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Founder Interview

How B2Chat Reached $1.4M ARR with 500 Customers in LATAM Managing WhatsApp Channels (Interview with CRO and Co-Founder Pamela Richter)

Interview Date
December 16, 2021
Interviewee
Pamela RichterCRO and Co-Founder
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Watch the full interview

Company Metrics at Interview Time

ARR (2021, annualized)

$1.4M

Customers (2021)

500

ARPU (2021)

$200 per month

Gross Churn (2021)

1.8% per month

Team Size (2021)

35

Historical Snapshot

These numbers were reported by Pamela Richter during her interview with Nathan Latka in December 2021 and are a historical snapshot, not current figures. See B2Chat’s current numbers.

Key Takeaways

  • 01Richter put B2Chat's revenue at about $100K to $120K a month in December 2021, or roughly $1.4M annualized, and said the company had doubled its monthly recurring revenue over the year.
  • 02The company serves 500 customers in Latin America as of December 2021, up from 300 customers in 2020.
  • 03Average revenue per customer is $200 per month, charged on a per-seat and per-channel subscription basis.
  • 04Richter put monthly churn at 1.8% and said about five or six customers leave each month.
  • 05B2Chat raised $750,000 via a convertible note in 2020, with Globant as a notable investor.
  • 06The team grew from 7 people at founding in 2017 to 35 people by December 2021.
  • 07The company generates approximately 700 inbound leads per month and converts 30 to 40 into new customers.
  • 08Seven sales reps are on the team, each with a quota target of 12 new customers per month, though Richter said the team was running below that target at the time of the interview.
  • 09Average customer lifetime is approximately 2 years, according to Pamela Richter.
  • 10WhatsApp Business API channel management is the core and most popular product feature in Latin America.

Company Metrics at Time of Interview

MetricValueSource
ARR (2021, annualized from $120K/month)$1.4MFounder interview, Dec 2021
Monthly Revenue (Dec 2021)$100K to $120KFounder interview, Dec 2021
ARR (2020, implied)$720KFounder interview, Dec 2021
Customers (2021)500Founder interview, Dec 2021
Customers (2020)300Founder interview, Dec 2021
ARPU (2021)$200 per monthFounder interview, Dec 2021
Gross Monthly Churn (2021)1.8%Founder interview, Dec 2021
New Customers per Month (2021)30 to 40Founder interview, Dec 2021
Inbound Leads per Month (2021)700Founder interview, Dec 2021
Sales Reps (2021)7Founder interview, Dec 2021
Team Size (2021)35Founder interview, Dec 2021
Team Size at Founding (2017)7Founder interview, Dec 2021
Total Funding Raised$750,000Founder interview, Dec 2021
Year Founded2017Founder interview, Dec 2021
Average Customer Lifetime (2021)2 yearsFounder interview, Dec 2021

Growth Breakdown

Revenue

Richter said B2Chat's revenue was running at about $100K to $120K a month in December 2021, which annualizes to roughly $1.4M, and that the company had doubled its monthly recurring revenue over the year: a year earlier, "we were half of that." She did not give a 2020 dollar figure, so the $720K shown here is implied rather than reported, derived from that doubling and from the roughly 300 customers B2Chat had at a $200 average ticket. Revenue comes from software subscriptions priced per seat and per channel, plus the WhatsApp Business API message charges B2Chat resells on top of the subscription.

Customers

The customer base grew from approximately 300 companies in 2020 to 500 companies in 2021, all primarily based in Latin America. The company converts 30 to 40 new customers per month from roughly 700 inbound leads.

Team

The team expanded from 7 people at founding in 2017 to 35 people by December 2021. Approximately 30% of the team are engineers, and 7 are dedicated sales reps. Pamela Richter noted that hiring remains one of the company's key challenges.

Funding

B2Chat raised $750,000 via a convertible note in 2020, with Globant, a large Argentine software company, participating as an investor. No additional capital was raised in 2021, and the company was focused on organic growth at the time of the interview.

Growth Strategy

Inbound Lead Generation

B2Chat generates approximately 700 inbound leads per month through its inbound marketing strategy. While not all leads convert, the volume provides a consistent pipeline for the sales team to work through.

Per-Seat and Per-Channel Pricing

The subscription model charges customers based on the number of agent seats and the number of messaging channels they activate, such as WhatsApp Business and Facebook Messenger. This structure allows revenue to expand naturally as customers grow their teams or add channels.

Latin America Focus and Wage Arbitrage

By concentrating on Latin American markets where WhatsApp is the dominant business communication channel, B2Chat built strong product-market fit. Paying sales reps at Latin American wage rates while billing customers in US dollars creates a favorable unit economics structure.

Retention Through Product Depth

With a gross monthly churn of only 1.8% and an average customer lifetime of approximately 2 years, B2Chat retains customers by continuously improving product features. Pamela Richter noted that the first customer, acquired in 2017, was still active at the time of the interview.

WhatsApp API as a Core Differentiator

B2Chat built its platform around the WhatsApp Business API, enabling multiple agents to manage a single WhatsApp line with full measurement and audit capabilities. This solved a specific and urgent pain point for Latin American businesses that rely heavily on WhatsApp for sales and customer support.

Best Quotes

“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.”
“So the average ticket that they pay us is around $200.”
“So currently we have around 500 customers. It's companies mainly in Latin America.”
“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 our software was really, you know, it was more simple. We've been able to create better features for the software.”
“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.”
“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.”
“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.”
“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, 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.”

What Happened Next

This interview captured B2Chat at a moment of strong momentum in December 2021, with $1.4M ARR and 500 customers across Latin America after doubling revenue in a single year. Pamela Richter indicated the company was focused on deepening its Latin American presence before considering a Series A raise of approximately $5M roughly twelve months out. The figures here are a point-in-time snapshot from that conversation and do not reflect the company's current performance. Visit the B2Chat company profile on GetLatka for the most up-to-date numbers.

View B2Chat’s current profile and metrics

Full Transcript

Chapters

Introduction and Company Overview

Nathan Latka

00:00Hey, 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?

Pamela Richter

00:13>> Yes, absolutely.

Customer Segment and WhatsApp Problem in LATAM

Nathan Latka

00:15Okay. Tell us, who who's paying you? Do you have a customer segment you're focused on?

Pamela Richter

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.

Average Ticket Price and Pricing Model

Nathan Latka

00:48Very cool. Okay. And give me a sense of what these customers are paying you on average per month to use the technology.

Pamela Richter

00:54>> Yes. So the average ticket that they pay us is around $200.

Nathan Latka

01:01Okay. What do they get for that?

Pamela Richter

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.

Nathan Latka

01:34And Pamela, put us on a timeline for us. When did you guys launch?

Launch Year and First Customer Story

Pamela Richter

01:38>> So we launched in 2017, four years ago. Four years ago.

Nathan Latka

01:43Okay, great. And tell me about how you got your first customer. Do you remember?

Pamela Richter

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.

Nathan Latka

02:37That's amazing. Okay. So the producer was number one. How many customers today?

Current Customer Count: 500 Companies

Pamela Richter

02:41>> So currently we have around 500 customers. It's companies mainly in Latin America.

Monthly Revenue and WhatsApp API Charges

Nathan Latka

02:49Okay. And 500 times $200 a month on average is about $100,000 a month in revenue. Is that right?

Pamela Richter

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.

Nathan Latka

03:19Oh, 120. And if you're doing that today, where were you exactly a year ago?

Year-Over-Year Growth and 2020 Comparison

Pamela Richter

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.

Fundraising: $750K Convertible Note and Globant

Nathan Latka

03:54And you've chosen to raise capital. How much did you raise?

Pamela Richter

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.

Nathan Latka

04:15And that was 750,000 last year. That was a pre seed round, I guess?

Pamela Richter

04:19>> Correct.

Nathan Latka

04:20And did you guys sell what about 15% of the business?

Pamela Richter

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.

Nathan Latka

04:32What 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?

Pamela Richter

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.

Team Size: 35 People and Hiring Plans

Nathan Latka

05:09Very cool. Tell me about the team today, Pamela. How many people?

Pamela Richter

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.

Nathan Latka

05:37And about of the 35, how many are engineers?

Pamela Richter

05:40>> Of the 35, 30% of them are engineers.

Nathan Latka

05:44Okay. So call it 10 or 11 engineers. And how many sales reps?

Pamela Richter

05:48>> Really, no. I'll I'll sell around fourteen fourteen, 15. Yeah.

Nathan Latka

05:52Okay. And how many sales reps?

Pamela Richter

05:54>> And sales reps, we are right now at seven.

Sales Motion: Leads, Conversion, and Quotas

Nathan Latka

05:57Interesting. 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?

Pamela Richter

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.

Nathan Latka

06:44Pamela, do the account executives have a quota?

Pamela Richter

06:47>> What's that?

Nathan Latka

06:47Do they do your account executives have a quota target?

Pamela Richter

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.

Nathan Latka

07:04So 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?

Pamela Richter

07:14>> Correct. Correct.

Nathan Latka

07:15How do you pay them? You must be able to pay them very little money.

Pamela Richter

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.

Churn Rate and Customer Retention

Nathan Latka

08:14Understood. And tell me more about churn. In your kind of company, churn is critical. What's your churn the past twelve months?

Pamela Richter

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.

Expansion Question and Two-Year Customer Lifetime

Nathan Latka

08:44Of course. Now do you have expansion revenue so your net dollar retention is above a 100 or no?

Pamela Richter

08:51>> Come again?

Nathan Latka

08:52If 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?

Pamela Richter

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.

Famous Five: Books, Tools, and Personal Life

Nathan Latka

09:22Okay. Very cool. Heck of a story here. Nice growth. Let's wrap up with the famous five. Number one, favorite business book.

Pamela Richter

09:29>> Favorite business book. I like Lean Startup.

Nathan Latka

09:34Number two, is there a CEO you're following or studying?

Pamela Richter

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.

Nathan Latka

09:52Number four, what's your number three, what's your favorite online tool for building b2chat?

Pamela Richter

09:57>> I like Notion. We like Notion a lot.

Nathan Latka

10:00And number four, how many hours of sleep do get every night?

Pamela Richter

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.

Nathan Latka

10:14And what's your situation? Married? Single? Kiddos?

Pamela Richter

10:17>> Yeah. Married. Married. I'm married.

Nathan Latka

10:19No kids. No kids.

Pamela Richter

10:20>> No kids. No kids.

Nathan Latka

10:21And Pamela, do mind me asking how old you are?

Pamela Richter

10:23>> Yes. I am 35.

10:26>> 35.

Nathan Latka

10:27Last question. Something you wish you knew when you were 20.

Closing Advice: It Is All About the Team

Pamela Richter

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.

Nathan Latka

10:40Guys, 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

11:02more and better. Pamela, thanks for taking us to the top.

Pamela Richter

11:05>> Oh, thank you very much, Nathan. Have a good day. Bye.

Nathan Latka

11:10One 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

11:35Central. 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

11:57fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to 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

12:19up 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.

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