B2Chat Revenue, Valuation & Funding (2024)

hey folks my guest today is pamela richter she's the 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 yes absolutely okay tell us who's paying you do you have a customer segment you're focused on uh basically what we discover is that the customers couldn't really manage the whatsapp for multiple agents so they were not able to um 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 um measure and and audit what was happening in that channel so that's why we created b2 chat very cool okay and give me a sense of what these customers are paying you on average per month to use the technology yes so the average um the average ticket that we that they pay us is around two hundred dollars and what do they get for that so what they get at the software which is a server as a service uh so they pay for the subscription and then um based on the number of seats or the number of agents that they want to attend those lines so they pay for the for the seats and also the 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 uh they also can pay for other uh type of um channels like messenger stuff like that and pamela put this on a timeline for us when did you guys launch so we launched in 2017 four years ago four years ago okay great and tell me about how you got your first customer do you remember yes um our first customer was a very big um 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 uh 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 um measurement of what's happening in that line we don't know how people are responding into that line we don't have metrics and so um that was like our that we had the the um the minimum viable product and so i went there and i said okay look we have a solution that it might help you uh manage better the communication over what's happened and and they got it and it's our first customer and uh you know this they're still with us so it's it's pretty it's pretty i'm pretty happy that's amazing okay so the producer was number one how many customers today so currently we have um around 500 customers um it's it's it's companies uh mainly in latin america okay and 500 times 200 bucks a month on average is about a hundred thousand dollars a month in revenue is that right correct we do also charge for uh that's the whatsapp whatsapp monetizes uh something that is called whatsapp api which is um whatsapp for enterprise and they also monetize with um charging the messages so basically you you are correcting your number but we do have uh other stuff that we sell so it's around 120 000. oh 120 and if you're doing that today where were you exactly a year ago a year ago we were uh a half of that like we were like this this year we were we were able to duplicate our our revenue our monthly uh recurring revenue uh a year ago we were actually looking for for investors uh we had around um 300 customers at prox and um and our software was really uh you know it was more simple i would be we've been able to to make to create better features for the software and you've chosen to raise capital how much did you raise yes so we did that and we raised um 750k uh that was a year ago um and one of the uh investors was globand uh it's a very big software company in argentina um and so you know we're pretty happy that to have them on board and that was 750 000 last year that was a precede round i guess correct and did you guys sell what about 10 15 of the business not not really it was a convertible it's you know it's in a convertible note so um and it's going to be around five percent of the business if that gets converted what was the cap then on that like a 10 million cap 7.3 7.3 million cap okay very interesting and have you raised capital this year or no no we haven't raised capital this year we're not looking to raise capital this year what we're trying to do is uh we we want to have more customers in latin america be able to um you know grow a little bit more and then maybe in 12 months i'll be starting a series probably like a series a around you know five million dollars will that's like a series a here in latin america so it's going to be like in 12 months approximately very cool tell me about the team today pamela how many people yeah so the the team has been growing we have 35 people now um when we started the the business and the idea we were uh basically around seven uh so yeah it's been it's been very very interesting we're 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 uh we want to have around 50 people for for february and about of the 35 how many are engineers of the 35 um 30 of them are engineers okay so call it 10 or 11 engineers and how many sales reps uh really no i will sell around 14 14 15 yeah okay and how many sales reps and sales reps we are right now at seven 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 yeah that's that's a gr that's a great question and that's one of the things that we really need to tweak um we're getting around um approximately 700 uh leads per month but that's you know with with inbound strategy and a lot of those leads are not converting because maybe they're not companies or maybe they're uh you know they're just wanting to understand what's the software about where and we're converting uh approximately customers around 30 to 40 customers a month so what we what we what we do is that those leads uh that we bring uh it's mainly also for training them and you know for them to understand the software um executives have a quota what's that do they do your account executives have a quota target yes the quota target it's uh 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 uh trying to reach there because we're actually lower than that currently so 12 customers at 200 bucks 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 ar each year correct correct correct how do you pay them you must be able to pay them very little money um 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 um but but that's a challenge that we have when when we want to open the company in the state and if we want to actually sail to the states uh whatsapp is not a very uh usual likes it's not a very important channel right now in the states and that's what we sell the most in latin america so eventually if we want to go and jump into the american um you know market we need to really understand what features the american market needs which im channels they need and finally that we need to increase our ticket otherwise we will we won't be able to pay uh sales reps in the states with with the state um uh wage understood and tell me more about churn and your kind of company turns critical what's your turn the past 12 months yes the churn has been um 1.8 it's been it's been very good per month correct that's about uh five or six clients that leave us per month um and so we've been able to be a bit a bit stable on that sense um you know the challenge is more bringing bringing and expanding new customers at the rate that we want to grow of course now do you have expansion revenue so your net dollar retention is above 100 or no come again if someone starts paying you 100 a month a year ago and you upsell them to 300 bucks a month that's 200 expansion how much what percent of expansion do you have the percentage of expansion right now um it's based on the the number of seats they purchase so basically the client stays with us approximately two years that's our like lifetime value um but uh i i do not have the the exact percentage of the expansion right now okay very cool heck of a story here nice growth let's wrap up with the famous five number one favorite business book favorite business book um i like lean startup number two is there a ceo you're following are studying a ceo yes i am um uh well let's think let's think uh it's latin america it's from here it's the sea of uh of urapi i don't know if you are familiar with that ceo of urapi number four what's your number three what's your favorite online tool for building beach chat i like notion we like notion a lot and number four how many hours i sleep to get every night um i actually sleep a lot i like to sleep a lot i think it gets it makes my mind uh get better uh probably seven eight yeah i try to sleep as much as i can and what's your situation married single kiddos yeah married married i'm married nobody kids no kids no kids no kids and pamela do you want me asking how old you are yes i am 35 35 last question something you wish you knew when you were 20 well that um you know that it's everything about the team that you really have to go and look for people to help you otherwise you could because you cannot do everything alone so it's all about the team 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 raised a 750 000 pre-seed round last year at a 7.3 million 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 more and better pamela thanks for taking us to the top oh thank you very much nathan have a good day bye 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 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