BEE Content Design Revenue & Valuation (2024)

[00:00] Hey, folks. My guest today is Massimo Arrigoni. He's building beefree.io. He's the CEO of the company, as a business unit, and and the company is a business unit of a larger company called Growens. We find them on Bloomberg. They're focused on democratizing content design. They've got a visual builder for email, pages, and pop ups available at beefree. They're embedded into over 600 plus SaaS applications, including 40% of Gartner's quadrant for multichannel marketing platforms. Massimo, are you [00:28] ready to take us to the top? [00:29] >> We're ready. Yeah. I'm [00:31] still shocked the guy as creative as you. You're still getting everything you want out of working in a subsidiary of a publicly traded company, but you're still enjoying yourself. [00:41] >> Yeah, totally. You know, there's pros and cons, but it's fun. Yeah. [00:47] All right. So, what's changed since we last spoke? Is the playbook still the same again? You were really white labeling these sort of page builders for other SaaS applications. [00:55] >> It's a big space as you know, democratizing design, you look at the last raise that Canva did, right? You know, 40x their ARR. I mean, the space is just exploding. And we're playing in the same space, focused on designing emails and landing pages, now pop ups too. About 50% of B is the embeddable editor. So SaaS companies that embed platform just because it makes sense instead of developing their own. And then the other 50% is people, [01:27] >> it's more like the Canva side. People that just come to beefree. And want to design emails and pages faster with no friction, and so they sign up for that. [01:40] Interesting. Okay, so walk me through a little bit of the growth. So this is like an Is most of your revenue coming from white label partners paying you or from direct customers paying you smaller ARPUs but higher volume? [01:52] >> Yeah, like I said, right now it's almost split fiftyfifty, which also makes it difficult to say, okay, just focus on one of the two. They're growing fast, both of them, although they are very different. On the embeddable editors side, only about 600 customers, monthly ARPA about $600 and you go from little startups to large, large, you know, SaaS providers. [02:25] >> There it's a long sales cycle, you know, etcetera, etcetera, because if they're embedding our software in there, so they kick the tires for months. But once we're in, no churn. Like there's basically no churn because you cannot take out a visual builder that you've embedded, right? So gross [02:46] >> customer churn is almost zero and the revenue churn is negative, know, big time negative. On the other side, so you're a marketing team or a non profit that wants to design an email fast for a campaign, you go to beefree. And you sign up and that's it, very much a product led growth strategy. So there's the free editor that you don't even have to put in your email to use it, completely free, and then you upgrade [03:18] >> to BEE Pro when you want more stuff and that's similar to a canva play. So there are a lot of users, tens of thousands of users of the very free version, and then we convert about 9% of those into free trials, over 10,000 free trials a month, and then, you know, down from there. [03:42] 10,000 free trials a month. That's incredible. When people convert on the SMB thing, what's the average ARPU? What's ARPU there? [03:49] >> It's about $25 [03:53] That's higher than I would. That's actually, I'd say that's pretty strong actually for this kind of product. That's a good price. [03:59] >> And it's there too. We're very much still in a discovery space because we have, we just signed a deal, unfortunately we can't disclose the company, very large pharmaceutical company that has with this I'm just kidding. Yeah, right. 1,500 people in their company designing emails with this thing. It's just basically a matter of people frustrated because if they don't have a [04:25] tool like this, they have [04:25] >> to wait for marketing to get the stuff done and it takes [04:28] How many are paying for it now, just the SMB one? [04:32] >> About 11,000. [04:35] You have 11,000 people paying $25 a month? [04:38] >> Right. And the spectrum, again, the interesting part of it where you see this huge potential and you see why Canva did that fundraising at that level of multipliers that it's the little guy and it's the huge corporation that says, okay, this is a lot faster than using agencies or a lot faster just going through the bottleneck of my marketing team, Because you might have salespeople in 50 countries that just need to update that sales sheet in [05:08] >> the case of Canva. In our case, they need to update that little email that needs to go out, right? And they need to do it now, not in three weeks from now. So it's a massive space. We're super excited. [05:19] I mean, so can I add those two things together? You've got 11,000 customers at 25 a month, that's $205,000 a month in revenue, then 600 white label customers at $600 a month, that's 360,000 in MRR for a combined MRR of about what, $635,000? [05:34] >> So, again, we're we're subsidiary of a publicly traded company. So the last thing that that we disclosed was over 7,000,000 in ARR. So you're right. You're right there. I mean, in yeah. Yeah. In in I'm on the I'm right. [05:49] Come on. I'm right on the money, baby. [05:50] >> Let's go. You are. You are. Are. You are. So so over over 7,000,000 in ARR, growing fast. And [05:58] Where were you a year ago? [06:01] >> A year ago well, this year we're growing over 50%. [06:05] So you were at like $5.5.5 600,000 or something about a year ago run rate wise. [06:12] >> Yeah. Yeah. 50% year over year growth. [06:15] Yeah. Interesting. [06:16] Right. Right. [06:17] Where's most of coming? Is it signing up more SMB customers or is it expanding revenue on white label accounts? [06:23] >> Both. Both. White labels accounts, so the embeddable editor, again, their long sales cycle slowed down a little bit during COVID where people were just like in wait and see. And now we just had a tremendous last couple three, four months. So a lot of customers now that are saying okay, let's go. And there you're right, it's people kicking the tires and then growing. So the number of new customers that we sign up is smaller, but that's [06:54] >> also why we were talking to the two of us about SaaS, so that's why we're a SaaS next week. You know, you say, Hey, if you're in the SaaS space, you gotta look at this because likely in your SaaS application, people are designing stuff. And instead of building your own visual builders, embed this and they go, Yes, let me take a look at it. It takes a long time for them to do that, but then you [07:14] >> sign up, you know, a larger customer. Yeah. So, [07:18] tell me more about like you as a leader, right? So, you're unique in that most of my interviewers are like founders that own 90% of the business. You, I'm assuming, do not own 80 to 90% of beefree. I assume you have some sort of equity grant, but is the equity grant sort of through the parent company or do you actually own a portion of the subsidiary? [07:35] >> So, without disclosing, you know, stuff that I can't disclose, but yeah, a piece of it and really the one that's publicly traded is the holding company. So the US corporation is just a 100%, know, wholly owned subsidiary. And by the way, again, without disclosing anything that's not publicly traded information, the valuation of Growens, it's a publicly traded company in Italy, the valuation makes no sense. [08:03] What is it? [08:04] >> The entire group is, if you look at it [08:07] >> right now, it's valued at around €65,000,000 and I just told you that B does, 7,000,000 in ARR growing at that rate, and b is just a small portion of of the company. Right? So you do the math. Again, we're traded on It's it public. [08:23] It's public. Right? What's what's revenue? What's the revenue multiplier right now on the valuation? [08:27] >> It's one. What? Yeah. Makes no sense. Well, [08:32] is all the other revenue like just really shitty low margin revenue or something? [08:36] >> Not really. I mean, traded information publicly available. Yeah. You can look at it, but EBITDA was I think 2,500,000 in the first six months of the year. We just put out the H1 report. It's just that it's a small stock exchange in Italy without that much liquidity, So that's Yeah, if [09:01] this was the case, Massimo, anyone listening right now, and we have a lot of people listen that are private equity firms, growth equity firms, there's a lot of buyers that listen to this show, they're immediately, and they should be thinking, Why don't I go buy beefree out of this subsidiary? Because if I just re put it in The US and put it, you know, here, we're gonna get a 5x multiple on a 7.5 run rate. Why, [09:19] I mean, have you been approached to do this? Why haven't you done it yet? [09:23] >> We get approached daily pretty much the parent company has a strong incentive to grow this as a key asset and unlock the potential of the parent company, which again, right now it's kind of stuck in a situation that's mostly due, we believe, the small market that we're traded on in Italy. Obviously we're looking at options. [09:49] Yeah, I was gonna say, I mean, if the whole business is trading at a 1X multiple and you're doing 7.5 right now yourself, if someone came and offered you two X that, so for, you know, 15,000,000 on cash upfront, which should be like two X the current share price, shareholders would have to agree to accept that. That's like a 100% premium on the current price. [10:05] >> Well, and as you know, the multiplier on SaaS companies like B is not 2x. [10:12] No, it's like, it should be like six, seven, six, seven, 8x, maybe higher. [10:17] >> Right, right. Yeah. Canva just raised it 40x. I mean, that's probably nuts, but that's because the space of democratization of design a is huge space. [10:26] Massimo, why aren't you doing this? Like, usually this story, you, the the guy that's stuck inside is going and raising from private equity, and you are spinning it out. Like, why aren't you doing that? [10:35] >> Well, first of all, I'm a product guy. [10:37] >> I'm not a finance guy. [10:39] Who cares? That's who should lead the company. [10:42] >> I I I have fun building products, and we're having a lot of fun building building our products, and my colleagues are, you know, worrying about the other stuff. And I do believe that we're gonna unlock this thing [10:54] >> pretty soon because it makes no sense of where we are right now. I think a lot of people simply have not understood what's inside Growens and what this company is doing. We have investors also kind of on the other side of The Atlantic that don't necessarily [11:14] >> deal with SaaS multipliers every day, and so they just look at maybe EBITDA or multipliers on EBITDA and that kind of stuff. So that's that's part of it. But yeah. No. I agree with you. Again, this is all publicly available information. Nothing nothing that's not publicly available. [11:32] Guys, Mainsail. I know you're listening. Level Equity. I know you're listening. SaaS Group. [11:37] >> I know [11:38] you're like, give this man $14,000,000 and let him spin this company out. Hello. This you're gonna, like, double your money very quick. If I had 14,000,000 to do a chipmask, I'd do the deal instantly. Okay? [11:47] >> I don't think yeah. I I don't think we're interested in in selling at at that price because this is a this is a this b has huge, huge potential. [11:55] Yeah. But it doesn't matter what you wanna sell it because if that if that goes to a shareholder vote at a two x premium on your current share price, it doesn't matter what you think. Like, the shareholders are gonna they're gonna take that premium. [12:05] >> Got it. But, well, you're talking about the shares of the publicly traded company though. Right? See. Yeah. [12:12] Mean, so what you would actually do is you would invest to take over enough shares of the public traded company to force a spin out of B. So, you would need, you know, 20% of 65,000,000, right? If you wanna start Guys, there you go. Slowly start buying on share prices. [12:28] >> There you go. We go. [12:29] We're a little bit burning at the gate here on the Latka podcast today. All right? [12:33] >> All right, Yeah, I love anyway. That's the strategy, right? That's what you would do. [12:39] >> Yeah, again, we're traded on AIM, which is smaller stock exchange. There's one in London and one in Milan because the Milan stock exchange used to be owned by the London stock Exchange. And these smaller, you know, stock exchanges have less liquidity, which in the end, that's at the core of kind of the the nonsensical valuation we believe. [13:02] Yeah. Hear you. What's the team size today? Only on b. [13:06] >> B right now, I think we're 53, 54, something like that. [13:10] How many about [13:11] How many engineers? [13:14] >> Product plus dev is about 30 people. Very, very product focused. [13:18] Yeah. Very heavy. Interesting. Any quota carrying sales reps? [13:23] >> We have I think now it's two or three that are in that, you know, kind of profile. [13:31] What's the quota? Like, million a year? [13:35] >> I don't remember, honestly. I have to ask our sales. [13:39] No. You're good. Good stuff, man. Let's let's wrap up here with the famous five. Number one, favorite book. [13:46] >> Oh, man. I just read the The Hate U Give and the other two books that that she wrote. Very, very nice trilogy. So I'll go with that. That was a that was a good book. [13:58] Number two, is there a CEO you're following or studying? [14:03] >> So one of my favorites, it's he's not the c a CEO, but Des Traynor at Intercom. Again, I'm a product person, and he's a fantastic product strategy person. One of my go tos. [14:13] Number three, what's your favorite online tool for building a business? [14:17] >> For building a business, let's see what we use a lot. I mean, we're using the Atlassian suite quite a bit. So, [14:30] >> Slack a lot. I don't have a very favorite tool to build to build a business though. Alright. [14:35] Married, single, kids, what's your situation? [14:38] >> I'm married with four kids. [14:41] Wow. How old are you? [14:41] >> They're they're between 30 Oh, and me. I'm almost 50. [14:48] >> Five zero. [14:49] Okay. And how many hours of sleep do get every night? [14:52] >> What's that? How much sleep do you get night? I'm trying to get more, man. I I think we're I'm between six and seven right now. [15:00] That's not bad. That's not bad. I can't believe you're 50, dude. You have the energy of, like you have it, like, my energy. It's great. What do you wish you knew when you were 20? [15:10] >> I mean, traveling. Traveling is that is is is awesome. It's one of the reasons why it's fun to work at a company that's headquartered in Italy. We just did a team retreat in Naples, which was fantastic. [15:21] Guys, there you have it. Beefree, they are look at they're a website builder, right? They're a website builder and other like WYSIWYG editor tools, but then a lot of their come the revenue comes from taking their tech and white labeling it to other providers who then pay them $600 per month on average. They have 600 white label partners. That's $360,000 in MRR. Another 10,000 SMBs paid them, sorry, 11,000 SMBs paid them directly, $25 a month for [15:43] a combined MRR of call it $635,000 a month. Over 7,000,000, they've said this publicly, over $7,000,000 in ARR growing over 50% year over year. Massimo, thank you for taking us to the top. [15:55] >> Talk to you soon, Nathan. [15:58] 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 one [16:23] p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two 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 do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's [16:44] an acquisition, a big 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 wanna 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 [17:06] saying. Sign up 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 [17:25] counter those people. We 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.