when we've got once we're in key accounts uh that you know that for me is extremely exciting and and it means we can grow at a faster Pace uh and in terms of valuation um again in terms of negotiating um yeah that's that's um you know the key there is really to um be able to like look at the expected to discuss the expectations of the company you're going to acquire and look at the expectations of the uh of your board and then find ways to discuss the evaluation in different ways to make everybody happy which is easy to do if you just use time as one it was one of those methods to um to to to set people's expectation in the right place so that's um Sophie thank you again for letting me present Nathan um and yeah um and if you have any questions please contact me connect to me on LinkedIn I'm happy to answer any anything in more depth [Applause] [Music]
Introduction hello everyone my guest today is james isilla he's the ceo and founder of cognizam a b2b sas company which was recently voted one of the top 25 startups in the uk by linkedin before founding cognizam james was employed as an algorithmic trader james has a a masters of engineering and information systems engineering from imperial college of london james ready to take a stop yes for sure thank you thanks for watching this show you bet algorithmic trading so did you get like super rich you know carving milliseconds off of trades b by installing hardware close to the stock exchange not quite i was a i was a swiss utility when i was doing the algorithmic trading um so so i was doing kind of a bit more slower stuff um but but it was it was good fun it was i finished i thought it was my dream career but um but then i realized that it wasn't you know it was sitting behind a desk all day long which i'm a bit more of a social person so it wasn't for me really so what is cognism so cognizant we help businesses find and engage new business in the in the b2b space so we're providing global contact data so mobiles direct dials b2b emails and and then the tools to engage that data to create new business so and we've also just recently acquired a business in germany called mailtastic which is a email signature marketing platform and that really ties back to getting those prospects engaged and to help increase uh conversions um when i hear about an acquisition like that and the space you're in what i really hear is the data play it allows you to make sure you have enriched in you know enriched contact data etc exactly yeah so so that's part of it you know part of when when when we're looking at acquisitions what we're also looking for are tools that help us to inform our data asset and to improve our data quality and that acquisition was done back i believe on may 11 of this year so fairly recently um how did you meet the founders tell me how the acquisition went down yeah but pretty much everything was done because it was covered and then we had all the country lockdowns as well so it was a really interesting time to uh to do a an acquisition we met them just before uh the country lockdowns had happened so we were able to travel and meet them once but then everything was done over zoom and so we did all of all of it over zoom and you know it's funny because in germany you know you have to actually go to the notary and actually have the whole contract spoken out even uh you meant to actually have a representative to sit there and listen to the entire contract spoken out but they made an exception because of covert and so we're able to do everything remotely that's incredible okay so that closed earlier this year um and give me a general sense how would you guys pay for mailtastic um in total uh you know i believe like in total it was around about uh four million i think it was about four million and how do you structure that i mean you you obviously have some scale but you're not like you don't have hundreds of millions to throw around was it an all stock deal all cash was there earned out how do you it was it was a mix of a mix of stock and a mix of cash okay got it and how do you as a startup founder sell the mailtastic founders on taking your stock instead of more cash you have to have to sell a vision to them get them to believe in your vision and we've had an incredibly fast growth rate so you know we we grew in in 2019 from like two to seven million um so you know we've got an amazing revenue engine i mean that that's the heart of our company really is is um you know an incredible inside sales engine and and great great uh marketing engine as well and and so we we could sell them the the fact that they would grow faster with us i think in europe in particular there's a lot of great product companies that have um you know don't have the capital to grow and have um but you know like generally weak um you know don't don't have the investment in the sales team um and also in their in their home markets it's usually a little bit tougher than say in the uk or us markets both both of which we have access to so just to be Monthly recurring revenue clear you finished 2019 with the run rate of 2 million and you've just recently passed a 7 million dollar run rate just we've just yeah that was at the end of 2019 we were 7 million and now we've just gone over um 10 million that's great okay so i got i got my math wrong then you finished 2018 with 2 million 2019 with 7 million and now you're about you're passing 10 million 830 grand a month yeah yeah yeah yeah so this month we did about um 750k of net new business so so we're kind of getting back yeah so we're getting back to kind of just pretty where we were pre-covered and we had a little bit of a hit um you know with the we're wearing that happened with um covered for one month but we've consistently grown and consistently hit our targets every month walk me through what happened in covet again 2018 you're 2 million 2019 you get 7 million run rate december that's you know call it eight nine ten months ago kova didn't sort of hit you've only added about two million over the past ten months what impact did covet have on that growth um so well i suppose yeah we were kind of three million right i guess the um what really happened a churn i guess like customers that we had that um were in the recruitment and the event space in particular got really heavily hurt um i think you know in particular in the uk now you know those types of you know we've had like a complete lock down um and then we've gone back just recently in the last couple of weeks into lockdown um so so you know those businesses are heavily here um so we i it's like when we had started in uh 2017 well you know we had a like a focus on s b businesses so of course s b businesses have been particularly we've been moving up um consistently you know away from the the smaller companies up um to you know larger employee companies but you know that was part of like a large part of our custom base and that part that custom bases being hit particularly hard as well um and a lot of that um it's kind of like a portion of that is coming back but you know the you know that that was the main hit and then it was also just the disruption of going from in office to work from home um and so we've made that transition now of actually being able to effectively manage a remote sales team but initially you know that was a bit of a shock to our system um of actually you know because we had a like a great office culture and you know great great team in office yep no it's tough thing to balance obviously the nice thing is you're still getting growth and yeah to your point caught two and a half three million a new ar over the past call it 10 or so months um you've raised capital obviously along the way tell us about Raised that so yeah we've raised in total about 23 million and from a mix of european and u.s investors um so we've still got a very healthy cash balance from that um but yeah um you know it initially we um had uh investors from mainland europe um from from um switzerland and from um actually from the balkans um like a fund from um uh that um like the balkan fund and then we got funded by uh uk investors angel investors and then uh more recently from a big uh us vc called peak span and and then from axa investment partners which are also european based so break that down for me you did 10 million with peak span in july of 2019 is that right yeah yeah and then 12 million from axa just just in march this year yeah and that was a mix of like primary and secondaries yeah tell me some folks don't understand what secondary means how's that work um so basically it's employee existing employees or existing investors selling their shares um you know for us a small discount to um to to an investor so the it's a great way to get liquidity and it's becoming a bit more common so if you want liquidity an earlier stage you know that's that's actually becoming an option now where was it you know from my understanding it wasn't much of an option even just a few years ago but now it's it's you know funds are getting more um used to offering it and and why why would folks on your team do that if they know your financial since you're growing so fast especially considering the tax consequences of cashing out a portion of their shares yeah i mean speaking to some of my angel investors the angel investors especially from the uk um a lot of their angel investments have just died and so actually getting any sort of money out investment is great you know um so they're very static just to actually see any sort of return from us from a seed stage investment um i i think you know just generally you know all everybody in the team is is pretty much a first time in startups like none of us are experienced um entrepreneurs um and so just getting some liquidity to to get a lifestyle balance um you know was was it was a great opportunity to you know um i was like get cash it kind of get a bit of a cash and uh and buy some of the things that you wanted in life right yeah about what portion of the 12 might end up going to secondary uh totally it was about five million oh okay okay it's not not was that 30 40 40 something like that yeah yeah yeah okay not bad and the rest of that obviously just sort of infusing the company you mentioned healthy cash balance today buy yourself some runway during covert obviously is probably a main priority help us understand what team looks like today how many folks uh in total we're 179 people so it's a very large number but we have a lot of people in the balkans um so you know we have like a large data research team in macedonia and all our engineers are in croatia um in a place called zidar and summer and zagreb and then our sales and marketing team are in the uk and then we've got a small office in new york and one person in vancouver what does that what's the total monthly expense for just the team in macedonia just being an idea um oh uh in terms of expense i mean i would say it's not i mean typically um like we're paying about um you know 500 euros per person there into like on an average for you know so that's kind of the average price i'd have to exactly yeah per month yeah it's very i mean when we when i looked at it it was cheaper than having higher say in india and you know they speak they're on the same time zone uh like everybody's fluent in english um so you know it's it's a very cost effective location and part of like our you know like i said one of our first backers was a firm called sc ventures benches self-central ventures um who are um you know from that region and you know part of it is creating jobs in in that region and so it was a really great fit for us to get take funding from them and then also to build a base there so you know like it was a double bonus really and so how many people are now are on the team there uh i believe it's a like in both regions it's about 60. okay about 60. okay great great and now to help me understand this so there's a crunchbase says you guys have raised 50 million that's obviously not accurate or missing something yeah i asked that to be corrected yeah there's like a double count there i think i'm like they've got the series be counted like 20 times um got it because then i was gonna give you i was gonna say you've only built a nine million dollar company and you raised like 60 mil 6x that that's not really capital efficient but you're much more capital efficient than what that shows yeah yeah yeah so i i asked for that to be corrected but it hasn't i'll chase them no worries we got there we got the right story here now that's all that matters so 60 people uh in those locations 179 on the team total and so how many engineers would you consider on the team uh we have like 15 coders and we have 24 with devops which includes qa as well like 24 with devops and qa okay and how many folks on our team carry a quota um uh i would so i would say like carry a quick carrying quota um i would say that's around about um 12 right now and james should i dig deeper here at the top of the show you said one of the things you feel like you're very good at is your is your sort of revenue motion i mean should i dig deeper on how you built the sales team sure yeah so how'd you so how did you build it right so let's just start with like a number and then work backwards right what do you set quota at relative to their full on target earnings base plus commission um so oh so in terms of the the actual quote i mean um right now uh our uh like so in terms of the actual bdms or we i guess you call account executives um they have like a minimum target of around about eight thousand uh dollars of um quota that they're meant to be bringing in per month and so that that's and then in terms of commission we're just about to change our commission model right now it's it's you know i've been told it's very generous um and and we we kind of set targets we you know we've we've been setting targets so that you know generally like almost all of our reps always hit that hit their target so we're quite generous on the targets and we're getting getting a little bit tougher uh now in terms of targets so um yeah but it's around it's 8 000 minimum that they need to hit so like last month how many reps hit hit your quota uh all of them hit quite so okay so you have so that's obviously not good you want something you want to set up sofa yeah so and then you said your commission's generous i mean some usually hear something like 30 percent or something like that what is your commission at right now okay people are not that generous ten percent of monthly or annual uh i've i've monthly yeah got it so if a quote is hitting their 8 000 in new mrr target every month they're basically adding 800 of a month to their to their comp basically 10 percent of 8k uh yeah yeah but the yeah yeah yeah exactly yeah okay got it what we're going to say since they were say something else there no no no yeah okay got it so commission's ten percent how long here's a big question how long do you pay that commission is it every month for 12 months or 24 months or what yeah it's every month for 12 for 12 months okay so if a customer stays longer than 12 months your margin automatically increases because you don't have to pay commission anymore exactly yeah interesting how long are customers staying um i mean uh generally um like yeah in terms of uh the total time that they're staying um i mean yeah um that would be uh i i say like in general it's around about 14 months um i mean but we have customers that are staying a lot longer a lot longer than that uh maybe a better question is like what's your monthly revenue churn um um so our net retention um our net retention is around 85 percent right now and it's moving towards it ninety percent well james that's really poor that's a very poor net retention metric why is that so low um i mean it's i think it's quite typical in our industry i mean because in the in the like for meltastic for instance our net retention ratio is you know um over and 110 percent well that's great yeah um but for the for in prospecting tools you know for like i said in the data business um like a net retention rate of around 85 percent is you know to my understanding from the history of industry quite common and so we have a very fast sales cycle and you know also we have a returning like a lot of those customers will like customers that churn out will come back um so you know they they treat the services almost transactional and so then come they they return so it's it's um you know as far as you know my understanding and knowledge of the industry is quite a common that's like a common kind of um well i mean we just saw zoom info go public right they're obviously much larger more mature etc they've been around for you know much longer and you know they're like 120 in terms of net revenue retention right so you would put them in your space right yeah i would put them in a space i think that that figure really applies to more than enterprise uh clients and if you actually look at their smb net retention or their mid market then then i think it's it's more towards our figure yeah yeah yeah i mean according to the s1 you know they basically brought it broke it down by three cohorts um they also broke it down though by just as a on a revenue basis across the entire business and it came out to call it like 110 120 but look you'll get there i mean that's why you go do an acquisition like mailtastic you'll do more of this and it'll become stickier and stickier over time um how many part of that is we started in that smb space right and and um and then we've moved up towards um you know moving towards enterprise right now so that that's part of the story how many customers are you currently serving Currently serving 1000 customers um in total over a thousand if you include the meltastic clients okay got it so i mean so so what are they paying on average per month then um in total um like our acv right now is about 14 000 uh per year got it got it so that means our poo is calling like you know a thousand eleven hundred range something like that yeah interesting um okay got it and do you think you i mean do you think you'll break a ten million dollar run right by the end of the year you got three more months oh no we're so we've already we've already gone over 10 million so we're over 10 million now and and and we should finish this year at 11.5 and then next year you know i'm i'm certain with the kind of metrics that we've got that we'll get we'll be at 20 at the end of next year interesting um that kind of confidence to me goes oh he he's putting a deck together he's about to go raise more capital well yeah we we i mean we always have like a deck ready um but you know i'm just quite solid on our metrics and then the other thing is that we're aiming to increase our atv you know it was at like 11k now it's at 14k and you know the aim is to get it towards the 28k um and we're releasing like you know uh we you know we know what we need to do in terms of product strategy to get there yeah that makes a lot of sense and um how much are you burning per month right now um actually only right now at the moment it's only about 200k uh per month that we're burning right yeah that's that's net burn yeah that's not that's actually not that that's not that bad so i mean you're that money that you raised i mean you've got you know call it 10 million basically well 5 million of the 12 was secondary so you've got what six or seven still sitting in the bank yeah yeah yeah yeah yeah exactly exactly interesting so and so we're doing um you know i think covered actually helped us get way more efficient so we didn't need an office anymore like um you know it slowed our kind of head count growth um so there was a lot of positive effects i say from from covert and just making us more efficient in terms of how we worked um so and you know we really have an engine now where we can just put more money into head count in terms of sdrs or into marketing and then get more growth and so it's just really a question of like you know how much we want to put the foot down on the pedal at the moment yeah i won't push you harder than this sort of high level question because it's obviously a sense of information but when you did do the 12 million dollar round did you guys break 100 million dollar evaluation or do you think that'll be your next round um oh yeah i think that'll be our next our next round got it so if you hadn't been flirting with it though you guys have been pretty close on the 12 million a fairly close yeah yeah yeah very good all right james let's wrap up here with the famous five number one favorite business book um the hard thing about hard things by ben horowitz number two is there a ceo you're following or studying yeah of course uh henry schuck from um zoom info uh of course um i just i like they have an incredible revenue machine and also just their path to ipo through organic and inorganic growth is uh you know something to be studied it's a heck of a it's a heck of a story in the use of debt when you look at the zoom info acquisition and how they pulled that off it was incredible number three what uh what's your favorite online tool for building your company besides your own i said gong i like gong um i also slack actually gong and slack number uh four how many hours of sleep you get every night about six okay in situation james married single kids uh you're married uh two two girls 13 11 and one boy three years old oh wow and how are you i'm 42 42. take us home last question what do you wish your 20 year old self knew oh new um i i would say actually um like doing a startup you know like actually uh taking more risk um away from you know i suppose like when i graduated it was the the path was to go into investment banking which is what i did and then i became a you know developer trader um you know i think if i um would have i would have taken more risk and actually jumped into startup world earlier um because i just love it it's it's like it's just so much fun guys cognizam.com a great prospecting tool they've just passed 10 million in annual recurring revenue will finish this year with 11.5 million with eyes on 21 million in 2021 they're serving over a thousand customers they raised 23 million bucks to do it their last round of 12 million bucks 5 million of that was secondary but the rest basically still being the bit still sitting in the bank because they're just burning call it 200 000 per month right now maybe do another round in 2021 we'll see what happens team of 179 people big data team in macedonia and another team in croatia of developers 24 engineers total 12 quota carrying sales reps about to change the commission structure to get a little more aggressive there eight thousand dollars a new mrr per month is quota for those aes as james continues to scale the company james thanks for taking us to the top thank you one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to 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