CerebrumX Revenue, Valuation & Funding (2024)

[00:00] Guys, they charge insurance companies, aftermarket companies, and and, you know, connected fleet companies anywhere between 70,000 and $100,000 per year. Seven customers today, they just started selling five months ago, already at a 600,000 run rate. I think the end of twenty twenty two at a $1,200,000 run rate. They're basically giving all the speed data, acceleration data from your car back to GEICO. So GEICO knows how to price your insurance. Right? Or so you can get a [00:25] cheaper rate. That's sort of a a good example there. They raised a 5,500,000 series a last year, sold between, call it, 10-20% of the business doing that. Team of 36 today, they control their burn, which is net burn a $150,000 per month right now by having their engineering team in India. They've got plenty of runway, though, to continue to drive growth. Hey, folks. My guest today is Sandip Ranjhan. He's the CEO and cofounder of cerebrumx, a [00:46] company that focuses on unlocking the value of con the connected vehicle. Before joining the company, served as the SVP and GM of automotive service business unit at Harman International, leading the connected automotive cloud aftermarket OTA and cybersecurity businesses. Over the twenty eight years of experience in the automotive and communication industry, he has extensive experience in creating and successfully launching secure cloud based IoT services that enhance the experience and contribute to sustainability aspects. Sandip, you ready to [01:12] take us to the top? [01:13] >> Hey. Same. Nathan out here. Likewise. [01:16] Alright. Very cool. Wait. I wanna make sure people don't get lost. Right? Cerebrumx.ai is an AI powered connected vehicle data platform. What does that mean? [01:24] >> So what we do is when we get the data from the vehicle, we process this in the cloud and then there is a machine learning platform which really turns out information out of the data. So for example, driving behavior. Right? So so a lot of the machine learning goes into it, looking and analyzing the previous data to come up with some kind of a model with scores, which provides more insights, and which is continuously learning. Right? [01:52] >> That that whole model is continuously learning. [01:54] How do you get the ability to collect the data from the car in the first place? Are you working directly with Ford and they put you in every truck? [01:59] >> Yeah. So we work with the top four OEMs minus GM right now in North America. So we [02:05] You said the top the top five minus GM? [02:08] >> Minus GM. Right? [02:09] And So who are those four? Name name the other ones. [02:12] >> Yeah. So you you can you can guess it. Right? Out out of the five in terms of the sales. Right? So minus GM, all the four. Right? [02:20] And and Sandip, sorry. My audience doesn't necessarily know the car market like you know the market. Are you not able to talk about [02:26] >> For the other example, Ford, you have Stellantis, Nissan, and then we talk about the Toyota of the world. Okay. [02:36] So, yeah. So walk me through. I've just bought a Ford truck from the dealership yesterday. Is your software automatically installed in that Ford truck? [02:43] >> No. We don't. So we don't collect the data without your consent. Right? Nothing works without your consent. Right? So, typically, what happens is that, say that you are part of fleet, the Toyota vehicle Ford truck is part of a fleet, right. So what will happen is that once you give a consent that am okay to share my data, that consent gets passed on to the OEMs. [03:08] Sandip though, I imagine you've got to install during the manufacture process some piece of hardware to actually capture this data. Right? Even if you have to wait for the user or the buyer of the car to say yes, you have to build in some piece of hardware. Right? [03:20] >> That hardware is already there in your vehicle. Every vehicle already has a modem built in just like your mobile phone. Every vehicle already has a modem which is already built in. So from the perspective of enabling the data that already exists, that data already exists, right. So what is happening is that once you give a consent that data gets sent to the cloud and then it gets handed over to cerebrumx. [03:46] Understood. Name some examples because you're not selling to consumers, I don't think. You're selling to companies that have fleets of Ford trucks and they want to track all of their fleet of Ford trucks. Right? [03:57] >> Yeah. Let's say that if if you take a specific example of, let's say, a Ford. Okay, let's say that's for example, you are looking for insurance deal, You're you're looking at an insurance and you go to one of those insurance providers, right? [04:14] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:37] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:02] get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna 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. 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 [05:24] 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, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [05:49] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second. But if [06:11] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation 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. Alright. Let's jump back into the [06:38] interview. Well, the problem is is my only system note when you use the word you, they don't know what you means. Who is you? [06:44] >> So as an end consumer, right? When you are a consumer, like, let's say Nathan says, well, I need to get an insurance. And what you do is you go to one of the a Geico's of the world right and you go to them you say well I need insurance and what you would do is you would click on the portal and what will happen is you would say that yes I'm ready to share my data so [07:07] >> that information from the likes of the insurance companies like GEICO etc. Comes to us and from that consent what we do is we pass that on to Ford and based on that I think consent I think the data starts coming to us and then we really work on the data and pass on to the insurance companies. [07:26] Okay. So so I as a consumer go to GEICO, I say, yes, GEICO, you can get my data that notifies your hardware or your application in my Ford truck. You pass my speeding or, you know, stop sign data to Ford, then what does Ford do with it? [07:41] >> So Ford Ford doesn't do. Ford Ford is only concerned about your consent. They're they're they're really particular whether if the data they're passing on, the concept is there or not. So based on your driving habit, like if you're over speeding or if for example your acceleration, your driving behavior is not right, there is an issue with your driving behavior, what happens is your insurance policy, your premium could go positive negative. Right? If you're a good driver, [08:08] >> you get the benefit. If you're not a good driver [08:11] No. I understand. I think I think everyone understands that. I'm trying to understand the information flow. So you're you're who's paying you Ford, GEICO or the consumer? [08:19] >> It'll be coming in from the GEICO side or or or any of those insurers. Right. [08:23] Okay. So you're not when you say you work with the top five minus GM, that's just what you're that's not those are not your customers. Your customers are insurance [08:29] >> Yes. [08:30] Like GEICO. [08:32] >> Yeah, so if you look into these top five are raw material that's where you get the data from. Are the consumers of the data the people who are paying for the data are the insurance companies, are the fleet companies the fleet providers like Azuga which is part of Bridgestone or or the aftermarket companies. Okay. So those are the people who are paying [08:52] Sorry. Name an example. Name a couple other examples of fleet companies that pay you. [08:55] >> So for example, Bridgestone Mobility. Right? [08:57] I'm sorry. I I say that slower. [08:59] >> Bridgestone. Bridgestone Mobility. Azuga is a company. Let's say Azuga is a company. [09:05] Okay. So you're saying it you're saying it fast and I can't understand the company you're saying. So Bitstorm Bitstorm b I t s t o r m? [09:12] >> B r I d g e. Bridgestone. Bridge. [09:16] Bridge. Okay. [09:17] >> Bridge. [09:18] Bridge Bridgestorm Mobility. [09:20] >> Yeah. So Bridgestone, they have their mobility, which is they have a fleet division which is Azuga, A Z U G A. [09:29] Got it. [09:30] >> So typically what will happen is that Azuga would come to us and say well I need data from let's say Stellantis vehicle right so for example okay. So what we do is we go and tell Stellantis that this is what consent which we have. The consent gets passed on to Stellantis and then Stellantis enables those [09:51] Sorry. Sandip, I don't know what how does so there's Bridgestone, there's Bridgestone Mobility fleet, and there's a Zuka inside of that fleet. What is Stellantis? [09:59] >> So so Stellantis is FCA as an [10:01] What? [10:03] >> It's an FCA for Fiat Chrysler. [10:05] So Oh, it's a type of car? [10:07] >> No. It it's it's a company. Right? Stellantis is a company which is Fiat Chrysler plus PSA. [10:14] >> Fiat Chrysler plus PSA combined is Stellantis. [10:18] Got it. [10:19] >> This was a new nomenclature which which happened. I think the whole merger happened 2022. Right? January 2022. So that's that's Yeah. [10:26] Yeah. This is a car brand. It's it they own Chrysler and Fiat. [10:30] >> Yeah. So now let's say that they have a RAM RAM truck, like RAM 1,500. Right? And and that is part of a fleet of Azuga right. So Azuga would come to us and say well I need to track these vehicles right, their vehicles which are the RAM trucks right that's what you could track, you're tracking RAM trucks right. They They give us a consent, yes I think it's okay legally all right to really get the data [10:54] >> for these RAM trucks that information gets passed to the car manufacturer in this case it's Stellantis once it gets that data that that full confirmation they start giving you the data out. Right? So that that's the whole process in this case. [11:10] So guys guys, just to clear just for everyone listening, Azuga is a company owned by Bridgestone that allows you to upgrade your fleets with their GPS tracking software and dashcams. It sounds like, Sandip, you are built into that software module. [11:25] >> Yeah. So so what will happen is right now that company is using some other mechanism to track the data. There is a adjunct device by which they get this information, which is not coming in from the vehicle. It is coming from an adjunct hardware. They have to put an extra hardware to track the [11:43] Okay. You replace that? [11:44] >> Yes. We replace that. So [11:46] Understood. [11:48] >> Now becomes natural because the data is coming from the vehicle itself. [11:51] Okay. So again, I want to make sure to get your customers here and then I want to make sure we're short on time. So I want to get to the other stuff here. But insurance companies, fleet companies like Bridgestone Mobility and what was the third kind of customer? [12:01] >> Third is more like an aftermarket warranty companies. There is a company Axiom Connected, a x I o m. Axiom Connected. [12:11] Interesting. Yeah. Okay. Cool. Very cool. Okay. And and then give me an example, but I wanna get your backstory here. But before we do that, what does the average customer pay you per month or per year to use this technology? [12:20] >> So typically you get an average revenue per vehicle, it goes somewhere between $72 which is $6 per month to up to $10, right, which can go up to around $120 per month, right. So it depends upon what data they are getting, what data they are getting. [12:39] How many vehicles though when a new customer signs up for you, how many vehicles are they usually managing? Five, ten, a 100, a thousand? [12:45] >> So so typically most of these customers they have more than 100 k kind of vehicles. Right? These fleet companies they have 100,000 plus vehicles. Right? If you look at [12:56] Okay. So if someone's signing up free to manage a 100 vehicles at $70 a year, that's a $7,000 per year contract. That's your sweet spot. [13:01] >> So that that's that's the way it works. But again, then it scales up. Right? Because then Yeah. [13:05] But is that your sweet spot? Would you say the average is right around there? 7,000 a year for a 100 cars? [13:10] >> Yeah. For 100 cars, but we're talking about 100 k vehicles, not 100 cars. We are talking about 100,000 vehicles. Right? Each of these fleet companies, for example, Azuga has 100,000 vehicles. [13:20] Now, Sandip, I understand that. I'm asking you, when they pay you, are they typically paying on average for a 100 cars at $70 a year or a 100,000 at $70 a year? What is your sweet spot? [13:30] >> So our sweet spot when it starts with it's something around thousand vehicles, thousand to two thousand. That's that's what we start with. That's then we scale up. [13:38] Okay. So that's like $70 to that's like 70,000 to 140,000 a year, something like that. Yeah. [13:43] >> So that's that's what it's typical customer would start with somewhere around 70 k to 140 k, 120 k kind of listing per [13:50] I see. [13:52] >> And then you have those multipliers, like in terms of more customers and in terms of really they scale up, etcetera, and so on and so forth. [13:57] Let's put this on a timeline, when did you launch the business? What year? [14:00] >> So we started the company in July 2020 and our product was up and operational in [14:09] >> June 2022 this year that's when the product was operational where we started integration with this thing. So right now it is roughly around four months. [14:18] Okay and how did you pay for your salaries and stuff? I mean there's two years there where you have no revenue. [14:23] >> No. But I think initially, I think the company was bootstrapped by the founders itself. Like we are four founders who bootstrapped the company for close to nine months or eight months. That's what we bootstrapped. And after that, we went for series A. So we were lucky to really get a series A by March 2021, closed our series A. [14:45] How much was that for? [14:46] >> So that was 5,500,000. [14:48] 4.5? [14:49] >> 5.5. [14:50] 5.5. Interesting. And when you most folks, you know, when they're raising a series series a last year, they were selling sort of 10 to 15% of the business. Were you sort of in that same range? [14:59] >> Yeah. I think that's that's what it is. Yeah. [15:01] Okay. Fair enough. So I mean, you're raising it like a 30 to 50,000,000 valuation pre revenue really. Right? [15:07] >> Yeah. So I think that was a good part because most of the companies, [15:13] >> I think who were like some a couple of our other companies, I think they were valued at 1,400,000,000. Right? The companies were in the similar segment. Right? [15:22] Like who? Name a couple. [15:24] >> Yeah. There is Otonomo and Wejo. Right? At that point of time. [15:26] Spell those? [15:27] >> Yeah. O t o n o n o. Otonomo. [15:32] A t o n o. [15:33] >> O o [15:37] >> as in orange, O T O N O M O. [15:41] O T O N O M O. [15:43] >> Yeah, so I think their market cap was pretty high when they went public, right? Again, at that point of time, I think this was one of the red, I would say, pretty hot in that sense, right? So I think we were lucky to agree we were there at the right time and within nine months we closed our series [16:04] Okay, interesting. And then fast forward to today, how many customers are you working with? [16:08] >> Right now we have seven customers right now and as I mentioned, one of them is the I would say top three insurer in North America that's one. I talked about Azuga then you have Axiom Connected. [16:28] Oh Azuga is a customer? [16:30] >> Yeah, Azuga is a customer. [16:31] Amazing, amazing. So, but if you've got seven customers paying an average of $100,000 a year, you guys just broke about a $700,000 run rate, right? [16:38] >> So, yeah, so we will close. So again, as you, the ARR which we close this year will be close to around 1,200,000. That's [16:48] But what you at what are you at today, though, in terms of run rate? [16:51] >> Our run rate right now is roughly around 600 k as an ARR right now as we start. [16:57] Okay. So you think you're gonna double your ARR in the next sixty days? [17:01] >> Yeah. I think because at sea, it's about really onboarding the vehicle. As soon as you onboard a fleet, the fleet itself becomes, let's say, that you're onboarding thousand vehicles or so. Right? So that's that's the kind of model it is. [17:12] Okay. And if you're doing $50,000 a month today in revenue, which is a $600,000 run rate, what were you doing exactly one year ago? Were you pre revenue? [17:20] >> Yeah. Were pre revenue. As I mentioned, like, we went into production in June 2022. So like it's just roughly around four months when we are we are in production. [17:31] That makes sense. That makes sense. Talk to me about your team. How many folks are on the team today? [17:35] >> So we have 39 people, 36 are permanent, three contractors. [17:41] Sorry. 36 are what? [17:42] >> 36 permanent members and three contractors full time. [17:45] 36. Got it. And how many are engineers? [17:49] >> So roughly around 28 are engineers. [17:52] Twenty nine? [17:53] >> Twenty eight. [17:54] 28. Okay. 28 engineers. And how have you I mean, obviously now we're in a bit of a period you raised in the heyday last year, 5,500,000. Right? You grew your team pretty big, right? 36 employees for 600 ks in revenue is very small revenue per employee. How are you thinking about managing your burn in a crazy economy? [18:12] >> Yes, so I think that's a good question. Like in terms of burn, most of our development team is in India. So what we have done is we have kept the sales and marketing in US while most of the pre sales in US while most of the development is in India. So typically I think our burn is close to around 150 to 180 ks per month. I think that's burn. Yeah. So our again, we are pretty conscious [18:39] >> about that and as the revenue starts kicking in. So I think that's where I think you start getting a lot of that starts getting offset. [18:45] And I imagine you still have a lot of you should have a lot of the series A still on your bank. [18:48] You should [18:49] have more than 3,000,000 in the bank, right? [18:50] >> Yeah. Yeah. So we have. Yeah. So you have guessed it right. [18:54] Yeah. Very cool. Alright. Anything else you wanna chat about before we wrap up? [18:59] >> No. I think that's it. So, yeah, I think pretty excited and again, the market is pretty hot but where we are right now with most of the cars getting connected, I think this is going to be one of the big segments of all our look forward. [19:13] Alright. Well, we're rooting for you. In the meantime, let's wrap up with the famous five. Number one, your favorite book. [19:17] >> My favorite book is Fountainhead, Ayn Rand. [19:23] Spell it. Fountainhead. Oh, yeah. Yeah. Yeah. Number two, is there a CEO you're following or studying? [19:29] >> I don't think I'm following anybody. Right? Yeah. But I just hear to most of the people, but nothing like in particular that you follow. Right? [19:36] Number three, what's your favorite online tool? [19:40] >> Favorite online tool is the expense management because you have to control the expenses part of it. [19:44] Which tool? [19:45] >> I use Zoho. [19:47] >> Zoho. [19:48] Okay. Number four. How many hours of sleep do you get every night? How many? Hours of sleep. [19:54] >> Five hours. [19:55] And situation, married, single, kids? [19:57] >> I'm married with kid. [19:59] How many kids? [20:00] >> One. [20:01] One. And how old are you? [20:03] >> I'm I'm on the other side of 50. [20:05] 53. [20:07] >> 53. [20:08] Last question. Something you wish you knew when you were 20. [20:10] >> Yeah. Wish I knew that engineering is not the end of or not not not the only thing that you need to know. Right? Business development is extremely important. Right? Being savvy on the business development is extremely important. [20:24] Guys, they charge insurance companies, aftermarket companies, and and, you know, connected fleet companies anywhere between 70,000 and $100,000 per year. Seven customers today, they just started selling five months ago, already at a 600,000 run rate. They think the end of twenty twenty two at a $1,200,000 run rate. They're basically giving all the speed data, acceleration data from your car back to GEICO. So GEICO knows how to price your insurance. Right? Or so can get a cheaper [20:50] rate. That's sort of a a good example there. They raised a 5,500,000 series a last year, sold between, call it, 10-20% of the business doing that. Team of 36 today, they control their burn, which is net burn a $150,000 per month right now by having their engineering team in India. They've got plenty of runway though to continue to drive growth. We're certainly rooting for them, and we appreciate, Sandip, you taking us to the top. [21:08] >> Yep. Okay. Thank you very much. [21:11] 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 1PM [21:36] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 an acquisition, a big [21:58] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to 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 saying. Sign [22:20] 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. 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, I do it so that we can all learn. We have to counter those people. We got [22:40] 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. Hi.