How Acuant CEO Yossi Zekri grew Acuant to $50 revenue and 2K customers in 2022.

hello everyone my guest today is jose calvera he's a product manager with more than 25 years of building enterprise product experience for digital identities detecting preventing uh financial crime payment security network security and application security he's an entrepreneur at heart now building a trusted digital identity company at accuent.com jose you ready to take it to the top all righty all right identity space is super hot help me understand what do you guys do so we create software that allows companies to uh assess the risk of dealing with different identities online and on-premise and so are you selling mainly the large enterprises or is this a small business sort of play um all over actually we have tons of customers that are in the smb space but we have a our most obviously profitable comes from the enterprise when did you launch the business so icon has been in business for a long time over to 10 15 years we in along the line will acquire different businesses i actually came from an acquisition uh through a company called identity mind uh about a year and a half ago um so it's been a while i started in israel long time ago and uh a lot of experience in border security and uh uh very fine and validating documents from all now to all the way to online and how many on average what are these customers paying per month it sounds like you have a big range it's a big range so it depends on the product we have a very broad portfolio given all the different ways that you can do uh online verification of identities and and how you apply then that to say fraud prevention or financial crime crime prevention or anti-money laundering and so forth so it really depends um on on on the client and the services we have services that apply to very small companies and we have services that apply to very large companies right so when you look at 2020 total revenue what percent was pure sas versus uh services revenue oh it's uh mostly sas i would say you know somewhere around 60 70 percent is sas business and then 30 services yeah yeah more or less and on-premise on-premise solutions right oh i see okay great so there's on-prem play here now talk to me and so averages are dangerous but let me ask you a different question what's the most common price point folks are paying you again it really depends on the on the client and the service you know a small a small fintech for example could go from i don't know um ten to fifteen thousand dollars a year right yeah and a lot of enterprise could be multi-million dollars yep so okay it's really depends on the services so you don't but there's no suites i mean if you look at all your customers and then you count the number like the numbers there must be some sweet spot price point um tough to say again i think it really depends on the application it's a very broad portfolio and we don't have specifically i would say a much larger concentration on a particular vertical in a particular market um it's difficult to answer that question again because of of the size of the businesses i think perhaps a better way of thinking about it is how much it costs to validate an identity right and and i think that in general when you look at it from that perspective uh we probably are talking depending on the on the sort of the tolerance of risk of the use case we probably are talking about you know somewhere between a dollar per user to if you go all the way to transaction monitoring and so forth over time you're probably talking about two and a half dollars per user or three dollars depending on on the use case yeah a per per validation per validation yeah per user i would say i would say per user right um what's that i don't understand what's the difference between a validation and a user well so if you say that you're on boarding that you're signing up for your credit card right that is an important situation and that would be one transaction associated with it however over the life of that user in that bank if you are doing monitoring of that identity and behaviors over time then that would be the same user you're just just monitoring the behaviors of that user over time if you needed to right so the bank would be paying you something like two dollars for my account if they're monitoring me over time yeah that's that's about it right that's nice and that would include the cost of the boarding but also the cost of monitoring that user through transaction monitoring over time okay let's talk about growth of a business where are you getting customers today what are the main channels um so we are very so we have a a very large partner um revenue size right and and we're talking very large partners that take an oem our technology and then they sell it all over the world um and and that is a very substantial part of our business um in terms of how we sell through through partners then there is the direct channel um where we go directly to the customer and it depends there it depends on on what applications and what services we're selling um so in general for example if we're talking uh anti-money laundering transaction monitoring franchise we usually go direct um and but if we are selling our document verification and biometrics and um item detail identities concepts those are better solved through our channel through our larger partners in general right now not not in the specifics but yeah and so using these tactics how many customers are now serving today uh so sometimes it's hard because because we oem the technology so the our partners may have thousands of customers so the way we look at it we look at it in in in the amount of identities that we that we solve on a on a on a yearly basis and we're talking in the hundreds of millions of identities um that that we pass roughly probably somewhere between that that we count because there are either the right partners or the right customers you know somewhere between i don't know 700 maybe yeah and what'd you finish 2020 with in terms of total identity is verified you know uh distinct identities i i don't actually don't know the details but i if i were to guess we're talking into the billions by then at least right and is that so if a bank is monitoring me once per month that just still counts as one of the billion that you manage monitor correct correct and then this is worldwide right this is this is this is not just north america or europe or i mean so true or false there's only seven or eight billion people in the world if you're managing and verifying a billion of them i mean you have you know more than 10 coverage of the entire earth based off users being tracked it at any given point in time yes um there is the the so i guess i should say that if you are bank a and you do jose right in terms of authentication and then you go to back b and then you also authenticate jose that counts as two right it's just that on a per client basis so it's not quite a billion unique it would be more about there's some overlap obviously right because i do business with you know bank of america and wells fargo and whatever other fintechs in the world there are mm-hmm and you mentioned again the minimum was a sort of a dollar to validate identity you just had a billion last year i don't think you did a billion in revenue last year so where's my math wrong that's a good point it's actually a very good point it depends uh of of how you contract and obviously when you have and do a lot of volume the price for identity verification goes lower right and the price that we give sometimes to our partners is much lower than the part that the cost that we would go directly right because they are putting money on top of that right on on those so so so it you know a good point in say in saying that i think that that's about the cost of the market to do the type of to use the type of technology validation that we do for our customers now not as i said not all the for example transaction monitoring right it's a very different cost center than than what a user validation and verification is so so there is there is some checks and balances in terms of how you you know you you put down the monetization on a per identity basis yeah so let's go back and se instead of talking about per identity model let's go back and talk about 700 customers right if you you know 700 customers right at a minimum of sort of what you said arpu would be monthly rpu let's say it was 1500 or 2 000 per month i mean that puts you like you know 1.4 1.5 million per month in revenue is that more more in line with what you actually are um we were doing well um some of the numbers i can't disclose private companies i'm not allowed to disclose that um but but we're doing well that's not helpful it isn't but it's something i can't talk and details about uh talk to me about the team how many folks total uh about 180 okay and how many engineers uh about 80. okay okay so you are i mean this is a tech this is a hardcore tech product with that much teaming and engineering yes yes how many now do you guys employ a sales strategy that requires quota carrying reps or is it really the oem strategy it's both um and so so we do have sales with uh you know the carrier quota um and we have how many how many carry quota oh i would say about two-thirds even even the ones that work with partners two-thirds of what two-thirds of our sales force probably carry a quota yeah but i don't know what what your...