Codiga Revenue, Valuation & Funding (2023)

hey folks my guest today is julian delaine she's the founder of codiga a company that helps developers write better code faster he was a tech lead at twitter and amazon web services before this julian you ready to take us to the top yes all right thanks for having me today hopefully you have lots of twitter stock and lots of aws stock right uh i had but you know at some point you take the jump and when you make the jump you need to uh sell your stock okay when did you jump last year ah so you just launched the business last year yeah um so i you know like many uh people that come from tech i was doing the company a little bit on the side at some point i decided to to go full-time so i left my job at a twitter and uh and went full time last year uh at some point i think it's really important to have an area of focus and you it's really hard to um you know be an employee in a large company like this especially when you have responsibilities such as leading a team and making startups like a startup is a full-time job by itself no i totally agree so this makes sense now you were working on this by yourself you you took the leap and you quit help me understand what are do you have customers today and if so what are they paying you for what's the what's the tool do yeah so we started with a tool that do uh what we do what you call automated card review so you push your code and then you detect vulnerabilities coding coding style issues all the issue you're going to have in your code and so before you deploy your code in production we find these issues that first product attract attracted more than 15 000 users on these 15 000 users today we have about 50 paying customers but the customers that are paying are a pretty large customer we only charge when your team is more than five users so we want to give the tool for free to most of the users including individual individual users and then focus on large companies if you think about it you have companies like dropbox only one percent of the user are really paying users and this is kind of the same model and so when someone is paying you what's the average company paying you per month to use codiga oh it totally depends on the number of users of course so we have large companies and small teams so the um the size of the teams depend between roughly 10 to 50 users so it's it's about 500 um you know at most per month or a hundred or 200 months per team okay but maybe a sweet spot might be two or three hundred bucks a month for 20 to 30 seats yeah that's correct and so we started with this product and at some point we realized that we are only analyzing the code when um when people push the code so you write the code and when you're done you push it and then we realized pretty quickly that in fact what we really need to um what we need to do is help the developer write better code up front so think like you are writing the code like you write a google doc you have real-time suggestions about what what you should write how to improve your style and so we started to have another product called the coding assistant that suggests block of code for um for for the developer so as you write code we suggest what you should write you know this makes a lot this makes a lot of sense you're using you're using ideas and code snippets that are have already been validated by thousands of other developers yes that's correct and right now the platform as we have 14 000 users what we really did is grow the platform as much as we can use this user to put code snippets and so we have an engine after that that match what you ask like for example read a file uh you know get data from twitter and then we suggest block of code that product has been developed right now for six months and we're gonna announce um a public launch within the next one or two months 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 going to 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 going to 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 founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to 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 so 50 paying customers at 300 bucks a month you're doing about 15 000 a month right now on revenue something like that something like that okay and what were you doing exactly a year ago do you remember oh zero zero yeah okay and have you bootstrapped this or did you decide to raise capital yes so that's an interesting story um i uh i went through textiles boulder so um so i did that uh last year i went through texture builder i was on the fence about raising money and at some point um you know you when you really want to develop a great product i think having a vc capital coming is really helpful so i raised capital last year how much um to uh to 2.1 million okay and and we raised i learned a lot by uh by by raising because uh you learn a lot about the different um basically fundraising is like selling you sell yourself you sell a story you you sell a future and it's something that i had to learn uh it was really interesting it took me a few months to complete the fundraise but i'm really glad that we were able to raise with really known investors in in the u.s either andrew or traditional vcs and you have great support from them and so you raised 2.1 on a pre-seed was that on a note or a priced round it was safe so you have this save from y combinator that is right now pretty used for all the startups and we just save which is really great because you can simplify the way you are you raise money so there are two kinds of saves ones are capped and there are others that are uncapped with yours uncapped uh no no us okay most people when they're raising their precedent are selling you know 15 to 20 percent of the business if they convert at the cap so was your cap around a 10 cap 10 million uh i will not i will not disclose the cap i nailed it i nailed it i'm right on the money 10 million cap okay so what's next uh so next uh next for us is really about pushing this product for the coding assistants the reason why uh it's because we believe that you're gonna need to have more and more software in the world and you're gonna have more junior developers software is eating the world you probably heard heard that phrase before and the main issue you're gonna have is having junior developer write code really quickly and i really um i'm making a big big bet on this product that we're going to launch in the next two to three months i think we have an existing customer base that we can you know use to promote the product but what we what i really want to do is having a bottom-up approach so have the product go viral don't care about revenue um my investor would probably not like this but try to focus on clock market fit and retention and julian how do you so i guess let me ask some contextual questions then we'll talk about retention how many are on the team today full time uh today full time we have seven people okay seven people and all engineers uh no actually i have one one developer relation uh i have some engineer i have some people that also do marketing and write content so not all all developers i think tech funder sometimes has a has an issue with only hiring technical people and believe that all the issues are technical and i think for tech funders need to learn how to do marketing this is i'm learning myself well how did you get 15 000 signups on your first product oh that's a good that's a that's a good question um take people where they'll try what i did is try to look online where people are looking for such a product so do google search and try to see where people are looking for you so i i wrote a bunch of blog posts and i put the product on the different marketplaces where people are looking for such a product name three of those marketplaces yeah so uh we are present uh on the gita marketplace so what is that oh g2 no github so github yeah github is where you put your source code so it's really easy for people to find you on the gita marketplace uh we also present on the bitbucket marketplace athletion as also a marketplace and every id what was the middle one bitbucket yeah bitbucket yeah and uh and also every developer to have a kind of a marketplace when you can um propose your uh your plugin and your extension to our present on this marketplace and we try to re-target specific keywords for people to find us so if you're using github and you want to have code review you type code review and we are here same thing for uh for bitbucket for the ide the same thing you just go in your id you look for code snippets or coding assistant so how many users it has github driven you uh i would say today um so it's really interesting because you see different type of customers we have a lot of users from github but most of the users are free users on bitbucket we have way less bitbucket users but these users come from companies and these companies are more paying customers so the behavior is different but the github users are driving growth and you know you have the word of mouth people that start to use you on github they're going to talk about your product to their colleague and then they're going to sign up but then it's rare that they're gonna pay well what i don't understand what i understand those most apps getting thousands of years from these marketplaces have dozens of reviews but on the atlassian marketplace codeiga has one review there's no reviews on github uh and i haven't opened the last one yet so how how are they giving you this much traffic because of the numbers the number of people um downloading yeah yeah exactly the number of people also on on github like just github today such a massive website with so many users that if you can capture only a few percent of the number of users it's gonna drive a lot of traffic so you have a new tool coming out your team's growing seven people obviously you raise money so you have plenty of runway but your number one job is to not run out of cash you have to manage burn right so how much are you burning per month right now how many how many months of runway do you have right now we're burning about 50 to 60 kilometers and does that make you nervous are you okay with that i'm totally fine with that how many what is that 24 plus months of runway yeah that's correct so so the goal right now is really to be conservative on the runway because what i want to do is to get product market fit have a tool when people come and use it every single day that's really interesting because for the code review uh platform initially when we started to use it we saw different behavior for the user and for the enterprise enterprise use it almost every day user didn't use it every day what we want to have is a coding assistant that people use every single day so right now we really focus on the product once you have this product market fit and this retention then you're going to increase the spending the monthly spending for for doing more marketings and more more marketing and more sales that makes a lot of sense it's more conservative right now because we developed the product once we lock product market fit let's go and make more marketing and more sales well we'll see what happens we're certainly rooting for you in your new product launch but in the meantime julian let's wrap up with the famous five number one favorite business book um i think the favorite business book will be principal from ray dalio i i think that's a book that gives you principle for how to manage your company and i i apply some of these principles uh at codiga number two is there a ceo you're following or studying um maybe that that one will be a little bit controversial um i like your brain armstrong history at coinbase uh the way manager company is all really principle driven and i like that number of things yeah that's great number three what's your favorite online tool for building the business okay maybe this one is really silly but something that helped me a lot is currently because you don't need to um to go back and forth with two or three emails and follow all this email about finding your time family is simple one link and you you schedule a meeting you got it and number four how many hours you sleep to eat every night uh not enough uh five or six hours and what's your situation married single kids uh i mean look at how i'm dressed it's obvious i'm single okay not married got it and any kiddos or no no no kids and how what are you julian i'm 38 38 last question something you wish you knew when you were 20 um network more network more build your network at the end of the day for example for fundraising people are going to invest in you because they know you because they believe in you build your network um always stay out outside of your comfort zone it's something that is really important guys he was at aws at twitter as an engineer launched and sort of took the took the jump in 2021 to launch codeiga.io think about it like when you open a gmail and you reply to the gmail and it suggests a bunch of things you should write back he's effectively doing that for writing code so that junior developers can write code much faster he's not focused on monetizing right now because he's raised a bunch of money 2.1 million pre-seed round at a 10 million valuation he won't confirm that but i know it's accurate 10 million valuation uh he's got about 50 paying customers from 15 000 uh total trialing users doing about caught 15 000 bucks right now and monthly recurring revenue again but not necessarily looking to monetize a big product launch coming up wants to get a lot of freezers first then monetize he has plenty of runway burning fifty five thousand dollars a month right now in revenue julian we're rooting for you thanks for taking us to the top thanks 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 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 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