B2Chat Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Pamela Richter. She's a CRO and co founder of b2chat, a company transforming how customers engage with clients over WhatsApp, Facebook Messenger, and Instagram DMs to sell better and to sell more. Pamela, you ready to take us to the top? [00:13] >> Yes, absolutely. [00:15] Okay. Tell us, who who's paying you? Do you have a customer segment you're focused on? [00:19] >> Basically, what we discover is that the customers couldn't really manage the WhatsApp for multiple agents, so they were not able to understand what was going on in those channels. WhatsApp is very important for Latin America and most of our customers are in Latin America, so they couldn't really measure and and audit what was happening in that channel. So that's why we created b2chat. [00:48] Very cool. Okay. And give me a sense of what these customers are paying you on average per month to use the technology. [00:54] >> Yes. So the average ticket that they pay us is around $200. [01:01] Okay. What do they get for that? [01:03] >> So what they get in the software, which is a software as a service. So they pay for the subscription. And then based on the number of seats or the number of agents that they want to attend those lines, so they pay for the seats and also they pay for the channels. In this case, they pay for the WhatsApp line, which is like our most popular channel in Latin America. And, they also can pay for other, type [01:31] >> of, channels like Messenger, stuff like that. [01:34] And Pamela, put us on a timeline for us. When did you guys launch? [01:38] >> So we launched in 2017, four years ago. Four years ago. [01:43] Okay, great. And tell me about how you got your first customer. Do you remember? [01:46] >> Yes. Our first customer was a very big producer here in Colombia. Basically, I remember talking to them and they were like, hey, Pamela, we have a, you know, we have a WhatsApp line. The WhatsApp line is in a phone. There's a lot of people trying to respond to that line. Customers are going and like chatting with that line, but we don't have we have no measurement of what's happening in that line. We don't know how people [02:13] >> are responding into that line. We don't have metrics. And so that was like our that we had the the minimum viable product. And so I went there and I said, Okay, look, we have a solution that it might help you manage better the communication over WhatsApp. And they got it and it's our first customer and, you know, they're still with us. So it's pretty I'm pretty happy. [02:37] That's amazing. Okay. So the producer was number one. How many customers today? [02:41] >> So currently we have around 500 customers. It's companies mainly in Latin America. [02:49] Okay. And 500 times $200 a month on average is about $100,000 a month in revenue. Is that right? [02:55] >> Correct. We do also charge for that's the WhatsApp WhatsApp monetizes something that is called WhatsApp API, which is WhatsApp for enterprise, and they also monetize with charging the messages. So basically, you you are correct in your number, but we do have other stuff that we sell. So it's around a 100 and a 120,000. [03:19] Oh, 120. And if you're doing that today, where were you exactly a year ago? [03:23] >> A year ago, we were half of that. Like, we were like this this year, we were we were able to duplicate our our revenue, our monthly recurring revenue. A year ago we were actually looking for investors. We had around 300 customers approx and [03:44] >> our software was really, you know, it was more simple. We've been able to create better features for the software. [03:54] And you've chosen to raise capital. How much did you raise? [03:57] >> Yes. So we did that and we raised $750,000. That was a year ago. And one of the investors was Globant. It's a very big software company in Argentina. And so, you know, we're pretty happy that to have them on board. [04:15] And that was 750,000 last year. That was a pre seed round, I guess? [04:19] >> Correct. [04:20] And did you guys sell what about 15% of the business? [04:24] >> Not really. It was a convertible. It's, know, it's in a convertible note. So and it's going to be around 5% of the business if that gets converted. [04:32] What was the cap then on that? Like a $10,000,000 cap? 7.3. $7,300,000 cap. Okay. Very interesting. And have you raised capital this year or no? [04:42] >> No, we haven't raised capital this year. We're not looking to raise capital this year. What we're trying to do is we want to have more customers in Latin America be able to [04:54] >> grow a little bit more. And then maybe in twelve months, I'll be starting a series, probably like a series A around, you know, $5,000,000. Well, that's like a series A here in Latin America. So it's going to be like in twelve months approximately. [05:09] Very cool. Tell me about the team today, Pamela. How many people? [05:12] >> Yeah, so the team has been growing. We have 35 people now. When we started the business and the idea, we were basically around seven. So yeah, it's been very, very interesting. We are super happy with the team. And I think that's one of the challenges that we're facing right now. It's actually bringing more people on people on board. We wanna have around 50 people for for February. [05:37] And about of the 35, how many are engineers? [05:40] >> Of the 35, 30% of them are engineers. [05:44] Okay. So call it 10 or 11 engineers. And how many sales reps? [05:48] >> Really, no. I'll I'll sell around fourteen fourteen, 15. Yeah. [05:52] Okay. And how many sales reps? [05:54] >> And sales reps, we are right now at seven. [05:57] Interesting. What's your sales motion look like? How many leads your account executives do per month and how many do you expect them to close? [06:03] >> Yeah. That's that's a that's a great question and that's one of the things that we really need to tweak. We're getting around approximately 700 leads per month, but that's, you know, with inbound strategy and a lot of those leads are not converting because maybe they're not companies or maybe they're, you know, they're just wanting to understand what's the software about. We're converting approximately customers around 30 to 40 customers a month. So what we do is that [06:37] >> those leads that we bring, it's mainly also for training them and, you know, for them to understand the software. [06:44] Pamela, do the account executives have a quota? [06:47] >> What's that? [06:47] Do they do your account executives have a quota target? [06:50] >> Yes. The quota target, it's it's 12 customers a month. That's the the the the total. But, you know, we're we're we're kind of like trying to reach there because we're we're actually lower than that currently. [07:04] So so 12 customers at $200 a month means you expect an account executive to bring in about $2,400 of new monthly recurring revenue each month or about 30,000 in new ARR each year. Correct? [07:14] >> Correct. Correct. [07:15] How do you pay them? You must be able to pay them very little money. [07:19] >> Well, it's basically we sell in dollars and so our customers, they pay in dollars and we have wages in Latin America. So actually for the wages that we do have in Latin America, it's actually pretty good. But that's a challenge that we have when we want to open the company in The States and if we want to actually sell to The States. WhatsApp is not a very usual, like it's not a very important channel right now [07:48] >> in The States and that's what we sell the most in Latin America. So eventually, if we want to go and jump into [07:59] >> understand what features the American market needs, which I'm channels they need, and finally that we need to increase our ticket, otherwise we won't be able to pay sales reps in The States with The States wage. [08:14] Understood. And tell me more about churn. In your kind of company, churn is critical. What's your churn the past twelve months? [08:20] >> Yes, the churn has been 1.8. Been very good per month. Correct. That's about five or six clients that leave us per month. And so we've been able to be a bit a bit stable on that sense. You know, the challenge is more bringing bringing and expanding new customers at the rate that we want to grow. [08:44] Of course. Now do you have expansion revenue so your net dollar retention is above a 100 or no? [08:51] >> Come again? [08:52] If someone starts paying you a $100 a month a year ago and you upsell them to $300 a month, that's 200% expansion. How much what percent of expansion do you have? [09:03] >> The percentages of expansion right now, it's based on the number of seats they purchase. So basically the client stays with us approximately two years. That's our lifetime value. But I do not have the exact percentage of the expansion right now. [09:22] Okay. Very cool. Heck of a story here. Nice growth. Let's wrap up with the famous five. Number one, favorite business book. [09:29] >> Favorite business book. I like Lean Startup. [09:34] Number two, is there a CEO you're following or studying? [09:37] >> A CEO? Yes, I am. [09:42] >> Let's think, let's think. It's Latin America. It's from here. It's the CEO of Rappi. I don't know if you are familiar with that. [09:51] >> CEO of Rappi. [09:52] Number four, what's your number three, what's your favorite online tool for building b2chat? [09:57] >> I like Notion. We like Notion a lot. [10:00] And number four, how many hours of sleep do get every night? [10:05] >> I actually sleep a lot. I like to sleep a lot. I think it gives it makes my mind get better. Probably seven, eight. Yeah. I try to sleep as much as I can. [10:14] And what's your situation? Married? Single? Kiddos? [10:17] >> Yeah. Married. Married. I'm married. [10:19] No kids. No kids. [10:20] >> No kids. No kids. [10:21] And Pamela, do mind me asking how old you are? [10:23] >> Yes. I am 35. [10:26] >> 35. [10:27] Last question. Something you wish you knew when you were 20. [10:30] >> Wow, that, you know, that it's everything about the team that you really have to go and look for people to help you otherwise you can because you cannot do everything alone. So it's all about the team. [10:40] Guys, team is what matters. This company was doing $60,000 a month a year ago, now doing $120,000 a month, 100% year over year growth, raises 750,000 pre seed round last year at a 7,300,000 valuation. They're getting 700 new leads per month, converting 30 to 40 into customers to add to their 500 customer base today, team of 35. Again, they help you manage customer support, chat and sales via WhatsApp, instant messengers, and DMs so you can sell [11:02] more and better. Pamela, thanks for taking us to the top. [11:05] >> Oh, thank you very much, Nathan. Have a good day. Bye. [11:10] 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 [11:35] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. 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