Churpy Revenue, Valuation & Funding (2024)

hey folks my guest today is john juma he's a ceo of chirpy he's an ex-banker and tech professional after working at city for nine years he rose to head of operational risk in east africa and i t projects across sub-saharan africa he worked for several startups including net guardians a swiss fraud management startup and senior rolls across risk and account management then he founded his own risk startup helping cooperative unions to digitize client onboarding and loan origination and now building chirpy.co account receivables automation john you ready to take us to the top absolutely happy to have this discussion today thank you for having me you bet what does account receivables automation mean so simply this means reconciliation for outstanding receivables from your debtors and i'm talking about imagine your business and you keep sending out invoices so that people can pay back for goods and services that you've delivered now that's what you call a receivable now anytime this receivables are out you know not yet paid out there that's what now you refer as outstanding so we've automated that process over as soon as you receive payment for that invoice be able to instantly allocate that payment and reconcile it against an outstanding invoice i see and what are businesses paying you on average per month to use the technology so for us we've we have an entry fee of 24 dollars per annum to just use the service that's about two thousand dollars a month that's basically the cost of an accountant um as a basis because we're augmenting the um you know the tasks that the accountant spends time doing so as opposed to doing those manual tasks they should be you know spending more time in strategic roles like budgeting etc where they will provide more value to the business and just leave the mundane finance operations to choppy who's a an accountant that never falls sick he's always on time and you know reconciles 100 about standing receivables all right so the average customer pays 24 000 a year absolutely for that reconciliation yeah and tell me more about this back story here when did you launch the business what year so we we launched proper april of 2021 but we were registered in delaware us in december of 2020 um so we we now formed the team the co-founding team myself kennedy who runs product and james our cto and for the last one year uh we've basically been building a lot of product and a couple of anchor clients that you're working on did you guys just the three of you split equity evenly 33 each uh for me and kennedy we had an event split james who joined us later got a small stake and most of that remaining equity some of it went to our pre-seed investor antler a global bc company and then there after release we raised a million rounds a million dollars around where we embodied investors from new york and a couple of other interesting angels but when you launched it sounds like you and kennedy own like 40 each the third co-founder owned like 20 something like that before you raised yeah before we raised uh the 20 was uh owned by antler i see so okay tell me more about the fundraising story when did you raise your precede round it is a precede round march of last year march of 2021 a hundred thousand dollars um after graduating from antlers uh generator program uh where we spent about 20 weeks with kennedy uh just ideating and you know the mantra there was fall in love with the problem and that's what we spent 20 weeks identifying what's this major pain that businesses go through while they're managing the finance operations um so that's that's after the program antler now invested after seeing the size of the problem and how you know we were addressing it uh considering the fact that myself and kennedy have worked in banks understand clearly what customers are looking out for how they're suffering from this problem around receivables 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 it 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 valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're gonna see three or four different valuations inside of your frowner 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 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 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 raised they sold 22 to 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 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 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 forward slash products forward slash evaluations 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 all right let's jump back into the interview understood and what was the second round then so the second round was uh we started off late last year we went out looking for a million dollars basically to strengthen product because it's quite a lot of integration work that we need to build into erps or stroke accounting systems and spend a lot of time uh also connecting to banks because that's the other data source we need to compare bank payments and um erp invoices so we we we finalized the rounds about a month ago and this article was also highly posted into ad you know like techcrunch and a couple of other payments and john what most folks in their seat round are selling you know 15 to 20 of their business is that the range you were in uh precisely we that was about 14 ish okay okay you got it so so you're you use what does that mean so blah blah blah twelve ten eight nine you you did about it it was about a a eight million valuation something like that it was about six point five six point five pre money yeah post money post money six point five okay that feels fair to me and then i guess uh tell me more about the customer journey here so how many customers are you serving today uh we have about um about five customers already okay and so high touch obviously high price right so that means you're doing 10 000 a month in mrr um there abouts um but it depends because we have varying products within our portfolio sets uh that are priced differently so we have four main products we have the reconciliation we have trade finance um and you know that's really picking up um then we have payments products to just help customers reconcile um and i think that's essentially what we are working towards so both of all these have separate um pricing points yeah but now john but make it simple for us what is mrr today is it about ten thousand it's about ten thousand yes and where were you exactly one year ago do you remember zero all right fair enough so you're off to the races you've got capital how many folks are on your team full time about 14 how many engineers about uh eight eight and what's your approach for finding these first five customers are they specific to any region you have obviously deep roots in sub-saharan africa and other locations or are you more global we're very much a sub-saharan africa driven business but breaking into the middle east north africa region but our anchor clients are all based out of kenya so we are talking about payment companies uh we're talking about manufacturing businesses we're talking about pension companies that i now portfolio of customers yep and did most of those customers come from relationships you built when you were working inside of these banks um so we have a team team of two sales or three sales people uh full time so we are doing a lot of um boots on the ground um speaking to a lot of these clients but secondly we are also doing a lot of and leveraging a lot of digital marketing just having a lot of press on uh you know digital media no okay that makes a ton of sense uh what's an extraordinary product i mean you have four for referrals how do you how do you know that you like to build four products most people can't build one product right why did you spend all the time and energy and money to build four right at the start so reconciliation is kind of the assurance piece of a business so we can easily know what's outstanding what needs to get paid and then secondly based on that information we can see if a business is struggling with a long sales cycle uh sorry long outstanding uh day sale what you call day sales or signing cycle meaning that it's taking a bit long to for receivables to come in then we can build a lending product on top of that and so we are working with the regional banks such as street development bank uh who are offering us the balance sheets to not address this problem yeah and then so this was a completely organic products we didn't have to like think out of the box we naturally came as a solution to customer spray paints and what's it costing you right now what's your cac to get a new 24 000 a year customer do you know yeah um of course right now it's high touch point it's holidays um but with time as we scale product and commoditized offering then our will definitely be at a very low cost um but we are as i said we have a sales team uh that really composes the the high cost of you know uh the team right now but digital marketing marketing and uh the organic nature of our virtual accounts product because we've built something around virtual accounts what you can imagine more than treasury is done in the us with their virtual accounts product is exactly uh what's like scaling very quickly um and that's completely organic growth so that's keeping our calculate um you know yeah that's great well john we're certainly rooting for you you're off to the races in the meantime though let's wrap up here with the famous five number one what's your last book that you read oh man um it was a sales book uh i forgot the title um all right but it was more it was more about um you know how to convert um technical people into sales interesting number two is there a ceo you're following or studying absolutely that that you move from uh modern treasury modern treasury that's a good one uh number three what's your favorite online tool for building chirpy favorite online to right now be because i head up sales so hubspot is really interesting for me number four yeah number four how many hours i sleep to get every night uh sure depends um i've had all nighters you know like going all night um average i would say about six to seven hours okay and what situation john married single kids married for almost the last ten years with three kids three two years we can see them over your shoulder it looks like absolutely three kids and how old are you i'll be 40 years next year 40 years okay uh last question what's something you wish you knew when you were 20 um i wish i had the opportunity to probably explore more in innovation and building businesses unfortunately when we left school it was all about employment mm-hmm exactly that's but i always had this bug to start a business and i think um i wish that's what i could have done in my 20s guys chirpy.com a kenya based accounts reveals receivable sas their first five customers paying 24 000 bucks a year on average doing about 10 000 bucks a month in monthly recurring revenue launched back in 2020 two rounds of funding so far 100k precede 1 million seat at a 6.5 post money valuation 14 on the team nine engineers three sales reps as john looks to scale the business chirpy.co check it out john thanks for taking us to the top thank you so much have a good evening one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 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 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