Agendrix Revenue, Valuation & Funding (2024)

hey folks my guest today is sebastian charlotte he's a cro and partner at egendrix a workforce management sas based in sherbrooke canada where he oversees the finance and cs teams with a customer base of over 40 4150 customers he holds an mba in cpa and joined his childhood friends in the company back in 2016. sebastian you ready to take us to the top yes thanks for having me all right why were you late to the party how many how many months or years or weeks were your friends coding this before you joined approximately a year year and a half maybe um my friends basically had a web uh service company where they would develop apps for for customers and the initial founder of agendrix was one so it was a service company before and they eventually merged with agendrix and following that and the first revenues i jumped in quit my job and joined them when did um what year did the company launch uh official years 2015 2015 and did the agency shut down or is the agency still going today no they shut it down and they moved all the employees with a big total of five people uh with the new product uh agendex do you remember how much revenue the agency did the year before they shut it down uh i believe like half a million dollars okay so not hard to shut down yeah so small but yeah it was their first year into their credit yep shut down and move to sas interesting um and how were you friends with him did you work with him at the agency or high school or what uh elementary school in high school so the cmo was my high school friend and uh ceo today but who was back then one of our developers was in elementary school since i was like i think five years old well this is relevant you know a lot of people listening right now have a company they launched then one of their friends joins like a year later and they're not sure how to do equity right because they're a year late so without like you know share what you can but like how much equity do you own how do you think about that yeah right now i own about say rounded ten percent of the company um we are five partners and then the other half is uh basically financial institutions who jumped with us to buy back the president you know the initial founder of agendrix who was older and who retired last year in 2021 and so they helped us buy him back but back then the company when i joined uh i had more like salary than the company had revenues and so the valuation was just off the roof uh i think it was like a hundred times mr or something like that whatever the number was what and so what was the actual evaluation what year uh that was in 2016 when i joined and i think the valuation was perhaps three million dollars almost and the company was doing thirty thousand dollars ar so you see where i'm going so i didn't get a lot of shares yeah yeah with the buyback we had a split equity and a debt deal which allowed us to buy back some shares and just sell some to uh to to the banks but there was no growth capital inflow it was just like to buy back the shares mm-hmm so this is something that uh back in 2016 valuation was about 3 million when you guys are doing 30 000 a month in revenue yeah interesting okay and so and so how much did you need to raise like what was the raise to go buy out the older guy uh i cannot disclose the numbers to this day in 2021 but um let's say it wasn't that far above that number um it was oh actually that's that's a that's a public number but in total we raised about three million dollars to buy everything back wait so you raised three million out of 3 million valuations so you sold 50 of the business to new investors yeah sorry so the split today is about yeah and this is going this is getting messy so back in 2016 we didn't have financial institutions it was almost only the five young guys if you want plus andre was the founder oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're gonna see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're gonna do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you wanna check this tool out if you wanna jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview now fast forward in 2021 when he wants to retire um financial institutions came in and basically bought directly half his shares and lend us uh gave us like a um a loan to buy back his own shares and just buy them back in you know cancel the shares but this was last year that was last year oh i see and so then the valuation was three million uh four years prior five years prior back in 2016. exactly i see i see okay very cool let's talk more about the product it's a very cool product tell me who's buying it and how are they using it yeah so we're a b2b mainly company um or workforce software so we basically sell to retail companies restaurants um a lot in the care system right now security companies um elderly residences all that kind of stuff that we want to manage their workforce the schedules the time attendance um communications and we're going and moving into hr as well for onboarding uh kudos we write rewriting and that kind of stuff and how much do these customers pay on average per month to use the technology uh so in usd right now our acv is eleven hundred dollars uh so if you divide that by twelve it would give you roughly ninety ninety two dollars that was december but uh yeah yeah no you're good and then in your bio you said 4150 paying customers right yeah okay so that puts your mrr about 381 000 a month pretty much in usd yes this is going this has just increased because we had a price increase in january 2022 inflation you know but yeah roughly i'll ask more about the price increase in a second because that's a big move in your cro so i think you're probably the right guy to ask that question um but talk to me about growth rate if you're doing 381 000 today what were you doing exactly a year ago uh roughly 2 million and 65 okay so 2.65 million sorry so that's about 46 uh year-over-year growth in ar yep yep so divide that by 12 right so you're doing about 220 000 a month a year ago correct 381 yeah got it okay um and what's driving like where are you getting new customers from what's driving the growth um so geographically speaking geographically speaking uh canada quebec to the french part and our second largest market is the european um in europe but it's the french speaking parts so france belgium and switzerland we voluntarily decided to focus on french markets uh they were a bit less crowded than the us or english-speaking markets because of our largest world competitors and there are some [Music] some work laws and labor laws which are very specific to different regions especially the french speak speaking ones where we uh we have less competitors and and grow better and then in terms of funding history is it have you just raised the the round you did last year to buy out the early founder and um and put up operating capital business already have rounds before that we did actually only one round and was in 2016 when i joined the company we raised about in usd it was 350 000 back in september 2016. that's the only time we actually raised growth capital if you'd like in 2021 it was strictly to buy back shares and the rest was uh actually a loan so it didn't and no money came into the company how much how much uh or how big was the loan or is that not public uh well yeah it is 2.1 million okay so so it was half an hour 2. 2.1 was loan 2.1 was equity equity pretty much and sorry why did none of it go to the bit so all of that went out of the company to buy andre out yeah it's really it's really tricky so yeah so the financial institutions basically bought half the shares andreiad yep and then for the other half they basically lent money to the company but it was only for a second signing a paper and that money then went to andre that would allow us the company the five guys to buy back the shares buys and then cancel them so there would be less share remaining afterwards so your equity proportion increases pro rata i see it's like the opposite it's like the opposite of a stock option pool um exactly yeah it's a public the inverse inverse of that inverse of dilution yeah yeah yeah interesting so are you still making debt payments back off that or the investors cancel the debt as well they did not cancel it so that's okay so we're paying interest on that we have very good lenders uh we have a a pretty good package for uh for this and it's pretty good for the lender um so the canadian institutions the first one is bdc development bank of canada uh governmental and the second one is uh desjardins which is one of the largest credit unions in the country they also have operations in the states was it what pretty clean terms you know no warrants no origination fees no financial covenants or or does it have a lot about backfilled terms almost nothing they're they're amongst the the soft ones i'm not sure yeah yep yep um so it's fair to say interest rate is under five or six percent no uh more more low double digit it's pretty high i'd say around 10 variable but it goes with the advantage we had in increasing our percentage in the business that's market it's market you know super clean terms these days you're going to see anywhere between 10 and 20 interest rates uh if you get a lot of backfilled terms of covenants maybe you get down to four percent five percent it sounds like you guys did the four more you got it and but we're at the very least we're in the very very low end of that bracket yep yep yep and how long do you have to pay it back is it a two-year term four-year term actually it's five years with no interest okay uh well no sorry five years with no capital and then in five years we have to renegotiate we'll see then it's it's what do you mean no capital so we basically in 2026 yes principle lost in translation no worries okay that's interesting model very cool okay your cro tell me about the price increase everyone's always scared to increase prices how did you guys do it without pissing off pissing off users that was so hard uh since it was our first time and we had an increased price since 2016 first of all and our costs were severely increasing especially salaries wages for developers um so initially we wanted to do something like 10 percent uh since it was so long but at the same time it didn't feel right because we're going through the hassle of communicating with everyone um so last summer we decided to do something a little steeper we wanted to create like an asymmetrical advantage to go with our pro plan we have two plans one is the scheduling only the other one is like a little more you have scheduling plus time and attendance your business is the retention rates are better there because you're using it more so what we did is we increased the base plan by 37 and we increased the pro plan by 18 creating a symmetrical advantage to switch to the pro plan you know um so that's so the average increase is about 26 well if if you if you compound everything depending on our customer split right now um so overall we went for a big increase because it had been five years it's it hasn't been so bad uh we sent a communication we first call our larger customers we gave four months of advance a notice and we also uh said that anyone who would switch to an annual plan would lock up their price for one year so that would delay furthermore the uh the increase um and so over the past 30 days you added a lot of revenue from upgrades how much total new mrr did you get because of that did you say mr yep yeah okay so actually it was effective starting jan first and today we're the 12th so let me give you the my fairest estimate for for this month uh so it's in cad i'm just going to convert it we're going to get about 55 000 mr in january just from the price increase and most likely another 20 when the annual contracts come due for renewal at the end of this year because they delayed the increase yeah so it's almost an 18 increase in revenue in the first 20 days of the new year because you were smart about how you did the price increase yeah and and uh the really the annual option the lockout price was a suggestion coming from another ceo in a sas company in quebec and that went really well giving three months notice explaining why cost of increase uh sorts of stuff investments we were doing plus giving the annual you know option to lock up was re really well received um our churn so far is going to be less than two percent of revenues anywhere between one and one point eight percent of our revenues my turn this month in january and i believe it's going to be annual you think you only have 1.8 total revenue churn gross revenue during this whole year um in consequence of the race because we tracked the the churn reasons for following us and just ignore the raise for a second let's look at 2021 what was what was total revenue journal in 2021 on a percent basis nine percent not okay and what was expansion between 11 and 12. okay so you guys are like a hundred and two hundred three percent net dollar retention you got it can you drive that up higher you can get to 120 130 we're expanding into new hr modules which will entice we believe a lot of customers to upgrade to new plans so that will normally increase our basically that it will increase the amount of mr per per customer um on the churn side we're still trying to find more reasons why people you know drop the usage and stuff but it's not really an issue at less than one percent vermont right now so we're working more on the price increase new modules new markets that makes sense what's your total team size today 35 people how many engineers uh i believe there are 14 right now oh wow okay and your cro do you manage the sales team and this end quotas uh no i don't and we used to be uh well i have a partner who's doing sales now he's got a new team since the last year we're trying to ramp up the outbound team we used to be inbound only mostly uh so since the last year's got our team of four right now we're trying to build codas but it's it's hard not being you know we haven't been like this since the start so we're getting there do you know what your tack is to get a new customer that pays 1100 for the year yeah a bit anywhere between 500 and 600 so where are you spending that money usually uh google adwords even bing um we use a few years back to be on facebook it was it was good but it became sorry to say i don't want to say a wrong word but shitty yeah yeah i know you're i've said way worse all right but mainly so what are you going to spend total this month on google adwords or just paid marketing uh paid marketing it should be about twenty thousand fifteen or twenty thousand okay interesting hey it makes a lot of sense and are you what are you targeting is there a specific niche you're targeting uh retail niches uh pharmacies drugstores elderly residences we were trying it's funny because before you know initially in 2015 2016 most of our clienteles were restaurants and in 2017 2018 as i were coming up not as a cro but vp of sales back then um and with my accountant background i wanted us to diversify into recession proof or recession resistant industries so we went into drug stores retail uh sports goods things that that would pass through this and work we're keeping that effort which has proven to be one of the best decisions ever especially through covid because restaurants basically went down while the other industries we were in uh kept going up sebastian we're rooting for you we love this story now are you planning to raise more capital here this year or can you stay pro you know go to profitability and stay sort of bootstrap moving forward we're gonna keep bootstrapping forever i hope i love that all right let's wrap up with the famous five number one favorite book um favorite book oh that's a hard one i would say i'm going to keep it with business because i watch your other podcast i'm going to say the hard thing about hard things number two is there a ceo you're following or studying yeah the company is expel it's on a nasdaq um and the ceo is ryan pape he grew he grew the business it's a windows film and protective paint for for cars he grew the business for like from like almost bankruptcy back in 2021 to uh over a billion dollar market cap today wow number three what's your favorite online tool for building agendrics right now i believe it's office vibe office five number four what's your favorite or how many hours of sleep to get every night eight or nine and what's your situation married single kids single okay uh and how old are you thirty thirty years old last question something you wish you when you were twenty um that's such a good one i'd like to tell him that he doesn't have to rush the diploma career management role entrepreneurship all that stuff and and that everything is going to fall into place in time and in other times i think i wish i took a travel sabbatical after uni uh i think i heard that term from professor uh scott galloway you know he has podcast i thought that resonated with me guys at gendrix.com launched in 2015 hit 30 000 a month in revenue in 2016. broke 220 000 a month exactly a year ago and now 381 thousand dollars a month in revenue they just added 50 000 in mr the past 20 days because of a great price increase they did very smart uh release there again now doing 4.5 million in total arr they've raised a total of 4.2 4.5 ish date a lot of that went to buying out the early founder and shareholders to clean up the cap table call reverse dilution now 35 on the team 14 engineers four sales reps as they look to continue to scale 103 net dollar attention which is great and kak really healthy 600 bucks for a six-month payback period as they look to scale hopefully bootstrapped moving forward sebastian thanks for taking us to stop messi 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 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