Conveyiq Revenue, Valuation & Funding (2019)

hello everybody my guest today is danielle weinbach she's a lover of efficiency builder of products that improve how organizations hire she's a harvard dropout vegan lover of podcasts and behavioral science and a classical pianist danielle are you ready to take us to the top sure okay very good so now do you play piano while listening to podcasts or no uh that would be an interesting way to start my day but typically i do not do that but uh interesting fact the baby grand piano that i grew up playing is actually in the lobby of our office here in new york city oh how cool okay so let's talk about that what is you are what company are you building and what do you guys do how do you make money sure so i built a company called convey iq and we basically automate all the manual arduous tasks that recruiters have to do to hire great talent so any type of communication screening scheduling our technology is able to automate through both ai as well as text messaging emailing so it's an efficiency tool for talent acquisition teams very cool and i want to get more of the backstory but first give me a general sense of the space you're playing in so average customer is going to pay you about what per year to use your technology yeah so upwards of 50 000 per year so enterprise yeah okay were you always enterprise or did you kind of follow typical sas model where you're kind of smb then mid-market then upsell into enterprise yeah i would say that most of the companies that really benefited from using our platform were companies that hired a high volume of applicants so perhaps unlike the typical sas model we were always mid-market to enterprise versus starting off with smp interesting and give me paint that picture when the customer that signs up with you at 50 000 a year how many what's their team size today how many are they going to hire typically yeah so most of the companies that work with us have 100 or more positions open okay um they team sizes can vary based on what they prioritize but we work with companies that are as large as nbc universal which has quite a large recruiting team to companies like warby parker that are looking to staff their retail stores all over the nation um so the recruiting sizes can can vary on the teams interesting okay danielle peel back your history here when did you launch this company what year uh so i launched the company officially in 2012 but uh my story is a little unusual because i met my co-founder actually in harvard square i was about to be a student and he was the developer and he basically said to me you're a hustler i'm a hacker let's build a business together uh so i ended up wait wait hold on so like i spend a lot of time at harvard square i mean were you guys literally just like walking there or you're playing ping pong near the architecture building like how did you actually like collide that's a great question uh so there used to be a bar in harvard square called presidency now we know we're getting to the story here we go and uh and he came up to me and he said my uh my friend and i have a bet going on you either go to the education school or the business school which one that's a pretty good that's a pretty good first line so uh so basically we we bonded over the fact that both um of we both had parents that were entrepreneurs so my mother had started one of the first home healthcare companies in the 90s and then his father had started a tech company in the 90s as well so we were talking about our family history and he's like what is your aching problem right now and i have been doing a lot of recruiting particularly for diverse candidates as you can imagine being a woman who was in male dominated fields they always make you the face of diversity of recruitment who were you recruiting for though were you like interning at a bigger company and you led recruiting for them or what yeah great question so i actually started off my career in mergers and acquisitions in oil and gas but i loved my job and because i loved my job so much they made me i guess the face of trying to hire women to join investment banking and so i was working in oil and gas well in mergers and acquisitions investment banking in general okay um so i would go to campuses and try and recruit you know pretty much everybody but predominantly they wanted me to be the face of gender diversity and invest in banking uh so i learned a lot about the recruiting initiatives what people cared about what it meant to interview how do you handle high volume recruitment and so we had these huge resume books and you would flip through them and you really couldn't tell the difference between the people's resumes and then you would meet them and know in the first few minutes of meeting them that they weren't a right fit so i initially launched a company um called take the interview back in 2012 which was all about screening those candidates more efficiently using video technology you were a freshman at the time uh no i was in my uh my first year of my mba program so first year yeah okay so you had already done kind of four-year college and then you were a first-year mba you run into this guy at the bar in harvard square he says what's your biggest problem you say this and how did you guys just split it like 50 50 or what uh we did but really impressed are you guys married today now we are not married but we're very very good friends and uh he so in the initial stages before we raised uh capital so i ended up raising about a million want to see capital in between in between my first and my second year at hbs dropping out of hbs and then launching the company in new york but the first 25 000 of friends and family money that went in was his capital and then i put in 25 000 of my own money and that's really what kicked us off and how much today how much race to date so we've raised a little over 18 million in venture capital today that's what so series b series a yeah so we just uh completed our series bay congrats and so what was that for the like the full 17 or did you do a smaller round before that uh no we did a smaller round before that so the total for the series b was uh about 12 and a half million and all equity or did you pile on kind of some venture debt on the back end no we haven't done any ventured at interesting okay very good and then and then okay so you launch in 20. so take you said take the interview or take the exam or the interview was that the first iteration of this or was that an old cap table that company's done and you relaunched no so great question again uh so that was the first iteration of this so i actually have 150 companies that still they utilize what was take the interview so that was the digital interviewing screening platform that's how we launched our our i guess our first foray into the talon acquisition technology industry and so we were really successful with the digital interviewing platform but the problem with digital interviewing is that it only solves one specific pain point and that's being able to be more efficient in screening high volume candidates sure so about two years ago when we were thinking about how do you expand the value proposition of what we do how do you still continue to deliver value to your existing clients but how do you help them be more efficient across more positions and how do you attract other organizations to want to work with you to solve their problems you know we recognized that there were still a tremendous number of uh i guess activities that our recruiters were doing that were incredibly time consuming yeah by the way i i totally get the pro we just had colin day on actually with isims and there was a big merger there with recently business so like i totally get the problem you're in a very hot space there's a lot i mean it just makes complete sense i just i want to get kind of more of the story here so 22 you you get the initial idea 2012 you start really scaling it you raise some capital you guys put in a you know 50 grand of your own money how many customers have you scaled to today yeah so we have 150 customers in total okay can i so can i mean can i take 150 times a minimum 50 000 acv i mean you're doing what 600 grand a month right now or north north of that in run rate uh it was it's a little less than that because remember the first product was at a lower acv um but yeah i mean like you're you're in kind of the range of what we'll be doing this year in terms of rate revenue can you share what you finished last year was it like 400 a month or 500 uh uh am i supposed to i'm supposed to share private company revenue no no but i'm just the reason i do this is i'm multiplying numbers you you already gave me and they're not and they're not what the actual numbers are so i'm just trying to get a little bit more direction to clear the to clear those up so it's yeah that's all you and you can give a range i mean that's fine i'm just trying to get a general sense so it sounds like you want to hit kind of you know a seven million eight million dollar run rate this year um and i mean maybe what you finished at like three four give me a range of what you finished last year at yeah so uh so last year around three million and then this year uh we do think we'll end up doing between five and six million and do you anticipate most of that coming from expansion revenue across the base you already have or new logo ads all together uh both but uh a lot of the revenue we generated from this new recruitment automation platform was driven by expansion so um so our renewal rates are really strong like how are they talking like 130 net revenue retention um i think this year we could hit around 115 150 net revenue retention because the value of what we deliver to our existing client base is so much stronger um i think it it could be in that range but you just be clear you are north of 100 over the historical 12 months correct uh we were 100 okay good so just to be clear your churn revenue was more than made up by your expansion revenue yeah you got it that's great that's great and you obviously were in a great position in terms of growth to be able to go out and raise what you raised i'm assuming at a valuation that wasn't any kind of down round so if you finished last year at kind of the three where were you before that were you kind of doubling year over year prior to that um so we had so we we were doing around like 50 60 growth year over year in the very beginning because remember digital interviewing is a very specific pain point so i think if we were if we were the platform that we are today previously uh if you ignore the fact that still people are getting accustomed to how you incorporate ai and automation into the process i do think that we would have been doing 100 growth but we were historically doing 50 to 60 that's still healthy danielle i mean that i mean that's still healthy growth yeah i think so we had we had one year that was a little bit slower as we did this pivot and then now this year we're looking at you know approximately you know 70 to 100 yeah that's good so just try and quantify that i mean it sounds like 12 13 14 months ago maybe doing around 200 grandish a month which would be about 2.4 ish run rate you finished out last year at kind of a three three and a half run rate and you're hoping to really grow that over the next 12 months to call it five six something like that yeah if we hit five million uh this year and like total contract value i'd be really happy that's all that's very exciting okay uh flesh out the team for me how many folks yeah so we're about 40 a little over 40 right now and i have two offices okay uh new york and where uh new york and belgrade why belgrade great question uh so the first cto that we brought on uh he had worked with two amazing serbian engineers previously uh and so we've always had a hybrid team since the very beginning so he wanted to hire here in new york which we do and then we also wanted to hire in serbia and then you know fast forward right before we raised our series a uh we had about eight engineers that were in serbia and so i actually flew over to belgrade to check it out and you know they wanted to get an office they wanted to work together as a team so we found an amazing office and now we've earned that team i think in that office right now we have 22 people oh wow how cool how cool okay last question here because we're out of time and i'd be respectful of your time as well how aggressive are you being in terms of customer acquisition cost so if someone signs up today at 50 grand a month how much you're willing to spend to get that customer or 50 grand a year um you know i would say we're pretty efficient with our customer acquisition cost we have we don't over spend on marketing um so i mean would you spend the full 50 grand to get a 50 you know a dollar and a dollar out in terms of ar um yeah i mean that that's a pretty healthy sass company if you can get a one-year payback but i have to run the numbers i would not say we're at 50 000 pack right now i would say we're below a 50 000 cap so okay so less than a 12-month payback right now yeah i mean it's assuming again it's a new product so we just launched it last year we did really well particularly with existing clients so it's still you know your ltv is something you figure out over time you have to iterate to figure out exactly what that will be um but i would suspect that we'll probably get to a one-year payback if not less that's great all right danielle let's wrap up with the famous five rapid fire here number one what's your favorite business book uh oh that's a great question um uh i don't know what's the last one you read do you remember uh yeah well i'm reading right now sales acceleration formula by mark roberts that's a good one i love start with why by simon sinek um i mean there's just a tremendous number of books that i read tools you know tools and titans i love with tim ferriss that's on my nightstand right now um i just can't pick a favorite that's okay we'll do sales acceleration for now this is what you're reading um number two is there a ceo you're following or studying um well i was just actually trying to get an introduction to brian halligan the ceo of hubspot i'd love to meet him because i think there's a lot of analogies between what we're doing for recruiting and what hubspot did for sales and marketing number three what's your favorite online tool for building the company a slack so yeah obvious that's a good one number four how many hours of sleep to get every night uh six and what's your situation daniel married single kiddos uh single but very happily uh i guess in a relationship okay good so no kiddos do you mind me asking about how old you are uh i'm 35 35 very good last question take us back 15 years what do you wish your 20 year old self knew oh take more risks um i think i lived a pretty cookie cutter alive up until i hit 26 27 and decided to start this company i wish i knew that everything would work out the way it was meant to work out in my early 20s and to stop worrying so much about what other people thought about me or what i should be doing i think following your true north or your authentic self is the best way to live your life guys convey iq founded back in 2012 a year ago doing 200 a month in revenue now up to call it 300 350 grand a month in revenue as they expand helping 150 enterprise clients recruit more effectively and more efficiently they're now signing people up at 50 000 acvs they're typically companies with more than 100 positions open like mbc universal et cetera they just raised additional capital 18 million bucks in the company to date obviously burning to drive growth team of 40 in new york city and belgrade net revenue retention north of 100 and they're honing in their payback period right now but definitely less than 12 months danielle thank you for taking us to the top thank you have a great day