How BRITech Global Reached $9.8M ARR with 350 Customers and 128% Net Dollar Retention (Interview with CEO Yuryi Ferber)

Host Introduction and Yuryi Ferber's Background

Nathan Latka

00:00Hey, folks. My guest today is Yuryi Ferber. He's a successful entrepreneur with a twenty year track record, was previously CEO and founder of YMF, a leading financial software company with 300 employees that was later sold to TOTVS. He's a well respected authority in the Brazilian technology sector and is often called upon to advise firms and individuals on IT best practices and solutions. Before founding YMF, Yuryi spent eight years in investment bank Garantia as a trader and

00:25portfolio manager, now building BRITech Global, a B2B SaaS platform for investment managers. Yuryi, are you ready

00:32to take us to the top?

Who BRITech Serves: Investment Management Software

Yuryi Ferber

00:33>> Yes, let's do it.

Nathan Latka

00:35All right. So what kind of investment managers are paying you?

Yuryi Ferber

00:40>> So we are a provider, a software provider for the investment management players, right? We are not an investment manager as ourselves, but we provide technology for almost all the chains of the investment management ecosystem.

Average Contract Value and Customer Count

Nathan Latka

00:59That makes sense, and give me a sense of what these investment managers are paying you each month to use your software.

Yuryi Ferber

01:06>> Our ACV is, let me give you in dollars, it's currently is like

01:14>> $28,000 a year.

Nathan Latka

01:16Okay, and how many customers are you working with?

Yuryi Ferber

01:19>> Over three fifty.

ARR, Growth Rate, and Prior Year Comparison

Nathan Latka

01:22Three fifty customers. Okay. Now, and can I take three fifty times 28,000, you're doing about 9,800,000 in ARR?

Yuryi Ferber

01:30>> That's it.

Nathan Latka

01:32And where were you about a year ago, just so we can calculate growth?

Yuryi Ferber

01:36>> 70%. 70%.

Nathan Latka

01:37So you're doing about 7,000,000 in ARR. Where did most of the growth come from? How are you getting customers?

Upsell Model: Use Cases and Portfolio-Based Pricing

Yuryi Ferber

01:43>> Yes, we have on average 20%

01:49>> upsells in the base and the rest comes from new clients.

Nathan Latka

01:54Okay, got it. Are you upselling? Is it number of seats, a feature set, a utility based upsell? What is it?

Yuryi Ferber

02:01>> In our SaaS platform, we have over 30 features or 30 use cases. So what we do is constantly sell new use cases. We are not driven by number of users or seats, we are driven by number of use cases and number of portfolios, investment portfolios, our clients control with our technology.

New Entrant Pricing: AUM-Based Fee Option

Nathan Latka

02:28Okay, that makes sense. Now, do you ever consider, since you are so close to their AUM or their assets under management, would you ever take a percent of the AUM or no?

Yuryi Ferber

02:38>> We

02:42>> do it, but only for new entrants just to make easier for them to use us. So it's like five bps and because they are new entrants, the AUM is not big. So it allowed them to start using our technology And of course, after time we grow organically with them.

Nathan Latka

03:07So Yuryi, you'll let new investment managers avoid paying you a $30,000 a year fee and instead pay 0% of their, 0.05% of their AUM.

Yuryi Ferber

03:18>> Yeah, that's five bps. So 0.05% of a year of their AUM.

Nathan Latka

03:24Yep. And how much AUM do these new entrants have on your platform right now?

Yuryi Ferber

03:28>> It's like $1,020,000,000. So in dollars, it's like $2.03, $5,000,000 in AUM, the new entrants only.

Nathan Latka

03:39Got it.

Yuryi Ferber

03:40>> Of course. So I told you we have like $28,000 as our ACV on average, but of course we have guys paying us like

03:53>> what? I have the numbers in Brazilian reais. So

03:58>> like 5,000 per year up to what? Let me see.

04:08>> Like to 300,000 per year.

Nathan Latka

04:11So your highest ACV account is $300,000 a year?

Yuryi Ferber

04:13>> Yeah, yeah, yeah.

Nathan Latka

04:14Okay, got it. And the growth has been great. You're at about a $10,000,000 run rate today, from 7,000,000 about a year ago. And I believe you told me last time in 2018, you finished with about a $5,500,000 run rate, correct?

Yuryi Ferber

04:25>> Yeah, correct.

Nathan Latka

04:27Just so people have context, when did you launch?

Company Origins: Acquisitions and Bootstrapped Growth

Yuryi Ferber

04:30>> We started the business in 2014.

04:35>> '20 the next year,

04:38>> we started the business with our first acquisition, and the second acquisition came one year later. So the company was bootstrapped with the two acquisitions at that time, and on top of those acquisitions, we grew the company so far. It's like a 20 fold revenue growth in six years.

Nathan Latka

05:01How big was the initial acquisition? How much did you have to pay for it?

Yuryi Ferber

05:04>> Very small, like in dollars, it was like

05:09>> $600,000 both.

Nathan Latka

05:11Okay. Where did you get the $600,000 in 2014 to do that acquisition?

Yuryi Ferber

05:16>> The first acquisition, my money. The second, it was a venture capital fund that invested in us back in early twenty fifteen.

Seed Round: $3M Raised in 2015

Nathan Latka

05:27And what was the size of that round, do you remember?

Yuryi Ferber

05:29>> $3,000,000

Nathan Latka

05:32$3,000,000 What valuation did you negotiate?

Yuryi Ferber

05:35>> It's like a six times ARR.

Nathan Latka

05:38Which was what back then?

05:41You know?

Yuryi Ferber

05:43>> I don't know these numbers on my mind, so you can make the calculation, but it was like so just to make easier, they got like 34% of our equity with them.

Nathan Latka

05:57Okay, got it. Yeah, so you raised at a 6,000,000 pre money and 9,000,000 post, something like that.

Yuryi Ferber

06:02>> Yeah.

Nathan Latka

06:03Okay. And have you raised any capital since then or no?

Organic Growth Since 2015 and New $50M Raise

Yuryi Ferber

06:06>> No, no organic growth since then, six years. But the news is that we are raising a second capitalization round right now.

Nathan Latka

06:16How much are you looking to raise?

Yuryi Ferber

06:18>> $50,000,000 five-zero million?

Nathan Latka

06:21Yeah. What valuation are you targeting?

Yuryi Ferber

06:24>> We are targeting eight

06:28>> times ARR.

Nathan Latka

06:30So 80,000,000 pre money or post?

Yuryi Ferber

06:35>> Eight times, so it's like 80,000,000 pre money.

Nathan Latka

06:3980,000,000 pre money, which would be 130 post? Yeah. So you'd be selling again about a little more than 30% of the business.

Yuryi Ferber

06:48>> Yeah.

Nathan Latka

06:48Okay. How do you think about dilution? Is any of that going be secondary?

Yuryi Ferber

06:53>> No, no secondary. So it's

06:57>> just for acquisition. So again, we started the company with two acquisitions, six years running organically, and now we restarted the acquisition plan.

07:11>> By the way, we are running our third acquisition at this moment. We expect to have the closing early October, and we have like three or four more to be done with that money.

Team Size, Engineers, and Sales Force

Nathan Latka

07:26Tell me about the team today. How many people on the team?

Yuryi Ferber

07:30>> Before the third acquisition, we're talking about 120 people.

Nathan Latka

07:35How many engineers?

Yuryi Ferber

07:38>> Like

07:40>> thirty, thirty five engineers.

Nathan Latka

07:42Are they all down there near your Brazil office or are they outsourced?

Yuryi Ferber

07:47>> Brazil.

Nathan Latka

07:48I see. And any sales reps that carry a quota?

Yuryi Ferber

07:51>> Yeah. So the biggest part of our investment is in growth. So we have like 40% of the revenues being invested in growth.

Nathan Latka

08:05How many sales reps do you have on the team that carry a quota?

Yuryi Ferber

08:08>> It's like

08:11>> around thirty, thirty five sales guys, sales force, including inbound, outbound, marketing, everyone.

Nathan Latka

08:20How many total? Sorry.

Yuryi Ferber

08:22>> 35.

Nathan Latka

08:2335. Okay. But of that sales team, how many actually carry a quota that they have to hit?

Yuryi Ferber

08:30>> 20 guys.

08:31>> 20. Okay.

Sales Commission Structure and Quota

Nathan Latka

08:32What is their quota? A lot of people struggle with launching their sales plans like structure it?

Yuryi Ferber

08:38>> So,

08:42>> have a combination of

08:45>> fixed salary plus a very, very aggressive sales commission. So that's how we are growing like 70% a year with that aggressive commission, sales commission.

Nathan Latka

09:03What's aggressive?

Yuryi Ferber

09:05>> It

09:07>> can be like three times their

09:12>> fixed salary.

Nathan Latka

09:13Which is what?

Yuryi Ferber

09:15>> Which is like $2,000

09:20>> a month.

Nathan Latka

09:21So you pay them $24,000 per year fixed, and then they have to go sell about $60,000, $72,000 of new ARR per year to hit quota?

Yuryi Ferber

09:31>> That's it. So payback is less than eight months.

Nathan Latka

09:35If they hit their quota, do you pay them more? What's the commission?

Yuryi Ferber

09:39>> It's just a little bit more. It's like a 20% more.

09:46>> It's a premium, a 20% premium over the sales commission.

Nathan Latka

09:50Got it. So if they hit their target quota of $72,000 of new ARR in a year, in addition to their $24,000 base, you'll pay them an additional 20% or approximately $4,000 So their full on target earnings is about $30,000

Yuryi Ferber

10:07>> That's it.

Nathan Latka

10:08Okay. Is that model working? Can you hire another 20 sales reps on that same quota and keep growing?

Yuryi Ferber

10:12>> It's working. It's working. By the way, we have sales guys everywhere, not only in Brazil.

Nathan Latka

10:20Where are they based?

Yuryi Ferber

10:22>> Everywhere. We have sales guys in Brazil, we have in the rest of LATAM, we have in The US, and we have in other countries in Europe.

Nathan Latka

10:31How did you convince a US salesperson to work on just a $24,000 fixed It's annual average.

Yuryi Ferber

10:36>> In The US it's different.

Nathan Latka

10:39I see, I see. Okay, that makes sense.

Yuryi Ferber

10:42>> This is like the LATAM cost of sales guys.

Profitability Since 2018 and EBITDA Margin

Nathan Latka

10:47Yep. With your $9,000,000 right now in terms of ARR, almost 10,000,000, are you profitable?

Yuryi Ferber

10:53>> Yes, we are profitable since 2018.

Nathan Latka

10:56How profitable?

Yuryi Ferber

10:59>> Like 15% EBITDA.

Nathan Latka

11:0315% EBITDA, so you'll take 1,500,000 to the bottom line this year, something like that.

Yuryi Ferber

11:09>> This year we are going to have like,

11:14>> that's it in dollars. That's it. That's it.

Acquisition Strategy and Inorganic Growth Plans

Nathan Latka

11:16And so Yuryi, why go sell 30% of your business to raise $50,000,000 if you're profitable? Do you just really want to go do some acquisitions?

Yuryi Ferber

11:24>> Yes, acquisitions. Acquisition is part of our growth strategy from now on. So what is this strategy? Keep growing organically 70% per year and add like 35% inorganic growth. So the idea is to double the business every year from now on.

Nathan Latka

11:46And what kinds of companies would you go buy? Would these be like consultants that work with investment firms?

Yuryi Ferber

11:52>> No, we are buying product companies in the same space we are working, but they complement our product portfolio. We don't want to buy more of the same. We are adding other companies that complement and create synergies between the customer basis, cross sell, product cross sell. That's our investment acquisition strategy.

Net Dollar Retention and Gross Churn

Nathan Latka

12:19Okay. And when you look at your net dollar retention annually, what is that at?

Yuryi Ferber

12:25>> Now it's like 128%.

Nathan Latka

12:28Okay. 128. And how much of that is churn that you have to make up?

Yuryi Ferber

12:34>> Yeah.

12:35>> The churn is already in that number, you know.

Nathan Latka

12:38Break it down though for me, what is gross churn?

Yuryi Ferber

12:41>> Gross churn is like 4% per year, we retain

12:48>> 128. So it's like a one hundred thirty two minus four takes us to 128.

Nathan Latka

12:54Yep, that makes a lot of sense. Is there room to drive your net dollar retention higher than 128 or do you think you're capped out?

Yuryi Ferber

13:01>> Our goal for this metric is to sustain in hundred thirty. We didn't reach 130 yet, but we believe maybe by the end of the year we can reach 130.

Nathan Latka

13:16Yep, I got it. And before we wrap up here, talk to me about your current cap table. How much equity do you still own?

Cap Table: Founder Equity and Seed Investors

Yuryi Ferber

13:22>> I own like 66%.

Nathan Latka

13:2566%. And then your seed investors from 2015, they own what, 30, 34%. Okay, so it's just you two on the cap table.

Yuryi Ferber

13:34>> 34% is our holding company. I have the majority stake of the holding company, and I have other six or seven executives that run the business with me. They have a minority equity at the holding company. So it's like 80% of the 66 is mine, the rest is distributed with

14:02>> the executives.

Nathan Latka

14:03Got it. So about 12% of BRITech Global is your executives, then about 54% is you and then 34% is your seed.

Yuryi Ferber

14:11>> Yeah.

Nathan Latka

14:12I see. Okay. And is everybody on board with taking dilution with this new $50,000,000 raise? And if so, how'd you convince that executive team to take that dilution?

Yuryi Ferber

14:25>> Because they understand the plan, they understand that it makes a lot of sense for us to be diluted. And again, part of the money is debt, not equity. So the dilution is lower than the-

Nathan Latka

14:42How much debt will be of the 50,000,000?

Yuryi Ferber

14:44>> It's like 20% debt, 80% equity.

Nathan Latka

14:49Got it. So you're gonna have 10,000,000 be debt, 40,000,000 of the equity.

Yuryi Ferber

14:55>> Yeah.

Nathan Latka

14:56Do you have a debt partner lined up already or no, you're still looking?

Yuryi Ferber

14:59>> No. Oh yes, we already have a binding offer to a term sheet with a local

15:07>> venture debt provider here in Brazil.

Nathan Latka

15:11Are there warrants included?

Yuryi Ferber

15:14>> No.

Nathan Latka

15:15What's the interest rate?

Yuryi Ferber

15:17>> Oh, you are curious. It's a good business. You are going to find out.

15:25>> It's like 18% a year.

Nathan Latka

15:29Holy cow. Why don't you go try to find cheaper capital? I think you can definitely find cheaper than 18%.

Yuryi Ferber

15:36>> Not in Brazil.

Nathan Latka

15:38Okay. I'll follow-up with you after this. We'll chat. Have you already signed that term sheet? Is it binding?

Yuryi Ferber

15:44>> I'm about to sign it.

Nathan Latka

15:45Okay. Wait. We'll chat right when I finish recording. Yuryi, on that note, let's wrap up with a famous five. Number one, what's your favorite business book?

Yuryi Ferber

15:53>> I have a lot of favorite, but the last book I read and I love it is The Founder's Mentality.

Nathan Latka

16:01Number two, is there a CEO you're following or studying?

Yuryi Ferber

16:04>> Not nowadays.

Nathan Latka

16:06Number three, what's your favorite online tool for building the business?

Yuryi Ferber

16:10>> Nowadays, I love because I don't have a secretary or assistant, so I love Calendly.

16:19>> Calendly.

Nathan Latka

16:20Number four, how many hours of sleep do get every night?

Yuryi Ferber

16:25>> Seven, eight hours per night.

Nathan Latka

16:26And what's your situation? Married, single kids?

Yuryi Ferber

16:30>> Married, three kids. They are not kids anymore, but married, three kids.

Nathan Latka

16:35And Yuryi, how old are you?

Yuryi Ferber

16:37>> I'm 57.

Nathan Latka

16:3857, last question. Something you wish you knew when you were 20.

Yuryi Ferber

16:43>> The same question you asked me, I have the same answer. I would love to learn more about SaaS twenty years ago.

Nathan Latka

16:52Guys, there you have it, BRITech. Global. They sell SaaS to investment managers. They have just almost 5,000,000,000 in AUM just on early and new funds. Have a lot more than that on their other funds. They work with three fifty fund managers right now. They're about to break $10,000,000 in terms of ARR run rate, up from 7,000,000 just a year ago and up from 5,500,000 back in 2018. They are profitable. They've managed to drive 10,000,000 ARR, raising

17:17just 3,000,000 on a 6,000,000 pre back in 2015. Now looking at raising 40,000,000 in equity and 10,000,000 in debt at around an $80,000,000 pre money valuation. We'll see what happens. Yuryi, thanks for taking us to the top.

Yuryi Ferber

17:28>> Thank you very much. Thank you, Nathan.

Nathan Latka

17:32One 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

17:57p. 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

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