Chantico Technology, Inc. Revenue, Valuation & Funding (2024)

[00:00] Guys, chanticotechnology is doing $35,000 a month today across five customers with a 100 paid seats at $350 a pop. She's invented this idea called recursion partitioning. They've got a thousand events that help RIA advisors understand how their portfolios might perform if some combination of these a thousand outputs, these a thousand events combined together helps them do sort of disaster planning in an efficient way, just scaling here nicely. 425,000 pre seed raised last year to 5,000,000 cap [00:25] raise and a little bit more this year as she looks to scale with a team of eight. Hey folks, my guest today is Ms. Gina Sanchez. She's the CEO of Chanticotechnology, an investment and technology software publisher. In addition, served as chairwoman of the Los Angeles County Employee Retirement Association, Board of Retirement, and as a member of the board of directors for Cedar Sinai Hospital. She also serves as an advisory board member for the UCLA Masters of [00:48] Financial and Engineering program. Gina, you ready to take us to the top? [00:52] >> I'm ready to do it. [00:54] You've got your plate full. You're doing a lot of stuff. How much time can you spend on Chantico? [00:59] >> Well, I spend all my time on Chantico actually. So, I have one last year as a public service to LA County Employee Retirement Association, which I've done for six years. And, you know, I launched Chanticotechnology actually last year in 2021, or at the end of twenty twenty one, and we got going in 2022 with fundraising and secured our first round of pre fee funding in 2022. So this has been what I live and breathe for since [01:33] >> that moment. [01:34] That's awesome. Okay, so tell us why you launched this. I mean, how did you discover this problem? [01:40] >> Well, so I actually ran a consulting company for a decade and in that time period, and before that I was a portfolio manager at American Century Investment Management where I had started using recursive partitioning in addition to kind of your traditional regression analysis for data analysis. And what I found was that while regression was really good at kind of guessing what the average expectation would be, recursive partitioning was really good at guessing the extremes. And so [02:15] >> when you ask, like, is the describe your product in five words, we forecast extreme events. That's what we do. And that's what quite frankly, that's when we lose money as portfolio managers, and that's when we get hired as investment managers or wealth managers. And so, you know, I started crafting this product in the form of a consulting product about a decade ago. So I spent you know, once I had lifted out of Ravina Global Economics where [02:45] >> I had launched consultancy that was profitable, We were able to adequately spin that out. I earned him out over three years. And in that time period, I kind of gave myself the agenda and latitude to build the kind of research agenda I wanted to build. And with my client base, I'm really focused on on this technology and effectively created a prototype for what was then to become the IP that we spun out into Chanticotechnology. And so [03:14] >> that IP actually has ten years of client testing behind it. [03:18] That's wild. Okay. I I wanna come back to the idea of recursion partitioning here in a second. But first, to keep going in 2021, you mentioned a seed round. I think you said in 2022. What was the size of that round? [03:29] >> So, so we actually raised, $425,000 in 2021, sorry, in 2022, from twenty forty five Ventures, Hulu Ventures, and a handful of, of individuals. And we added to that actually early this year. And so we're just finalizing the second half of that seed round, which it's been the prolonged seed round. Anybody who's been raising money knows how painful it's been to find and secure pre seed funding. We I think one of the things that have kept us [04:03] >> in front of early stage venture companies is that our product is the exact kind of product you need when markets are volatile. You couldn't get more volatile markets in the last few years. So Yeah. And strangely, we were really concerned that the meltdown in Silicon Valley Bank was gonna [04:21] >> be sort of a real death blow to our funding process. But actually, our funding fed up after that, probably because people actually came to us saying, hey, I know you're not fully built yet, but can we subscribe to whatever you have? And so we're actually pre selling just access to the data engine to access to the analysis engine. And so I think that's probably what has kept us in the game while other, other early stage companies [04:47] >> are are having troubles. [04:49] 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 [05:12] 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 [05:37] 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 [05:58] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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 [06:24] 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. All right, we're gonna go back to the YouTube video here in a second, but [06:46] if 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 [07:12] the interview. Couple quick questions here. So most folks are telling, you know, 20% of our company in pre seed rounds these days. Are you sort of in that same range? [07:21] >> Say say that again? [07:22] Most folks in pre seed rounds today are selling 15 to 20% of their business. Are you in that same range? [07:27] >> That's exactly what we're doing. Yeah. We're exactly doing that. So we fill 10% so far. We're selling the other 10%. [07:32] That's great. Yeah. So something like a $22,500,000 valuation, something like that. [07:36] >> So we're actually selling at a $5,000,000 valuation. [07:39] Okay. So then you're selling less than if you're only if you've you've okay. Well, I guess 500,000. Right? Got it. Got it. Got it. Yeah. That makes sense. [07:44] >> Yeah. Yeah. [07:45] Yeah. That makes a lot of sense. So so going SVB is obviously and for context of the audience, we're recording this on Wednesday, March 22. So SVB, you know, call that, what was that, ten days ago, something around there. Gina, I mean, that is a definition I would say of, you know, recursion partitioning in an extreme event. So people are gonna be wondering how how if if no one else in the world can predict these things, [08:03] how is Gina saying she could predict it? So how would your technology have identified and told portfolio managers about SVB ahead of time? [08:09] >> Well, it's not gonna tell portfolio managers about SVB. What it tells portfolio managers is how their portfolios respond to [08:18] >> different economic events and what happens when they happen in succession. So while people understand how their portfolio might act when interest rates rise, but what we do is we help them understand what is the exact set of conditions that will lead to the worst performance that they will have. And so what combination of events. And that's really where we don't have to predict the event. We don't have to predict that the pandemic will happen. We just [08:45] >> simply have to predict that oil prices will go up, that interest rates will go up, and that the Fed balance sheet will start to retrench. That tends to be a death blow to a number of portfolios. It doesn't matter what caused it. And so I think a lot of people try to focus on the crystal ballishness of it. We're not in the business of focusing on the crystal ball. We're just basically trying to say, whatever event [09:07] >> happens, if you get a series of events, this is the combination that you want to be aware of. Right? On the flip side, if you're investing for growth, you know, so if we're looking at deal by deal investments into a venture portfolio or PE portfolio, we look for the series of attributes or aspects that will lead to outsized performance. And so this goes in both directions. It actually handles both tails. And so it sells in both [09:35] >> markets. But in those down markets, when people are getting really nervous, sometimes you have to reset expectations and say, hey, If interest rates are rising and, you know, that that, may not be the case anymore, but it it was for the last year, and the Fed balance sheet is not expanding, you know, our expectations have to be lower. So let's reset your expectations so that you don't terminate us, even if we're doing really well as a [10:02] >> as a manager. Right? [10:03] And so the hard isn't the hard part here I don't mean to cut you off. It's just we're we're it's a it's a fast show, and I wanna get a lot in. Isn't the hard part the creative energy required to think of the craziest things that can happen? And if so [10:14] >> That's what [10:15] we do. Yeah. So, like, mean but then how can you possibly so let's say tomorrow, I'm making this up, a Russian submarine hits the Internet cable line in the Atlantic Ocean and cuts Internet communications off between, you know, Europe and The US. I mean, how can you possibly think of all the crazy things that could happen tomorrow across geopolitics, economies, everything? [10:35] >> Yeah. But let let's take that crazy example that you've just put out. Well, what would naturally happen? You'd have a natural fall in ecommerce almost immediately. That fall in ecommerce is gonna result in a fall in in at least temporary fall, in profitability depending on how long that outage happens. That temporary fall in productivity could actually manifest into other elements like a fall in labor. So you could see labor cuts. Right? You could see wages. And [11:00] >> we can tell you how your portfolio will act in those. So it isn't about guessing the event. It's about guessing how the event is going to evolve, in terms of elements that can be predicted. Right? [11:12] I'm not in business trying labor shortage, interest rate rise. Like, you have a list of a 300 items. You don't care what a [11:17] >> vast We have a list amount of over a thousand items And [11:20] we don't care about every event matters. Don't care about what the event is. You care about here are the thousand potential outcomes of any random event. And if you combine event number, you know outcome number seven with outcome number six and nine ninety nine, that would be bad for your portfolio. Precisely. [11:37] >> And the other thing, Nathan, is that we also Not every portfolio cares about all of those events. So sometimes that happens and your portfolio is immune to it, Right? That's also valuable information. So what we're looking for are the events that cause the biggest differences in your expectations and focus you on those six or seven things and anything that could cause those six or seven outcomes. Right? So now you as a manager can stay focused and [12:05] >> you're not worried about every number that flies at you. [12:07] This sounds very valuable, right, if it works. What's the average customer paying you today to use the technology per month or per year? [12:14] >> So we're actually selling this into three different channels. And so if you look at, we're selling this with the SaaS product and the SaaS product has the standard kind of fees, dollars $3.50 per user per month, right? So think about that as about $5,000 per user per year. [12:31] And are most signing up just one user or is your average customer signing up 10 users? [12:34] >> No, no, no. The average customer is actually sending up signing up bundles, right? So so [12:39] How many though typically? Are these teams of two using you or teams of 200 using you? [12:44] >> Depends, our very first client is going to be a team at 75. So, we get some fairly large ones. [12:51] Well, said going to be, are you pre revenue today and you're looking to land your first customer? [12:55] >> So we actually have our first customers. So our first customer is basically coming on. We technically, we have had different plans. This is like the art of the pivot. We were planning this very, very organized beta round with all of our clients that we had signed up to do beta feedback. Well, now we're just selling. So we've gone from beta users to users more [13:18] than So did in the the ones that are already paying, not the ones you're gonna land in the future, ones already paying, how many seats are they buying on average? [13:26] >> Well, we're still just with our beta round. So they only bought 20 seats in the beta round. Right? And so we're gonna grow those. So those 20 seats were all were were already planned to become 75 seats. Right? We're just doing it faster than we had planned. [13:38] Okay. So you have on the platform today across all paying customers to about 20 seats? [13:44] >> No. Actually, have more than that. So we have about a 100 seats of beta customers in 20 seat increments that we had sort of planned into this beta round. That's kind of where we are. [13:57] I'm trying understand though is like there's very different motions with sales SaaS companies, especially ones that are selling kind of investment tech investment SaaS. You could go sell Blackstone a thousand seats and you're building only for Blackstone. You could also sell to individual RIAs where they're only buying two seats and you wanna go sell a thousand different logos, two seats a pop. I'm trying to understand what your motion is. So how many logos are those 100 [14:15] seats spread across? [14:16] >> Five. [14:17] Oh, okay. So average team size of 20, something like that. [14:21] >> 20. Yes. Exactly. Okay. [14:24] I got it. Very cool. Okay. So talk to me about the use case of the land and expand. Right? This is typical SaaS. How do you go from 20 seats and one logo to 75? What are they what are you learning? What are they telling you? [14:34] >> So part of it is really just the educational process. [14:38] And [14:38] >> so if, for example, the logos that we have right now are really primarily registered investment advisors. And so there's an education process that has to happen. People have to learn how to use it. They have to understand what they're seeing. So we're educating them on what the alerts mean, how to use them, how to use the dashboard on a daily basis, how to use it to sort of prioritize your communication with clients. And so as that [15:00] >> sort of expands within the company, you know, we can increase the expansion happens there. We're also partnering with platforms where we can sell to multiple logos through a discounting, Right? So we are working with various partnerships that we're in the process of actually signing. So we haven't signed those. I can't tell you who they are, but there are some good ones and big ones. [15:26] I won't ask for customer names. That's obviously sensitive, but I can say, so three fifty on average per month per seat, you mentioned a 100 seats, multiplying those would put you at about $33,000 a month today in revenue, is that accurate? [15:39] >> Yeah, and that is our goal. Our goal really was to cover initially was just to cover our run rate so that we weren't dependent on the capital markets so that we could sort of keep going. [15:49] But that's your goal or that's where you're at today, about $30? [15:52] >> No, no, no. That's actually That's where we at. That was our goal for this was just [15:55] to cover [15:56] >> our run rate. And so, you know, survival is is everything. [16:00] Sustainability, of course. So if you're at about $3,035,000 bucks a month today in revenue, where were you a year ago so we can calculate growth rate? [16:07] >> Oh, zero. So we had Yeah. And we have an infinite run rate right now, but we're actually so we're we're targeting targeting about a million to $2,000,000 of revenue next year. That's our goal. And of course, you get that crazy run rate that crazy growth rate at the beginning. That million dollars can get to about $10,000,000 reasonably with we have really good confidence that we can get to $10,000,000 where we're really gonna need our venture backers [16:37] >> to get behind us is growing from 10 to a 100. That's a much, much deep different path. [16:44] You keep saying we so How many folks are full time on the team today? [16:47] >> So we have eight full time people. [16:50] You're the sole founder or you have co founders? [16:52] >> No, I have co founders. So myself, our Chief Technology Officer, Gregory Hansen, and our Chief Revenue [16:58] Re co founder. [16:59] >> Shannon Loser. Shannon Lewis. [17:01] Were you nice to each other at the start? You guys just split equity evenly amongst the three of you? [17:06] >> No, I have most of the equity. [17:08] Okay, there you go Gina. [17:11] >> You That's [17:13] Well, we're out of time for today. We're certainly rooting for you. We hope the second party round closes nice and smoothly and we hope you double trip over the next twelve months. In the meantime though, let's wrap up here with the rapid fire Famous Five. Number one, favorite book. [17:26] >> Favorite book, Bridget Jones'Diary. [17:29] Number two, is there a CEO you're following or studying? [17:35] >> I actually follow several CEOs. I mean, I think that [17:43] >> I can't really name one right now. [17:45] That's okay. Three, what's your favorite online tool for building a chanticoke? [17:51] >> Well, actually we have a few favorite tools. I love Carta. It has made our life easy. I love Gusto because we're so small and we need the support. So I have two. [18:00] That's great. And how many hours of sleep do you get every night? [18:05] >> Less than I want to, about six. [18:08] Six, we always ask. We don't know if people are healthy, you know? And situation, Gina, married, single, kiddos? [18:14] >> Married. [18:15] Any kids run around or just a startup? [18:17] >> No. No. I don't think I could do this with children. Honestly, I think it would be a challenge. [18:21] I yeah. It's tough stuff. And can I ask about how old you are? [18:29] >> I'm 50. [18:30] Last question. Something you wish you knew back when you were 20 years old. [18:40] >> That's a tough one. I think I wish I knew that [18:50] >> wish I knew how successful that I would become. It is, I think the reason that Bridget Johnson's Diary is my favorite book is because it is about sort of that inner [19:01] >> kind of monologue we tell ourselves about how we have these insecurities. And I will tell you that going through a venture round forces you to overcome those. [19:14] Yeah, that's right guys. Chanticotechnology is doing $35,000 a month today across five customers with a 100 paid seats at $350 a pop. She's invented this idea called recursion partitioning. They've got a thousand events that help RIA advisors understand how their portfolios might perform if some combination of these a thousand outputs, these a thousand events combined together helps them do sort of disaster planning in an efficient way, just scaling here nicely. 425,000 pre seed raised last year [19:39] to 5,000,000 cap, raising a little bit more this year as she looks to scale with a team of eight. Gina, thank you so much for taking us to the top. [19:46] >> Thank you. [19:48] 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 one [20:12] p. 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 [20:34] an acquisition, a big fundraise, a big sale, a big profitability statement or 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 [20:56] are 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 to [21:15] counter those people. We 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.