How Carbide Security CEO Darren Gallop grew Carbide Security to $3.2M revenue and 190 customers in 2024.

guys 2007 he launched a tool for music festival to manage their events in Canada called Marcato by 2014 he was counting customers like Bonnaroo and Coachella ultimately grew it into 2018 to 2 million bucks in aor profitable basically boots chapter of 14 people sold it for a five to ten X multiple and then got into carbide because he was frustrated with all the security protocols he had to do at his first company Marcato now today carbide has raised a seed sorry a pre-seed a seed most recently that seed was in 2021 they broke 500k of AR at that time raised 4.1 million today over 2 million in ARR targeting 3 million by end of Q3 and 4 million by the end of the year already serving 190 customers helping them do things like sock 2 compliance get expertise in the cyberspace along with three very powerful feature sets and featured tiers hey folks my guest today is Darren Gallup he's the co-founder and CEO of carbide a cyber security firm that provides businesses of all sizes with the tools they need to adopt a strong cyber security and privacy posture enabling them to protect their data from cyber criminals transform security from potential liability to competitive advantage and accelerate their growth Darren you ready to take it to the top I'm ready to do it let's go all right let's rock and roll here so first things first can you give a story of maybe a customer that uses you today and and how they use you their specific use case yeah I you know I'd say the majority of our customers have have pretty similar use cases and usually what it is is they're selling a product a lot of times it's the SAS software's a service type product they have some degree of confidential information maybe it's personally identifiable information Healthcare information financial information which are pretty common uh classes and um they're selling to government they're selling to Enterprise and they're being required to comply with a variety of cyber security best practices standards and Frameworks they may need uh something like a sock 2 audit or an ISO 27001 audit and more so nowadays we're seeing on top of those requirements they're getting requested to comply with various different data privacy regulations things that are in Europe like the big ones like Europe's gdpr but also we're seeing a lot of these state-based privacy acts coming up and that's that's really what customers are using this for they're coming in they don't have a sophisticated Enterprise grade security program in their SMB and they're using our platform forum and their resources within that platform to build and to manage that program and then effectively report that and demonstrate trust to their customers so just to be clear I mean there's companies like vanta obviously that help with stock two compliances sort of easy but that's like all they do is that why you guys are competing against or are you sort of more more vertically integrated SAS now I would say that in you know we definitely do end up competing with vanta and the sock 2 example uh where we generally focus our energy and where we have more uh you know success with customers is when their their needs are more complex than just simply getting a very fast and dirty audit uh for sock two uh it's when they have more multi-compliant environments or they're just being they're being required to do more above and beyond uh the Simplicity of a sock 2 for example okay and so with all that in mind I sort of think of you as an Enterprise version of vanta based on what you just said what's the average customer paying you per month or per year to use your technology yeah it ranges anywhere from 7 500 to about thirty thousand dollars we do have an inter Enterprise grade package that can that can climb north of that substantially but we're still working primarily with snds like we have a lot of customers that are as small as 20 30 40 employees we have you know I'd say the bulk of them are probably more like 100 150 250 that's where we see a lot of a lot more but we have tons of smaller customers it's just because of the nature and complexity of what they're doing and the types of customers they have they need something more complex they need something more rounded in their in their security program what are the pricing axes that you're upselling against is it number you just mentioned ftes is it feature-based upselling or some utility-based upsell there's a little bit of both so there's definitely a feature there's like three tiers when it comes to Features there's also a a layer that we can put on top of our plans that provides expertise so a heightened degree of expertise I'm not talking about just Standard customer success people but having access to information security data privacy expertise running workshops some upskilling to your team that is a a premium feature but yeah it we do have our tiers that they're feature based and then for our more our larger businesses we do have a per customer sort of buckets um that that sort of get involved we do our when we do deals with companies that are say four or five hundred six hundred employees they're paying a little bit more because of the volume of people and that are integrating with the and interacting with the tools didn't hear you say anything that was necessarily utility based up so I heard three feature buckets they can pay for services in the form of experts heightened expertise and then lastly you said three four five hundred employees so just to be clear is there any numerical based upsell that is not a seed base for example number of API calls per month number of reports done per quarter anything like that yeah I mean now that we're starting to launch a lot of stuff that's integrating with with AI um there are some thresholds that are bucket into those tiers right now I expect there'll be some more stuff like what you're referring to as we launch more and more of our AI based features because there are sort of per quota token costs associated with that so I would expect that we'll start rolling up more of that type of stuff as we start rolling out more of our AI based features over the coming months oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret evaluation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when I hover over here here right so the teal is what a VC would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview okay and Darren give me more of the back story here what use your lunch company yes it's pretty fascinating um my my background is actually in music I used to be a professional musician in my 20s and then I started a record label and then that uh that kind of was a bit of a tough go in 2007 so I started my first SAS company which was a back-end Logistics management platform for music festivals and cultural events and we started off with a lot of smaller towns sort of you know Canadian events and then eventually we ended up working with some of the biggest music festivals in the world so by 2014 2015 we were the we were the back end tools for Bonnaroo Coachella burning man just for laughs Festival X Games like just a pile of really massive events in several different countries 2014 revenue on that music business that music SAS business uh Revenue at that business we saw that business in 2018 it was it was just over 2 millionaire um right yeah okay so from...