Brightmerge Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Daniel Schwab. He's the Founder and CEO of brightmerge, a leading data optimization platform for local renewable energy systems or microgrids. Daniel, you ready to take us to the top? [00:11] >> Go for it. [00:12] Alright. Tell us more about, about BrightSource sorry, about brightmerge. Who who's paying you for this technology? [00:19] >> We work with, energy companies, utilities, and real estate companies who are very aggressively pursuing a decarbonization program. [00:28] Mhmm. And ESG targets, that sort of stuff? [00:32] >> Yeah. And just capturing the value of renewable energy that is tremendous. That's one of the greatest economic opportunities of our age. And know, the economics are just so attractive now. It's not just about decarbonization and ESG. It's just super attractive. What we do is we we help people understand the real economic opportunity there so they can, you know, turbo boost the adoption of renewable energy. Mhmm. [00:58] Now you say this is an end to end SaaS platform for microgrid economic optimization. Who are some of the customers paying you and and how much are they paying you on average per month to use the technology? [01:08] >> So so we've we've worked with some a global real estate company. They typically will pay us per seat about $250 per seat per project. Typically, our clients will do dozens or hundreds we hope thousands of projects. So it's kind of a very scalable business model where you can start with one project, one seat and then expand from there. So, you know, we aim to start an average $10,000 to $15,000 a year and then grow from there, [01:38] >> go very quickly into the millions per per enterprise customer. [01:42] I understand. And are you guys pre revenue today or do you have a couple customers already? [01:46] >> So we have a few customers. They're more design partners and investors as well. So we've been working with two key customers for the last year and we're now expanding over the next 10 and as I say each one of them are doing big volumes so they'll expand the acquisition costs are relatively low. We can grow internally into the organization. [02:12] So Daniel, how many paying customers today? It sounds like three or four? [02:16] >> Yeah, yeah. So we're sort of doing just south of $10,000 ARR per customer. [02:26] Yep. Yeah. So four customers at, you know, a $10,000 ACV, I mean, would put you at like $4,000 or $5,000 a month right now in revenue. Is that about right? [02:33] >> Yep. It's a good ballpark. [02:36] And when did you start selling? [02:40] >> Six months ago. [02:41] So a year ago, you were at zero revenue, right? That's a good growth rate, 0 to $48,000 a year, [02:46] >> Yeah, I mean, I think, you know, what we did was we spent a lot of time building the product before and so, you know, there was a big waiting list, big customer interest in the product before we actually launched. [02:57] How big was the wait list? [02:59] >> So we've got around 50 customers waiting, ready to be onboarded. So we're probably onboard at the rate of about two a month. [03:07] And Daniel, when did you write the first line of code for Sorry? The [03:10] When did you write the first line of code for the platform? [03:13] >> So it's a pretty complex product. There's a simulation and optimization engine in the back end. So we've been doing this about two years. Yeah. And we've been funded by The US And Israeli Innovation Authority and the Department of Energy. So this is very much sort of big picture funding. [03:32] So how much was your first fundraise in what year? [03:35] >> We raised grant funding in 2020, we started 2020, Sorry. 2020 sorry. 2019. Early twenty nineteen, we raised about $450,000. Mhmm. [03:49] And what have you raised since? [03:52] >> Additional 550. So it was close on a million. [03:56] Mhmm. We Okay. So 550 was in 2020 or this year? [04:00] >> This year. [04:01] This year. Okay. And that you'd consider that what your seed round? [04:05] >> Well, it's kind of pre seed, early seed. [04:07] Yeah. Yeah. Got it. That makes sense. Now now help me understand, you mean, most people when they're doing the pre seed round, they're selling about 20% of the business. Is that about what you sold? [04:16] >> Yeah. It's a little less than that. But yeah. [04:19] Okay. Little less. Fair enough. Very cool. And so so that would put I mean, that would mean, you know, $3,000,000 to $4,000,000 valuation, something like that. [04:26] >> Bump it up a little bit more. [04:29] Fair enough. Alright. We'll call it 5,000,000. [04:30] >> Talking about today. [04:31] 5,000,000 valuation today. Fair enough. [04:33] >> Yeah. We're looking we're looking at a big jump since the the previous round. [04:41] Since the previous what? [04:43] >> Since the previous round. So I'm saying if you look at the valuation now, it's north of that. [04:49] North of 5,000,000? Yeah. Set by who? Is that what you believe it's worth or did someone invest at that price? [04:55] >> Well, we're having discussions now with different investors. [04:58] Oh, I see. So if you do raise right now, how much are you targeting to raise? [05:02] >> We're looking to raise another million now and then early next year, probably in the round of 6,000,000. [05:11] And why do you need a million today? [05:14] >> There's couple of features we wanna get into the product so that we can scale it much quicker. So there's some heavy R and D lifting that we needed to do. [05:26] And if you're at above a 5,000,000 valuation today, what was your valuation back in 2019 when you raised $450,000? [05:32] >> Close to $2.02 to 3. 2. [05:35] And that was a cap on the note. Right? [05:36] >> Yeah. [05:37] Yeah. Tell me more about the team today. How many folks? [05:40] >> So we've just grown to about eight now. We've got some data scientists, super smart algorithm developers, enterprise SaaS, really smart electrical engineering. So we have to have a really deep and integrated team of different skills. [05:56] Daniel, how many engineers total? [05:59] >> Five. [06:00] Five engineers. And what do the other four do or three do? [06:05] >> Sales, marketing, admin. [06:07] What's your target? You're doing $4,000 or $5,000 a month today in revenue. What do think you can hit in six months? [06:14] >> Well, I'd like to do next year total ARR $500,000. I mean, there's significant growth coming up. [06:24] And how do you get there? Is it expanding the number of seats and projects on the current four customers or adding brand new customers altogether? [06:31] >> We'll do both. We'll do both. [06:33] What do you think is gonna be more powerful driver of your growth? [06:38] >> Think expanding our existing customers, that'll be a much quicker ramp because it does the time for them to And for a customer to get comfortable with the product and see the value, it takes six months for that to happen. So the big growth of new customers will be seen at the end of next year. [06:56] How do you measure like the success folks have using you to hit their ESG goals? Is there like a number, tons of carbon removed from the atmosphere metric you can track through the platform or something like that? [07:06] >> Yeah, exactly. So we'll measure it at a very hyper local basis. So if it's an industrial zone, a commercial zone or a community, we can do that calculation sort of looking at a baseline, what they currently are, their energy carbon emissions and then what it will look like once they deploy new systems. [07:26] And how do you measure that? Take us into the tech a little bit. Is there a physical installation of something? [07:31] >> No, it's a data feed. So we've got the APIs connected to different systems, consumption profiles, weather data, tariff structures, [07:43] >> the energy content. So understanding if the energy content is coal, gas, nuclear, wind, solar, that each energy production system has a different carbon profile. So you have to really understand that specific carbon profile of that particular location. [08:02] Interesting. And so which of these product solutions? You've got dashboards, onboarding, feasibility reports, some other stuff. Which one right now is the number one sort of use case? [08:12] >> Yeah, I mean, we take people from conceptualization of the project. So they start collecting data on our platform through a questionnaire process. Then the analytics occur and then there's dashboards. It's currently very focused on the financials and we'll be layering on additional. Also the reliability is becoming more and more of an issue. So it's not just about carbon and economics, it's also how reliable is your energy. So think about the modern world, it's critical that you [08:41] >> have uptime twenty fourseven, 365. That's actually not happening even in places like California, Texas, New York in this hurricanes, fires, earthquakes, freezing. So it's really important for the customers to understand what is their predicted reliability of energy and they wanna make sure they have as reliable as possible, but they don't wanna pay a premium so we have to keep it optimized. [09:06] Understood, Daniel. We're rooting for you on that note. Let's wrap up here with the famous five. Number one, what's your favorite business book? [09:13] >> Favorite business book is Jack Welch. It's called The Winner. [09:19] >> Winner. [09:20] Number two, is there a CEO you're following or studying? [09:23] >> I'm a big fan of Elon Musk. There's nothing that beats him. [09:27] Number three, what's your favorite online tool for building the business? [09:33] >> We're using Slack. I think it's a great product to keep teams going especially in this world where we're doing a lot of remote work. [09:42] Number four, how many hours of sleep do get every night? [09:46] >> Oh, it varies between six and four, so. [09:49] Okay. Fair. And what's your situation? Married, single kids? [09:53] >> Seven kids, divorced. [09:55] Wow. Seven kiddos. Okay. Not married. And how old are you? 46. 46. Last question, something you wish you knew when you were 20. [10:06] >> That each day is special. Don't think too far ahead into the future. I was very much a forward thinker and perhaps that was a benefit at the time. But I think today it's about getting the most out of every day. [10:20] Guys, brightmerge is a platform that helps companies meet their ESG goals to build a better, cleaner world. They raised $450,000 pre seed at a 3,000,000 valuation in 2019, just raised $550,000 on another pre seed round, it called a 5 or 6,000,000 valuation. Looking at raising another million today to keep driving their growth. Four customers are onboarding these customers now doing $4,000 or $5,000 a month in revenue, hoping to scale a 500,000 run rate next year, team [10:41] of eight today as they look to continue to hire. Daniel, thanks for taking us to the top. [10:45] >> Thank you very much, Nathan. Have a great one. [10:49] 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. 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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 [11:58] 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 [12:18] 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.