How Celitech Signed 8 eSIM Customers and Went Live in 50 Countries by 2021 (Interview with Founder and CEO Ahmad Fares)

Introduction and Guest Background

Nathan Latka

00:00Hey, folks. My guest today is Al Fares. He's the co previously co founder of acsis.com. Over $10,000,000 in ARR now. The Founder and CEO of celitech, an eSIM platform helping travel companies. Al, you ready to take us to the top?

Ahmad (Al) Fares

00:14>> Sure.

What Is eSIM Technology

Nathan Latka

00:15All right. What does eSIM mean?

Ahmad (Al) Fares

00:17>> So eSIM is an embedded SIM card inside recent devices starting with the iPhone XR XS in 2018. It helps, you know, users, know, smartphone users to connect to wireless networks using QR codes.

Celitech's B2B Business Model

Nathan Latka

00:33I see. So who's paying for the technology? Who's paying you?

Ahmad (Al) Fares

00:38>> So you have it You have it like Bluetooth as a built in feature inside your phone, and that feature will enable you to get wireless plans from service providers using QR codes. So you pay for the plan you buy, but instead of going to a shop to get a SIM card, now you get wireless plan as a QR code by email or online or through an app.

Nathan Latka

01:02So your consumers are paying you, it's not a B2B business?

Ahmad (Al) Fares

01:05>> No, we're a B2B business.

Nathan Latka

01:08Who's the business that's paying you?

Ahmad (Al) Fares

01:10>> Yeah, so

01:12>> so I was just talking about eSIM as a technology, as a feature, but yeah, at celitech we're a B2B platform helping travel companies like Expedia and JTB to offer their travelers co branded international cellular data plans using one click eSIM technology. The basic idea is while you're booking your flight or hotel online, you'll be able to bundle eSIM at checkout with one click mark. You add an eSIM to your flight or a trip, and then you

01:45>> get it as a QR code by email.

Revenue Mix: Per-Trip vs Subscription

Nathan Latka

01:47I see. So what would, like what's the average customer pay you per month to use the celitech technology?

Ahmad (Al) Fares

01:53>> So, average, the plan, the eSIM cost per trip is around 15 to $20 but our partners pay us, you know, for that eSIM on top of a subscription fee because we help them brand the eSIM. So in case you want to have your brand as a network name to enable your, you know, to keep your brand on the mind of your traveler in destination, we do that under a subscription model.

Revenue: Declines to Share Numbers, Says Q3 Doubled

Nathan Latka

02:20So of your last twelve months revenue, Al, how much came from the SaaS model versus Expedia paying you a percentage of the 20 per trip?

Ahmad (Al) Fares

02:29>> We, at the moment,

02:32>> don't have, you know, we don't share this data because I mean, we just introduced the subscription model last month. So it started, it's starting now actually.

Nathan Latka

02:42Oh, got it. Okay, got it. You're just now getting well. So are you just now turning on revenue or did you have the per trip pricing last year?

Ahmad (Al) Fares

02:49>> So we within this year, we had some customers. We managed to double our revenue in Q3 and now we're expecting to quadruple it and probably in Q4, in Q1, we should be doubling maybe every month.

Nathan Latka

03:03Well, on. I'm not an idiot here. I mean, it's easy to double from a dollar to $3 and call it 300% growth. Don't try that shit on me. When did you launch the company? What year?

Company Launch Timeline

Ahmad (Al) Fares

03:14>> So I launched the company. I started celitech in 2018, but we launched the API last year, late last year. Okay. So, we basically took it live in January and, you know, definitely we were affected by COVID because we'd focus on international travel. But given now The US is opening up in next month, we started seeing, you know, traction going back on track.

No Revenue in 2020: Building a Patented, Serverless Platform

Nathan Latka

03:40Okay, okay. So you had no revenue then in 2020 during COVID?

Ahmad (Al) Fares

03:45>> Yeah, we had no revenue in 2020. We were building the platform. Obviously, it's a very technical platform. It's a patented platform. So we pioneered the concept of a programmable eSIM that can be programmed to fit any trip. So we have IP in The US, Europe and China, and we built it all on a serverless cloud. So we're totally serverless. We don't have any hardware, even in our back end, it's totally cloud based, totally serverless.

Nathan Latka

04:10And tell me more about

Funding: Personal Investment and Angel Round

Nathan Latka

04:14like how you fund the business? It sounds expensive. Did you bootstrap or raise some capital?

Ahmad (Al) Fares

04:17>> So I invested around $500,000 in the business and I raised another 400,000 from few friends, angels. So it's, I mean, it's boot strapped, but we're currently raising a seed round of 1,500,000. And we're also shortlisted for a major grant by the National Science Foundation Seed Fund.

Valuation and Seed Round

Nathan Latka

04:41Sorry, you're raising 2,000,000 right now?

Ahmad (Al) Fares

04:44>> Yeah, 1,500,000.

Nathan Latka

04:461.5. And what sort of valuation do you think you'll target?

Ahmad (Al) Fares

04:49>> So

04:52>> pre of 7,000,000, post 8.5.

Nathan Latka

04:56Why is that the right amount?

Ahmad (Al) Fares

04:58>> Well, because we we've built a platform, we have customers, have two major, you know, we have signed, you know, OTAs that are ready to go live in Q1 and one of them can take us to 20,000,000 ARR. We've proven the model with many smaller players. We're live with many apps. You can find

Nathan Latka

05:24us And how many customers today, Al?

Customers and Key Partners

Ahmad (Al) Fares

05:25>> So we have now around eight customers between apps and OTAs.

Nathan Latka

05:30And these are like Expedia, people like that?

Ahmad (Al) Fares

05:32>> JTB, you know, another OTA from Japan, a big one. And we have the smaller players. We have fintech players like Digital Wallet called Ariba in The Middle East. We're currently live in 50 countries and we're adding another 100 by the year end. So we should be in around 150 countries in Q1.

Nathan Latka

05:53How many, but that's all like, you could be in 150 countries and no one uses you, right? So like in September, how many trips did you upsell? Like how many eSIM trips got paid for using your technology?

Ahmad (Al) Fares

06:06>> At the moment, we don't share this information, but I can tell you it's growing fast.

Nathan Latka

06:12Well, of course, because you're going from nothing to something. Can you give me a range? Are we talking like five trips or like 5,000?

Ahmad (Al) Fares

06:19>> Yeah, I mean, not 5,000, probably a couple of, maybe a thousand probably.

Nathan Latka

06:24Okay, got it. Hundreds then, you're sure in the hundreds. Yep. And what enables you to grow that really fast? Is it expanding with the same eight partners or adding new partners altogether?

Growth Levers: Countries and OTA Pipeline

Ahmad (Al) Fares

06:35>> So first of all, the countries is important because if you're an international travel platform, you want more countries, right? To be able to cover all your routes and to be able to focus on the routes that are recovering faster than others. Because, you know, in Asia now it's recovering, the international travel is recovering, The US now is opening up, Europe is also opening up. So that helped with the growth. But in general, what we've built is

07:03>> exactly, you know, tailored towards the OTAs. So we have in our pipeline all the major OTAs that control probably over 80% of the market. Booking.com is one of them. So, know, within next year, we expect to sign more of these OTAs and even hotel groups, we also have big names in the pipeline. So, part of loyalty programs, for example, we can have the eSIM as a perk.

Nathan Latka

07:30Got it. Are you going into this? Were you sole founder? You funded it with your own money. Do you own 100% today?

Founder Ownership and Cap Table

Ahmad (Al) Fares

07:37>> I mean, for the time being, I'm 100% on it. I have a co founder who is a CTO and he has

07:46>> an amount invested in the company as a convertible note.

Nathan Latka

07:52On a fully diluted basis. I'm talking fully diluted. How much would you own?

Ahmad (Al) Fares

07:56>> I would be probably at 75%.

Nathan Latka

07:59Okay. Then your co founder, your CTO owns 20. Well, you have investors too, right?

Ahmad (Al) Fares

08:03>> Yeah. So probably 10 plus 15.

Nathan Latka

08:06I see. I see. Okay, cool. Owns 10 there. Got it. And then so you're raising now, so at 1.5 on 5.5 pre or sorry, seven pre, 8.5 post. Do you think you can get that valuation in the market?

Ahmad (Al) Fares

08:18>> Oh yeah, at least. Mean,

Nathan Latka

08:23Why do

Ahmad (Al) Fares

08:23>> you say that so confidently though?

Nathan Latka

08:24I mean, you're under, I mean, from what I can tell you're under $20,000 a month in revenue. What gives you the confidence you can go raise at a $7.8000000 valuation?

Ahmad (Al) Fares

08:31>> Yeah, because I, you know, I have in the pipeline,

08:36>> the 100 ARR or MRR, you know, I will- Why not go close it then?

Nathan Latka

08:42Why not close that first? Why not fund with your customers?

Ahmad (Al) Fares

08:45>> Well, because I, you know, we expect, you know, international travel to fully recover next year. So I still need some, you know, runway to be able to get to that point. If we didn't have the, if we didn't have COVID, I would be at series A, probably series B at the moment. But yeah, COVID gave us lemon and we're making some lemonade out of it.

Exiting Acsys, His Prior Company

Nathan Latka

09:05Did you, what happened to Axis? Did you sell it?

Ahmad (Al) Fares

09:08>> Axis, Axis. So I exited Axis in 2017. I, you know, we had, I had an exit from a publicly listed company in Europe called Dormakaba. My partners prefer not to sell because they didn't like the valuation at that point in time.

Nathan Latka

09:25Wait, is this for Axis?

Ahmad (Al) Fares

09:27>> Yeah, this is for Axis. I exited partially. So, you know, got some money out of that and I still

Nathan Latka

09:34How much did you make from that?

Ahmad (Al) Fares

09:38>> Total of probably a couple of millions.

Nathan Latka

09:40Okay. So then that's how you had the $500,000 to invest in this business? Yeah. I see. I see. Okay. Cool. Talk to me about your team today. How many folks?

Team Size and Hiring Plans

Ahmad (Al) Fares

09:48>> So we're totally nine folks. Five full time and four part time.

Nathan Latka

09:56How many engineers?

Ahmad (Al) Fares

09:58>> We're all engineers. Nice. Maybe Very maybe one or two are not. But yeah, we definitely looking to hire more sales. We hired we had our first sales rep in Honolulu, given Hawaii is a strategic market, but I expect to hire a senior sales executive at some point. And that's part of the seed.

Famous Five Rapid Fire

Nathan Latka

10:19All right, let's wrap up with the famous five. Number one, favorite book.

Ahmad (Al) Fares

10:23>> Favorite book, Zero to One.

Nathan Latka

10:25Number two, is there a CEO you're following or studying?

Ahmad (Al) Fares

10:30>> Elon Musk.

Nathan Latka

10:31Number three, what's your favorite online tool for building celitech?

Ahmad (Al) Fares

10:35>> AWS.

Nathan Latka

10:36And

10:38how many hours of sleep do get every night?

Ahmad (Al) Fares

10:41>> Five to six.

Nathan Latka

10:42Situation? Married, single, kids?

Ahmad (Al) Fares

10:45>> Single, one kid. The second kid is celitech.

Nathan Latka

10:49Very cool. And how old are you Al?

Ahmad (Al) Fares

10:51>> 38.

10:52>> 38. Last question.

Closing Reflections

Nathan Latka

10:54Something you wish you knew when you were 20.

Ahmad (Al) Fares

11:00>> I wish I knew when I was 20. Okay. I think that building stuff is not as hard as as you think.

Nathan Latka

11:10Guys, there you have it. Exited his first company, plowed $500,000 of it into his new business, celitech. They help travel companies like Expedia offer eSIM cards to their travelers. One click upsell process, $20 a trip. They're processing caught hundreds of those trips per month. Eight of these providers on the system right now raised 400,000 seed last year, targeting a $1,500,000 raise at a 7,000,000 pre money valuation. Today, as they look to scale, nine people on the

11:33team, mostly engineers. We'll see what happens next. Al, thanks for taking us to the top.

Ahmad (Al) Fares

11:38>> Thank you, man.

Nathan Latka

11:40One 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

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12:48are 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

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Ahmad (Al) Fares

13:16>> See you.