Avify Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Pedro Gutierrez. He was born in San Jose, Costa Rica. He's a computer engineer and has developed multiple businesses the past five years specializing in marketing, ecommerce development, and MVPs. Right now, he's running Avify that became the first startup to be accepted into 500 startups. Alright. Pedro, you ready to take us to the top? [00:17] >> Yeah. [00:18] Alright. Let's do it. So so what is Avify? [00:21] >> Well, Avify is a centralized back office for e commerce automation. So during the pandemic and the last few years, we noticed that there is a lot of people getting new orders from social commerce, but they still use e commerce channels like Shopify, Etsy, and other different channels. So they need a platform that can centralize everything. And we created a social commerce tool that helps them to have everything in one place and synchronize channels. [00:52] And so how much do they pay you per month on average to use this tech this tool you've built? [00:56] >> They pay $49 a month for the basic plan. We just opened a super basic plan for $499. Just if you are testing a product, see if you can you can start selling it for less than 10 orders. But the basic plan is $49. [01:14] Amazing. And put this on a timeline for me. When did you launch the business? What year? [01:18] >> Well, this is crazy because we were a software agency until December last year. We started Avify in February 2021 as a pilot. And after five months working and pivoting and checking new things we needed to to create, we launched officially in July last year with a name. And we started [01:43] >> acquiring new customers. We shut down the agency in December, and we started acquiring new customers and totally dedicated team from January to to date, and we have doubled the amount of customers we have. [01:57] How much revenue was the agency doing? [02:00] >> In that moment, the agency? [02:02] Yeah. [02:03] >> It was about $30 k per month, probably. [02:05] Okay. Okay. So it wasn't that hard to shut down then? [02:09] >> Yeah. No. No. At at the beginning, it was like we were struggling because of the pandemic to get high high tickets for the the consulting side, But we were dreaming with having a SaaS every month. So it was a great idea at the beginning. And then when we got accepted in 500, we say, okay, guys, this is the time we need to cheat on the cheat on the agency and just focus on this. [02:33] I think it's funny, everyone listening right now who's an agency owner is going, man, I'm also an agency owner wishing for higher margins to build a SaaS company. That's what everybody wants to do. Exactly. Well, you can tell that you really know your customers because your website's beautiful. It looks like it's really, really well done. I imagine you got your first customers from the agency. Is that accurate? [02:51] >> Yeah. When the pandemic started and we created the software at the beginning, we started receiving a lot of requests from people that they needed something for start selling through internet. They didn't notice in that moment that the social commerce was the most important channel. But the first customers, they came because we are an opinion leader in e commerce development in Central America. And I started knocking door to door. Hey, guys. We have this new system. [03:20] >> What if you try it for a month for free and just tell me your feedback? And in that moment, we were finishing the startup school for YC, and we were pretty familiarized with retention, retention, retention. So I told the guys like, hey, you know, I'm gonna start interviewing as many people I can. So the first customers, they came for the interviews. My my first cold message is, hey, how are you? I'm the [03:44] >> owner of this software. I really want to have an interview with you. What do you think? And they jump in a chat in a call with me, and I sell the product in that moment. And they were like, you know, I really want to try it. So let's do it. So, so far we have more than a 100 customers and that's probably what we have been doing. [04:01] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:24] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:48] get a different valuation. A VC is gonna 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 [05:10] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [05:36] going out right now and you're raising your seed round. We'll 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 dataset of SaaS 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 [05:58] 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/products/valuations. 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. Alright. Let's jump back into [06:24] the interview. That's amazing. So a 100 customers at $49 per month. You're doing about 5,000 a month in revenue? [06:31] >> Not yet because we started with a better price for the first early beta testers of $29. It's an evergreen price for them, and we started acquiring $49 per month this month in May. So I see. We are in 3,000, 3,500 exactly. [06:50] 3,500. And that's amazing though. You're you're off sort of off to the races. Now have you bootstrapped this from your agency revenue or did you raise capital? [06:57] >> Yeah. It wasn't at the beginning, it was with the with the profit of the agency. Then when we started seeing that everything was getting traction, we raised a small family and friends round of $30 k, and then 500 startups continue the the the process with the with the investment. [07:16] So how much total have you raised? [07:18] >> 90,000. And right now, we have a pre seed round opened. We are raising $600,000, and we have closed a 140,000 so far. And what valuation are you hoping to get? 5,000,000 post money. [07:33] And the 90,000 that you already raised, what valuation was that at? [07:36] >> Oh, it was at the beginning, it was 500,000 and then 750,000. [07:41] Okay. So not not too much dilution. You only sold, what is that, about 15% of the business in your pre pre pre seed? [07:48] >> Exactly. Exactly. It's been about 13, 13%, I think. Yeah. [07:51] Yeah. And now you're selling another, call it, you know, 20% in the million seed on a 6,000,000 valuation. [07:58] >> Exactly. Yeah. The the idea is that we can finish this part with a 25, 26% dilution, and we can start working, get more revenue, hopefully, a breakeven point in next fifteen months. That's what we're planning, and go for a seed round with real numbers and positive positive numbers there. [08:17] You said, sorry, you're raising 600 today at a mill at 5,000,000 valuation? [08:20] >> 5,000,000 post money. [08:22] Yeah. Post money. Got it. Yeah. Cool. Well, this makes a ton of sense. Tell me more about the team. How many folks are full time? [08:28] >> Oh, right now we are 12. So the story is that we only we told to the guys in the town hall in November, hey, guys. We're gonna shut down this and we're gonna turn into Avify in in January. That's what we're gonna do. So all of them, they translate all their labors to Avify, and we are 12 right now. We are four founders and eight people on the team, and we are joining two more people next [08:50] >> week for sales and marketing. [08:52] So when you four founders started, you just split equity 25 each at the start? [08:57] >> No. My brother is one of the founders. He was not working with us at the beginning. He's a Magento and Shopify specialist. So he created the infrastructure behind Avify for integrations and the agnostic layer we have there. My CTO, Alexis, is infrastructure and everything about DevOps, and I do product management, sales, and the administrative part. And Pilar, she's our CMO. She's focused on marketing and having all our customers, yeah, updated with everything. So we have our [09:30] >> specific divisions. [09:32] But they're all different. Everyone has a different amount. [09:35] >> Yeah. Correct. Yeah. [09:36] Do you have the most? [09:38] >> Alexis and me, we have the most. [09:40] Yeah. I see. Okay. Okay. Okay. Fair enough. Alright. 12 people. How many on the team are engineers? [09:47] >> We are six, I think. Six. Are engineers. Yeah. Correct. [09:51] You mentioned focusing on retention early early on. What is your, know, your retention or your churn monthly today? [09:57] >> So far, our our churn is 1.5%. During all this process, we have forced some churn because we found not ideal customers at the beginning, and they were, like, paying every month, but they were not using the platform. So we are like, hey, guys. How are you? Tell us about what do you need for us? And they were like, you know, this is not my business. My full time business is a side job. So we started forcing [10:24] >> them, but it's like 1.5% of churn. And we are growing between 22 to 25% month over month. [10:32] Yeah. No. That's fantastic. Tell me a little bit more about how you're getting these customers. Are you paying to get them? What's your CAC? [10:39] >> No. Really, what we really like to do is to create free workshops with five with four specific topics. Funnels, creation of funnels, finances, paid media, and content creation. Because there's a lot of different customers, ideal customers, that they are moving from the physical and offline stores into the digital stores, and they need help to have more traffic and understand how they can start selling in automatic pilot. Right? So we are doing these free workshops. Every time [11:09] >> we run one of the of these workshops, we are getting between 300 and a thousand new leads. We are closing between three or 4%. And it's great because [11:22] What's the title of the workshop? [11:24] >> Sometimes it's just free workshop for entrepreneurs or free workshop for businesses. And we send them to a landing and we talk talk about the specific topics. So sometimes we do one week free high value content offers so they can come and check all the different resources and everything is recorded so they can get again access if they are in our email marketing. And it depends. Sometimes it's just on a specific workshop Like, give [11:51] me an example of a specific title. [11:54] >> We we we've made one in February. It was free workshop summer, free workshop for businesses. And they can see all the topics inside. [12:04] Yeah. Interesting. Very cool. Alright. Let's wrap up here, Pedro, with the famous five. Number one, the last what's the last book that you read? [12:11] >> The last book I read Scaling Up. Still [12:16] number two, is there a CEO you're following or studying? [12:22] >> Oh, that's a good question. [12:26] >> I have been following the CEO of Action Desk. [12:30] >> I I'm I'm I'm pretty interested about the the the job they are doing right now. [12:33] Number three, what's your favorite online tool for building Avify? [12:39] >> Figma, probably. [12:40] >> Yep. [12:41] Number four, how many hours of sleep do get every night? [12:43] >> How many what? [12:44] Hours of sleep. [12:46] >> I'm sleeping between seven and eight hours. Yeah. [12:48] That's that's good. And what's your situation? Married? Single? Kids? [12:51] >> I'm single. Yeah. [12:53] Okay. Any kids? [12:54] >> No. No kids for now. [12:55] Alright. And how old are you, Pedro? [12:57] >> I'm 30 years old. [12:59] >> 30. [13:00] Last question. What's something you wish you knew when you were 20? [13:03] >> I wish knew knew when I was 20. Mhmm. [13:09] >> Probably the [13:13] >> the about the internet, the explosion of the internet and the e commerce. Definitely, it's something that I will love. [13:19] Guys, Avify was launched last year out of an agency that was doing 30 ks a month in revenue. They shut that down when they were accepted to 500 startups. They've now raised $90,000 in a pre seed round at a 500,000 valuation. They're off to the races serving 100 customers already at $49 a month, doing about $3,500 in MRR or $50,000 in ARR scaling 20 to 30% here quickly. Team of twelve, six engineers, four co founders, again, [13:45] helping e commerce brands sell more effectively online by helping them with their back end operations. Pedro, thanks for taking us to the top. [13:51] >> Thank you. Thank you very much for your time. See you soon. [13:56] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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, 1PM [14:21] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big [14:44] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS 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 [15:05] for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and 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 [15:25] got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.