How Churpy Reached $10K MRR and a $6.5M Valuation with 5 Customers in 2022 (Interview with CEO John Juma)

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is John Juma. He's the CEO of Churpy. He's an ex banker and tech professional. After working at Citi for nine years, he rose to head of operational risk in East Africa and IT projects across Sub Saharan Africa. He worked for several startups, including NetGuardians, a Swiss fraud management startup, and senior roles across risk and account management. Then he founded his own risk tech startup helping cooperative unions to digitize client onboarding and

00:22loan origination, and now building churpy.co, account receivables automation. John, you ready to take us to the top?

John Juma

00:29>> Absolutely. Happy to have this discussion Thank you for having me.

What Is Accounts Receivable Automation

Nathan Latka

00:32You bet. What does account receivables automation mean?

John Juma

00:36>> So simply, this means reconciliation for outstanding receivables from your debtors. And I'm talking about, imagine you're a 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 these receivables are, 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, you're

01:09>> able to instantly allocate that payment and reconcile it against an outstanding invoice.

Nathan Latka

01:15I see. And what are businesses paying you on average per month to use the technology?

Pricing and Annual Contract Value

John Juma

01:20>> So for us, we've we have an entry fee of $24,000 per annum to just use the service. That's about $2,000 a month. That's basically the cost of an accountant as a basis because we are augmenting the tasks that the accountant spends time doing. So as opposed to doing those manual tasks, they should be spending more time in strategic roles like budgeting, etc, where they will provide more value to the business and just leave the mundane finance

01:52>> operations to Churpy, who's an accountant that never falls sick, is always on time, and, you know, reconciles a 100% of outstanding receivables.

Nathan Latka

02:02Alright. So the average customer pays 24,000 a year?

John Juma

02:05>> Absolutely, for that reconciliation.

Founding Story and Launch Timeline

Nathan Latka

02:08Yeah. And tell me more about this backstory here. When did you launch the business? What year?

John Juma

02:13>> So we launched properly in April 2021, but we were registered in Delaware, US in December 2020.

02:26>> So we now formed the team, the co founding team, myself Kennedy, who runs product, and James, our CTO. And for the last one year, we've basically been building a lot of product and a couple of anchor clients that we are

Nathan Latka

02:41working John, did you guys just, the three of you split equity evenly, 33 each?

Co-Founder Equity Split

John Juma

02:47>> For me and Kennedy, we had an even 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 VC company. And then thereafter, we raised a million round, a million dollars round where we onboarded investors from New York and a couple of other interesting angels.

Nathan Latka

03:10But when you launched, it sounds like you and Kennedy owned like 40% each, The third co founder owned like 20%, something like that before you raised.

John Juma

03:19>> Yeah. Before we raised, the 20% was owned by Antler.

Nathan Latka

03:24I see. So okay. Tell me more about the fundraising story. When did you raise your pre seed round?

Pre-Seed Round with Antler

John Juma

03:30>> We raised our pre seed round March of last year, March 2021, $100,000 after graduating from Antler's generator program, where we spent about twenty weeks with Antler, just ideating. And you know, the mantra there was fall in love with the problem. And that's what we spent twenty weeks identifying. What's this major pain that businesses go through while they are managing their finance operations? So that's after the programme. Antler now invested, after seeing the size of the

04:03>> problem and how, you know, we were addressing it. Considering the fact that myself and Kennedy have worked in banks, understand clearly what customers are looking out for, how they are suffering from this problem around receivables.

Nathan Latka

04:17Oh, 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

04:40your 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

05:04get 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

05:26not 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

05:52going 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

06:14if 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

06:40the interview. Understood. And what was the second round then?

Seed Round Details and Valuation

John Juma

06:44>> So the second round was, we started off late last year. We went out looking for a million dollars, basically to strengthen products, because there's quite a lot of integration work that we need to build into ERPs or stroke accounting systems and spend a lot of time also connecting to banks because that's the other data source. We need to compare bank payments and ERP invoices. So we've finalized the rounds about a month ago. And this article was

07:17>> also widely posted in, you know, like TechCrunch and a couple of other payments dot

Nathan Latka

07:22And John, what most folks in their seed round are selling, you know, 15 to 20% of their business. Is that the range you were in?

John Juma

07:29>> Precisely, we that was about 14% ish.

Nathan Latka

07:32Okay. Okay.

07:34Got it. So so you're you so what does that mean? So blah blah blah blah, twelve, ten, eight, nine. You did about it. It was about a $8 or $9,000,000 valuation, something like that.

John Juma

07:44>> It was about 6.5.

Nathan Latka

07:476.5. Pre money?

John Juma

07:48>> Yep. Post money.

Nathan Latka

07:50Post money, 6.5. Okay. That's feel feels fair to me. And then, I guess, tell me more about the customer journey here. So how many customers are you serving today?

Customer Count and MRR

John Juma

07:59>> We have about

08:02>> five customers already.

Nathan Latka

08:04Okay. And so high touch, obviously high price, right? So that means you're doing 10,000 a month in MRR?

John Juma

08:12>> Thereabouts. But it depends because we have varying products within our portfolio sets that are priced differently. So we have four main products, we have the reconciliation, we have trade finance and you know that's really picking up. Then we have payments products to just help customers reconcile. And I think that's essentially what we are working towards. So both of all these have separate pricing points. Yeah. But now have

Nathan Latka

08:42John, but make it simple for us. What what is MRR today?

John Juma

08:44>> Is it

Nathan Latka

08:45about 10,000?

John Juma

08:46>> It's about 10,000. Yes.

Nathan Latka

08:48And where were you exactly one year ago? Do you remember?

John Juma

08:51>> Zero.

Nathan Latka

08:53Alright. Fair enough. So you're off to the races. You've got capital. How many folks are on your team full time?

Team Size and Engineers

John Juma

08:59>> About 14.

Nathan Latka

09:00How many engineers?

John Juma

09:03>> About eight.

Nathan Latka

09:06Eight. And what's your approach for finding these first five customers?

John Juma

09:09>> Are they

Nathan Latka

09:10specific to any region? You have obviously deep roots in Sub Saharan Africa and other locations, or are you more global?

Target Markets and Customer Profiles

John Juma

09:17>> 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. We're talking about manufacturing businesses. We're talking about pension companies that are in our portfolio of customers.

Nathan Latka

09:37Yep. And did most of those customers come from relationships you built when you were working inside of these banks?

John Juma

09:43>> So

09:46>> we have a team of two sales or three salespeople, full time. So we are doing a lot of boots on the ground, 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 pressure on, you know, digital media.

Nathan Latka

10:04Yeah. Okay. That makes a ton of sense. What's next from a product? I mean, have four. For first off, 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?

Product Suite and Organic Expansion

John Juma

10:19>> 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, sorry long outstanding day sale, what you call day sales outstanding cycle, meaning that it is taking a bit long for receivables to come in, then we can build a lending product on top of that. And

10:47>> so we are working with regional banks such as Trade and Development Bank, who are offering us the balance sheets to now address this problem.

Nathan Latka

10:55I see.

John Juma

10:56>> And then thirdly, yeah, and then so these were completely organic products. We didn't have to like think out of the box. They naturally came as a solution to customers'pains.

Nathan Latka

11:05And what's it costing you right now? What's your CAC to get a new $24,000 a year customer? Do you know?

John Juma

11:13>> Yeah. Of course, right now, it's high touch point. It's early days.

11:18>> But with time as we scale product and commoditize the offering, then our CAC will definitely be at a very low cost. But we are, as I said, we have a sales team that really composes the high cost of you know, the team right now. But digital marketing and the organic nature of our virtual accounts product, because we've built something around virtual accounts, what you can imagine Modern Treasury has done in The US with their virtual accounts

Customer Acquisition and CAC

John Juma

11:45>> product is exactly what's like scaling very quickly. And that's completely organic growth. So that's keeping our CAC really, you know, grounded.

Nathan Latka

11:56Yeah. That's great.

11:58Well, 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?

John Juma

12:07>> Oh, man. It was a sales book. I forget the title. Alright. Sales about, was you know, how to convert technical people into sales.

Nathan Latka

12:18Interesting. Number two, is there a CEO you're following or studying?

John Juma

12:22>> Absolutely. The guy from Modern Treasury.

Nathan Latka

12:26Modern treasury. That's good one. Number three, what's your favorite online tool for building Churpy?

John Juma

12:33>> Favorite online tool right now would be because I head up sales, so HubSpot is really interesting for me.

12:39>> Mhmm.

Nathan Latka

12:40Number four. For the money.

John Juma

12:41>> Yeah.

Nathan Latka

12:42Number four. How many hours of sleep do get every night?

John Juma

12:47>> Sure. Depends. I've had all nighters, you know, like going all night. Average, I would say about six to seven hours.

Famous Five Rapid Fire

Nathan Latka

12:57Okay. And what's your situation, John? Married, single, kids?

John Juma

13:01>> Married for almost the last ten years with three kids.

Nathan Latka

13:04Three kids.

John Juma

13:04>> Should be celebrating the tenth. Can see we

Nathan Latka

13:06can see can see them over your shoulder, it looks like.

John Juma

13:09>> Absolutely. Three kids.

Nathan Latka

13:11And how old are you?

John Juma

13:13>> I'll be 40 years next year.

Nathan Latka

13:1540 years. Okay. Last question. What's something you wish you knew when you were 20?

Reflections on Entrepreneurship

John Juma

13:22>> 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.

Nathan Latka

13:32Mhmm. Get a job, Exactly. Get

John Juma

13:37>> That's but I always had this spark to start a business. And I think

13:42>> I wish that's what I could have done in my twenties.

Nathan Latka

13:45Guys, churpy.co, a Kenya based accounts receivable SaaS, their first five customers paying $24,000 a year on average. So doing about $10,000 a month in monthly recurring revenue. Launched back in 2020, two rounds of funding so far, 100 k pre seed, 1,000,000 seed at a 6.5 post money valuation, 14 on the team, eight engineers, three sales reps as John looks to scale the business, churpy.co. Check it out. John, thanks for taking us to the top.

John Juma

14:11>> Thank you so much. Have a good evening.

Nathan Latka

14:14One 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

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