How Coralogix Hit $12M ARR and 2,000 Customers in 2021 (Interview with CEO Ariel Assaraf)

Introduction and Israeli Intelligence Background

Nathan Latka

00:00Hey, folks. My guest today is Ariel Assaraf. He's had a career in the Israeli intelligence unit of 8,200 and later joined Verint Systems to work at the Homeland Security Decision and cofounded coralogix in 2015 to change how companies analyze their data from index, then analyze, then analyze to index and go back and forth on what matters. Ariel, you ready to take us to top?

Ariel Assaraf

00:20>> Thank you very much, Nathan. Great to be here.

Nathan Latka

00:22As I say, ex Israeli intelligence, you know, Monday, Roy Mann, Chorus, I feel like you all, you just know something we don't.

Ariel Assaraf

00:30>> It's interesting, actually. I think there was a research now in Israel that showed where most entrepreneurs come from. I think there are three specific units. There's 8,200, there's 8,100 that came out of shadows recently, and there's pilots. So in our company, we have a mix, and in our board, we actually have 80% of the board members are pilots in their past. So I guess there's something when everyone has to get enlisted to the army that kind

01:01>> of ranks people on what they like to do and should do in life when they're 18, which makes decisions easier.

What Coralogix Does: Observability and Data Analytics

Nathan Latka

01:07That's amazing. All right, so let's jump into coralogix. What are folks paying you for today?

Ariel Assaraf

01:13>> Yeah. So the thing is, if I take a little step backwards, the observability space, logging metrics, security, tracing, it started about almost twenty years ago, or really started to explode almost twenty years ago when Splunk took it from the appliance sort of approach to actual software and then software as a service with the concept of let us ingest all your data, we'll index it, we'll store it, we'll become some sort of Google for your organization or

01:43>> for your operations or for your security. And it worked great because the amount of data twenty years ago was something that can be handled like that. And with time, we're seeing data growing exponentially. What we tell our customers and our investors in the previous round was data grows faster than revenue. So, you'll see any company you're covering, you'll notice, like, you'll ask them and they'll give you the most

02:10>> insane KPI of growth. You ask them how much did their data grow during that time, observability data, there'll be like five, 10x. What happens is that data and observability tools are part of your margins or part of the, Basically, they're part of the unit economics of an organization. As data grows faster than revenue, it becomes hard to manage, super expensive, hard to scale, performance issues start to rise. So, we started a company almost seven years ago,

02:38>> but we didn't start where we are today.

Nathan Latka

02:402014, right?

Zero Revenue Years 2014 to 2017

Ariel Assaraf

02:42>> That was end of twenty fourteen.

Nathan Latka

02:44And

Ariel Assaraf

02:45>> we started with a lighter version of Splunk, that like a cloud, cheaper Splunk. But with time, things started evolving and we saw that customers aren't looking just for a solution that can do whatever the others can because their model started to break. Cost containment was impossible, performance was an issue. And then we kind of decided after three years of basically doing nothing. So the first three or four years, the company was zero revenue, zero customers. It

03:16>> was almost shut down. So we were in

Nathan Latka

03:18So a hold on. So between 2014 and 2017, no revenue.

First Revenue and Near Shutdown in 2017

Ariel Assaraf

03:22>> The first dollar came in October 2017, and we actually had a board on September 2017 where there was a decision point where the board members said, We like you guys, they were super nice and patient.

Nathan Latka

03:40How much had you raised to that point?

Ariel Assaraf

03:43>> $2,000,000. It was Wait, didn't

Nathan Latka

03:46you do a $5,200,000 seed though in 2016?

Ariel Assaraf

03:50>> No, not five point two million dollars. It was a million, then another million. I see. Okay. And then they kind of wondered whether they should just close the company and hand out the money back to the investors. But there was so little that they decided not to because it doesn't really matter.

Nathan Latka

04:11Much how much was in the bank 2017 before you shut down or thought about it?

Ariel Assaraf

04:15>> $100,000 Wow. At the end of twenty seventeen were five people. Wow. So I was I'm one of the co founders, but I was not the CEO. The CEO left at that point. And

Nathan Latka

04:26How much equity did you own at that point?

Ariel Assaraf

04:29>> It was you know, we just had a couple rounds, so it was it was still fine. And then the CTO that was an employee left after him because, you know, the company kind of fell apart. So he went to manage a group, this big company. And Yoni, a good friend of mine who also led a group in Verint, basically became the CTO, became my co founder, and we restructured the company entirely. And we started running from

04:54>> that point onwards, and within the four or five months, we got to like 20 to 25 thousand dollars of monthly recurring. So, the board was

05:07>> very surprised because they thought they're going to shut down the company. And they gave us $2,500,000 more, like an extension, like a CLA. At valuation?

05:19>> The valuation back then was roughly $10,000,000.

Nathan Latka

05:22Okay. Got it. So you sold 25%.

2019 Acquisition Offer and Decision to Stay Independent

Ariel Assaraf

05:25>> Yeah. So we started running the company and ended that year at like a bit over 1,000,000. And then something interesting happened. We got an acquisition offer and that was for a few tens of millions. In 2018? That's beginning of twenty nineteen. We were really considering because we

05:52>> had so much trouble getting this off ground and people in the board and in the company started to get tired because we were only seven, eight people back then. So we got into a point where we had an S like an SPA in our hands.

Nathan Latka

06:09What does that stand for? Is it like an LOI?

Ariel Assaraf

06:11>> SPA is Shares Purchase Agreement. No, it's it's all the way to the actual signature.

Nathan Latka

06:16Oh, yeah. Okay.

Ariel Assaraf

06:17>> That is the definitive agreement. Yep. Was '29. And at that point, getting a few million dollars looked like, when I thought about starting the company, for me, that was an ultimate outcome. Then we're fortunate

Nathan Latka

06:33Wait, wait, Ariel, sorry. I don't mean to keep cutting off, but take us in your head actually at that point. You're 29. How much of company did you own at that point?

Ariel Assaraf

06:40>> I'm not sure I can share percentages, but a decent percentage Okay. Okay. I I could have taken a few a nice amount of millions.

Nathan Latka

06:45Can you give a range of, like, between 10 to 50%? Is that a big enough range? Yes. Okay. Fair enough. And the offer was for in the tens of millions. So, like, it was, like, $30 to 40,000,000.

Ariel Assaraf

06:53>> Low tens. Yeah. Yeah. Low tens. Not 9,100.

Nathan Latka

06:57So

Ariel Assaraf

07:00>> we were actually fortunate to be at that point because not many people get to Everyone says, I want to grow a big company. I don't want to sell, you know, and then the acquisition offer comes and now you're sitting in front of something that is real. And we were actually there to look at how it'll feel like just signing a piece of paper and receiving a few millions of dollars. Then me and Yoni said, we actually

07:25>> don't want to do that. We have a lot more to do. So I went to one of our board members at stage one and I said, listen, I know there's going to be a board meeting next week to approve the SBA, which means this is a definitive agreement. I need your support on this. So he said, listen, I'm part of the committee that ran this deal. So what I'll do, I'll resign from the board and resign

07:49>> from, I'm sorry, resign from the committee, and then I'll be able to do so, which was a little bit dramatic. And then he said, And what's the alternative? I mean, the company is, know, bear in mind, we don't have money in the bank at that point. So I call a friend of mine from Aleph VC, Aaron, and I say, listen, next week we need to decide on an SBA. I know you know the company. Here are

08:14>> the numbers. And I text the numbers on WhatsApp.

Nathan Latka

08:17What were they, by the way, high level?

Ariel Assaraf

08:18>> Back then it was like 1,400,000 a year maybe or so. That's mid-twenty nineteen. So like after the acquisition offer, it took a few months to get to the SBA. And then what happens is that he tells me, you know what? I think we'll make an offer. And I said, okay, so when can you make it? He said, you know, I'm coming back to Israel next week. Let's meet my partners. I said, listen, man, there's there's a

08:44>> meeting Monday. It's Tuesday now. I need to to get it. So he arranges his partners in this room in New York. We barely hear each other. Thirty minutes we speak. And then he says, you know what? Going to send you an offer. And he sends the offer again on WhatsApp like this one, two, 34 or 5. And I said, Can I bring this to the board? Because, you know, they're going to turn off an offer that

09:08>> that's going to make like a nice income for everyone, even though even the ones that got in and 10,000,000 will make make.

Nathan Latka

09:13Yeah, they're still 3 to 4 x, right? Yeah.

Ariel Assaraf

09:16>> And he says, tell the board that we are 100% behind it. We're not backing off no matter what we discover in the due diligence, which was very ballsy. And then

Series A from Aleph VC and 2019 Growth

Nathan Latka

09:27what was the what's out? This was a $10,000,000 round at what valuation? The same

Ariel Assaraf

09:31>> acquisition $10,000,000 round, the same valuation of the acquisition offer. So we make it apples to apples with some nice restructuring the cap table because back then there was already because of the bridge loan. So all that 2,500,000, that was it.

Nathan Latka

09:46That was a loan.

Ariel Assaraf

09:47>> Yeah, yeah. It was a silly. It converted together with the the round. Okay. And we took that that that offer and we signed that in. It was like summer of twenty nineteen. And he told me after that, that conversation, listen, this is going to be the the hardest round you've had because you guys had such a hard time. Now you finally have an actual company and things are really running well. And then Just

Nathan Latka

10:17to be clear, I mean, is kind of incredible, $1,400,000 in ARR and you got the 10,000,000 raise done, I think what, like a $30 to 40,000,000 dollar valuation. So that's a pretty high multiple, right, for a company that was struggling back in 2015.

Ariel Assaraf

10:31>> You know, I see companies today raising 20,000,000 seed rounds at a 100, so I don't know. I don't know anymore. But back then, it was it was a nice sleep of leap of faith. Yeah. So actually, we ended that year at double. Within four or five months. That was great.

Nathan Latka

10:52Wait, what do mean by that? You ended at 2,800,000 run rate in December 2019?

Ariel Assaraf

10:56>> Yep.

Nathan Latka

10:57Okay.

COVID Impact and Stalled Growth in Early 2020

Ariel Assaraf

10:58>> And then we started growing really nicely, but then COVID hit really bad. Yep. That was beginning of twenty twenty. We actually opened so we everything was inbound and word-of-mouth. We didn't have any salespeople. We hired a first sales team in New York, and I went to meet them in New York on the 03/10/2020. Had a training and onboarding. I went back home and everything locked down. In Israel, in The US, everything locked down. No one would

11:30>> take our calls. No one answered emails. Everyone was shocked. New York became hell. So my team, part of them were not available. It was a mess. It took us four or five months to get out of the shock and it started growing again. Four or five months, we were literally stuck. Nothing moved, no growth.

Nathan Latka

11:51Then- What were you stuck at? I mean, you're talking like what, a $8 to 9,000,000 run rate?

Ariel Assaraf

11:55>> 3,000,000.

Nathan Latka

11:553,000,000 still. Okay.

Series B Raise and Streamer Product Vision

Ariel Assaraf

11:56>> 3,000,000. Yep. And then what happened is that in June, I met Red Dot and OG Tech, two growth companies, growth VCs here in Israel and told them, Listen, I know the numbers don't look really well, but we're going to launch Streamer. And I explained what Streamer is. And that was critical because Streamer is basically what we started working on ever since we gotten that CLA beginning of twenty eighteen, which is flipping how the ingestion pipeline looks

12:31>> like. So everyone index all the data and then they analyze it. So they run periodic queries on the data, they run the aggregation on the storage, they run the dashboards from the storage, which makes it expensive, slow, and limits the level of analytics that you can provide. I told them, We're launching Streamer, which will analyze everything in real time, including stateful things. So even though it's real time without storing the data, I can tell you that

12:55>> something happened that didn't happen in the past three months. So that is something that doesn't exist today in the market at all, is stateful streaming. And that will lead what I explained, that will lead to cost reduction, better performance, easier customer acquisition, and broaden our use cases from logs to logs and metrics and security and traces in the future BI, and also decouples us from the storage so we can use any syntax, any dashboard. So coralogix

13:23>> today can use its own dashboard, but many others. I don't know if it's very common, but Kibana, Grafana, SQL clients, Tableau, anything can plug to coralogix. So now it's a data platform play, it's not just the product. And it's a hard thing to explain to an investor, not to mention when you're not growing, but they actually believed in it. We didn't do a round, they just said, Okay, we're in, we got a couple offers, we went

13:46>> with these guys, we got a $25,000,000 check.

Optimizing Round Structure over Valuation, and ESOP

Nathan Latka

13:51Well, what was the initial so I want to understand, again, head a bit more. So you tell the story. You got to sell a vision. Any there's a startup founder has to do that, You get the offer at some valuation. What was the initial offer? And then were you able to drive the valuation up, create some FOMO at all or no?

Ariel Assaraf

14:05>> So actually, one thing that we've done in both that round and this one after was not go after the higher the highest valuation even when we got it, but to optimize to the structure of round that we felt that is the best for us. So who gets to put how much? How does the board look like? What are the expectations from the company? What's the expectation from the end of the year? How many board meetings we

14:31>> have? What advisors we bring? How much ESOP we leave? And that, you know, I think Wait.

Nathan Latka

14:37That one I'm curious on. How what was the ESOP pool you set up in this round? Series b.

Ariel Assaraf

14:41>> After series b, so there we I think we left 8% clean ESOP. Okay. After series a, we left 13% clean ESOP. That we as founders did not take. So the thing is that I think because of the scars we had when we founded a company and all the hardships that we went through, we understood that for us succeed, what we need most from our investors is patience and believing in our vision, because this is a You're

15:09>> a tiny company, you're trying to fight Splunk and Datadog and other companies are tens of millions. You don't have a patient board that can understand technology and go a long way with you, You know, let me put it this way. If if our seed round was with like an American top VC, we would have shut down for sure. Like they shut us down. They won't even ask. So we understood that this is the most important part.

15:34>> Ever since then, that round closed roughly November 2020.

Nathan Latka

15:40And what valuation was that? About a 100,000,000?

Ariel Assaraf

15:42>> Roughly 100. We've done

Nathan Latka

15:44That's post money, right?

Ariel Assaraf

15:46>> That's post. Yeah. And we've done more than than almost four x ever since.

Nathan Latka

15:53So the round you just raised was 55,000,000 at, like, a 400 ish post.

Ariel Assaraf

15:57>> That's what's published in TechCrunch. It's it's it's around the number.

Nathan Latka

16:01TechCrunch always get they get shit wrong all the time, though. I'd rather just hear it from you.

Ariel Assaraf

16:05>> It's like it's interesting because we we actually did not disclose any valuation of them and said that we cannot disclose, but they guessed, which was roughly around the numbers that we didn't care too much.

Nathan Latka

16:17I mean, look, most of the stuff is pretty standard. You're selling a certain percent in most rounds, but I like talking to founders where they do something creative with the rounds. For example, if a big chunk of the 55,000,000 was secondary, so you could retain early employees that really wanted some liquidity, so they'll with you longer. Did you do anything creative or was it very standard?

Ariel Assaraf

16:34>> So a couple of things. First

Revenue Growth and $12M ARR

Ariel Assaraf

16:38>> of all, when I said four x, I meant our revenue more than four x, not just

Nathan Latka

16:41So it's about $12,000,000 in ARR then.

Ariel Assaraf

16:45>> I think the the

Nathan Latka

16:46No. Wait. Arrow, come on. 12,000,000 ARR. Right? That's 4 x 3,000,000.

Ariel Assaraf

16:50>> That's roughly the number. Again.

Nathan Latka

16:52He won't say it. Look at this. This is great. Alright. That's great.

Ariel Assaraf

16:55>> Think about 8,200. You remember, Nathan.

Nathan Latka

16:57Yeah.

Ariel Assaraf

16:57>> Yeah. So

Nathan Latka

16:59I can never crack the Israeli. I can never I can crack most founders. Ex Israeli defense, you guys are the toughest shit, but you let's figure out a way. You know?

Ariel Assaraf

17:08>> So I think by the way, the round was was June. If I had to guess, we since since June, we've almost doubled. So I mean Revenue. Yeah. So I mean, the the valuation should be higher if we were to raise around today, but we have a lot of cash. I don't think we'll go to a round very soon.

Nathan Latka

17:25You're past $24,000,000 in terms forward looking run rate than right now?

Ariel Assaraf

17:29>> We have a decent runway that can fit a bigger company than what we are for

Nathan Latka

17:36You did more than $2,000,000 in revenue last month.

Launching Security with Bundled Consulting

Ariel Assaraf

17:40>> I can't confirm or not confirm. So we are at a point now where we're starting to really broaden the opportunity and the offering. So we're saying, you know, we have this technology that can analyze in real time without storage. Why stop with observability? Why stop with logs? We started doing security now. We're launching a security offering, very powerful, including professional consulting, including cloud posture and other things that

Nathan Latka

18:12Wait, Ariel, tell me more about that. Most VCs would hate the word consulting, but I know some of the highest net dollar retention founders tie on consulting to their stickiest customers. How are you structuring that?

Ariel Assaraf

18:21>> So the thing is that it goes with the product, just like CrowdStrike has consulting and PS, but we're not talking about a service that will go to customers outside the coralogix ecosystem. A customer that buys a certain amount of data in coralogix will get, without paying per hour, he will get an expert helping him onboard, helping them define the right criterias for security alerting, help them build their incident response strategy. Those are things that we're seeing

18:55>> that are a huge gap in the market. Just companies really, you know, one of the questions, so one of our advisory boards is Yuval Cohen, he used to be the CISO at ServiceNow for a few years. And he's asked a question on his LinkedIn that I really connected to before we started this, and the answers were remarkable. So he said, How much did you increase your spend in the past two years on security products? And it

19:24>> ranges between four to 10x. And then how much more secure do you feel in your organization? Like, how did you improve your security posture as an organization? And most answers are not like none to a bit more because these tools, they produce a lot of insights. I don't know what to do with them. I don't know how to defend myself. There's a huge gap of information and there's a gap of knowledge. So this is where we

19:51>> fit in to help our customers actually make the best of the product. Now, if this is just observability and logging, there are many people, DevOps and platform engineers, really know this. But now as security becomes part of the DevOps and platform team's responsibility, these guys just don't know security. So everyone talks about DevSecOps, but there aren't really many DevSecOps engineers. Many of them are just DevOps engineers that got a new responsibility to secure the cloud. So

20:21>> this is where we fit in.

2,000 Customers and Customer Tiers

Nathan Latka

20:22And so how many customers like that are paying you now today?

Ariel Assaraf

20:25>> It's over 2,000, right?

Nathan Latka

20:26How many total?

Ariel Assaraf

20:27>> 2,000 customers are paying us, but this is the current platform. The security product has five customers, two of them are some of the biggest companies in the world. So we are actually aiming this offering for larger companies that have bigger infrastructure or migrating to the cloud, unlike our cloud native and Internet play for the observability stack.

Nathan Latka

20:50Let me stick on this for a second, the professional services question. If you have 2,000 customers today, what are they paying you per month on average on the SaaS side? And what are the professional service like setup options?

Ariel Assaraf

21:00>> So today there's no professional services at all. They'll all go for security. So today it's all SaaS, there's full We have one client that is semi on prem and not SaaS, and it's just because the amount of data they produce is not something that any cloud can handle.

Nathan Latka

21:17And what's the average customer paying you per month right now to use the technology, the current technology?

Ariel Assaraf

21:23>> You

21:24>> know, it really ranges because there are so many zero touch customers. The top 100 are, roughly at a eighty, eighty five ACV.

Nathan Latka

21:32What's the most don't name the customer. Your biggest customer pays you how much?

Ariel Assaraf

21:36>> A million dollars a year.

Nathan Latka

21:37Okay. So you do you have multiple accounts at a million a year or just one?

Ariel Assaraf

21:40>> We have 25 accounts over a 100 k, 5 accounts over 500,000.

Nathan Latka

21:46Okay. So 25 accounts over a 100 k and then five accounts over 500 k and then one over a million. Yep. That's a bit okay. That's great. The one where have you had success driving the upsell? What are you upselling against to get someone to go up to a million dollar ACV?

Multi-Product Upsell and Net Dollar Retention

Ariel Assaraf

21:59>> Yeah. So, you know, first of all, the the growth of data, like I mentioned, is exponential. Even though we're super efficient, we have so many ways to to reduce costs because we help customers prioritize data by use case and then they pay less and so on and so forth, there's just data growth. And we have other offerings that customers buy. So, a customer would start with logs and then they'll buy metrics and then they'll buy security,

22:21>> in the near future, they'll buy tracing. So, we expand like this on multiple products. Think this is a game that Datadog played really well. They have nine products now and they upsell and cross sell all the time. It also gives the customer a sense of unification of data because people want to see everything in the same place, the same dashboard.

22:43>> It helps drive both the gross retention and the net retention.

Nathan Latka

22:49What is your net retention today?

Ariel Assaraf

22:51>> So since the beginning of this year, over 130%.

Nathan Latka

22:54130 and peel back that onion. So there's gross and then expansion. What was gross churn and then what was expansion?

Ariel Assaraf

22:59>> Gross churn this year, less than 2%.

23:01>> Total. That's incredible.

Nathan Latka

23:02So expansion per expansion was like 32%, something like that.

Ariel Assaraf

23:07>> Roughly.

Nathan Latka

23:07Wow. That's pretty okay. That's very impressive. What's the team look like today? How many people?

Team Size, Engineers, and Hiring Plans

Ariel Assaraf

23:12>> We're just a 100 people. We just reached a 100 people exactly. The interesting fact is that exactly two and a half years ago, we were eight, so the company is growing really fast. And I think a year from now, we'll cross the 200 people mark. I think this company basically is a company that started in January 2018. Think about it this way. So we had like four loss, three and a half loss years. And then in

23:35>> January 2018, the company started and that gives, that shows a different life. You see the graphs of growth, it's like this and then just boom.

Nathan Latka

23:42What's more impressive to me is that, you know, I always look at sort of unit economics, right? If you've got $24,000,000 in revenue right now, 100 people, that's $240,000 in revenue per employee, which is almost triple what the average private VC backed SaaS company has. I'm sure you're hiring like crazy right now, so that number will go down as you invest in growth.

Ariel Assaraf

23:58>> We're hiring a lot more, we're doing more marketing. This is just a result of our history, you know? You tend to not be a used spender when you experience four years having zero budget and almost shutting down a company.

Nathan Latka

24:13How many engineers on the team?

Ariel Assaraf

24:15>> The the largest group is engineering. Over I think almost 70 engineers.

Nathan Latka

24:19Seven engineers. Interesting. Okay. So what's the next move? I mean, again, it sounds like you almost doubled over the past like four months in terms of revenue. You know, this is a fast growing company. Obviously, Salesforce failed to get the Datadog deal done. Are you in acquisition talks right now with Salesforce?

Ariel Assaraf

24:33>> I am not. I actually mentioned that Salesforce, I think, will get in our space some way, somehow, and I think Influent will also step into the observability space. I think also Snowflake will get there because it just makes no sense for companies that control a lot of data and charge data to not get into the space that produces the largest amount of data and the users have the biggest checks in the organizations now, which is the

Not Selling: Acquisition Talks and Growth Plans

Ariel Assaraf

24:57>> R and D and platform teams. We are not thinking acquisition now, we already rejected an acquisition. Our goal now is just to grow the company. Have, like I mentioned, a pretty decent runway and a lot of freedom to grow and expand and build more products and more offerings. With the valuations currently in the VC market, there's no real urge to go ahead and sell the company. And by the way, to your question regarding what have we

25:26>> done creatively with the money in this round, we actually cleaned up a lot of the cap table from the older investors.

Nathan Latka

25:30Tell me more about that. How did you do that?

Cap Table Cleanup and Secondary Transaction

Ariel Assaraf

25:33>> You you set a preemptive. We gave a good deal. People that felt like they're going to lose their money a few years ago suddenly found out they were at twenty, twenty five x and many sold, and that made the cap table a lot cleaner.

Nathan Latka

25:47So that's what you basically said, Hey guys, we raised 55,000,000. We can spend x percent of this to like, buy out early folks and the price we're gonna offer to

Ariel Assaraf

25:54>> buy it out is 20.

Nathan Latka

25:55On top of the 55.

Ariel Assaraf

25:57Say that again?

25:57>> On top of 55. We didn't count inside the round.

Nathan Latka

26:00Oh, okay. So what was the total round size?

Ariel Assaraf

26:03>> I can't remember the exact number, but this is the 55 is the amount of money that we got into the company.

Nathan Latka

26:09Yeah. I know, but I wanna know what the secondary part was to clean up the cap table. To 10,000,000 or, Yeah.

Ariel Assaraf

26:14>> I finally need to guess 5 to 10,000,000. Okay.

Nathan Latka

26:16And and did early employ did you give the option to early employees as well who maybe wanted a little bit extra cash?

Ariel Assaraf

26:22>> That's interesting. Yes to, like, five people, zero. Well,

Nathan Latka

26:28you only had five or eight people for the first

Ariel Assaraf

26:30>> five Zero

26:32>> zero accepted. No one wanted.

Nathan Latka

26:34No one did it.

Ariel Assaraf

26:35>> No one wanted to sell. Actually, in the previous round, it was very interesting. In the a round, one of the employees brought a $100,000 from home and and bought.

Nathan Latka

26:45That was in the 2019 $10,000,000 round.

Ariel Assaraf

26:47>> Yes. And he's already made a very nice multiplier. I love that.

Nathan Latka

26:51Wait. So today, how much do employees own of the business? It sounds like 20%, some something fairly big.

Ariel Assaraf

26:57>> A little less than that.

Nathan Latka

26:59Yeah. Okay. That's great. We I mean, that's obviously a great way to keep now are new people that join today, are options something included in every offer?

Ariel Assaraf

27:06>> Every there's not a single employee from office admin to anyone in the company gets options.

Nathan Latka

27:12Yeah. That's great. Interesting.

Future Fundraising Plans

Nathan Latka

27:15I know this is going to sound crazy because you just raised $55,000,000 but if you've doubled revenue, I mean, are you raising right now?

Ariel Assaraf

27:22>> Probably not in the next five, six months. We wanna now we're really expanding the auto market team, creating more predictable sales model. We are focused ending this year where we wanna end it and then

Nathan Latka

27:36Which is what? Can you break 30,000,000 by December in terms of run rate?

Ariel Assaraf

27:40>> No. Probably not. Probably not. And and and then after q one, we'll look at, you know, results. We'll see where we're ending 2022 and maybe then think about a a growth round.

Nathan Latka

27:51Yeah. Really interesting. Anything else that you've done really creatively that, like, I just didn't think to ask about?

Ariel Assaraf

28:00>> No. It's just great great speaking to you, man. I get your newsletter so many times. So

Nathan Latka

28:04Oh, nice. You read that you read the the email?

Ariel Assaraf

28:06>> Yes. Speaking to the to the person behind it is is really cool.

Nathan Latka

28:09Why'd you agree to come on? Obviously, you know I'm gonna ask a bunch of data questions, which other founders appreciate. We learn from you. But why'd you agree?

Ariel Assaraf

28:15>> I I get the newsletter so many times. I got an email from you that looked personal. I just had to open it. And I said, I can speak to this guy sitting in my inbox for the past three, four years, then I might as well do that.

Nathan Latka

28:27Carol, you're like an OG man. You're like back in the day. All right. So, hey, so just to put a copper on this one, you turned down like, call it a $30 to 40,000,000 dollar back in 2019, if Frank at Snowflake or Salesforce come to you and offer you a billion dollars all cash upfront today, do you sell? This

Ariel Assaraf

28:45>> is a question to the board. If there's, you know, if there's something it's not my company, my friend.

Nathan Latka

28:50This guy always gives the right answer. Guys, I've tried so hard to catch him. I can't do it. I've tried. Alright, Ariel, let's wrap up with The Famous Five. Number one, favorite business book.

Famous Five: Books, Tools, and Lessons Learned

Ariel Assaraf

28:59>> So it's old school, but I really loved it. It's called Spin Selling. Woah, dude, Neil Rackham.

Nathan Latka

29:08That's like, no one remembers that book.

Ariel Assaraf

29:10>> That's very old school, but I've learned so many things from this. They basically tracked thousands of salespeople and differentiated between the successful ones and the non successful ones and exactly how the successful ones make it. I don't think sales changed over the course of the past two hundred years. It's still human to human interactions and it's always relevant. So this is one of the books that I actually quote so many times when we have meetings on

29:38>> sales and go to market.

Nathan Latka

29:39How does an 8,200 unit ex Israeli defense person come across Neil Rackerman's Spin Selling? Like a decades old book on selling. That's just I would never put those two together.

Ariel Assaraf

29:48>> I actually have no idea who recommended it.

Nathan Latka

29:52That is wild. I love that. Okay, number two, is there a CEO you're following or studying?

Ariel Assaraf

29:56>> Yeah, he's actually a friend and an advisor. So he actually gave me another very good book called, I think it's Predictable Revenue Model, something by Aaron Ross. That's Guy Bloch, used to be the COO for Splunk, and now he's the CEO at Bring, which he took from a small company to a post billion dollar valuation company within like two years. Brilliant CEO, one of the best that I've met, and we chat every once in a while

30:28>> and he gives me good tips on management and the whole world of go to market, specifically because he knows our market so well. And one of our advisory board members, Ronny Grushka, one of the most straight up, no bullshit guys that you've met. He's the founder of Marquette, IHS Markit, that got sold to S and P for 40,000,000,000 lately. Brilliant guy that basically is, know, he's not from our domain, but he's a mentor to how to

30:57>> become a good CEO and how to be to become someone who can actually build a company that is the size of IHS Markit traded in Nasdaq. So there there aren't many people who've done that, and he's great.

Nathan Latka

31:07Unique folks. Number three, besides your own, what's your favorite online tool for building coralogix?

Ariel Assaraf

31:13>> My favorite online tool for building coralogix. That's interesting. So actually, it's relatively new in our toolset. I don't know why we waited so long, but we just started using Monday heavily. And the great thing about it is that it's so versatile. So there was always like tools for managing R and D tasks and tools for sales and tools for marketing. Suddenly there's one from CS through marketing and it's so flexible the way that you can use

31:40>> it a thousand different ways that we found it to be super useful and helpful for the company to collaborate. So this is just like I said about companies wanting their data in the same place, you know, the logs, metrics, security, tracing, other events, and they want to correlate it. Suddenly when you can look at tasks end to end and you can see a task in R and D and when our CS writing the tutorial, when marketing

32:01>> or publishing it, our sales getting enabled, this is really helpful and one of the best products that I've used lately.

Nathan Latka

32:09How many people on your team do you have using Monday now? Is it across the whole team?

Ariel Assaraf

32:13>> We bought up, like, an all company license. Yes.

Nathan Latka

32:16That's incredible. Now was Roy also from unit eight thousand two hundred, eight thousand one hundred, or was he a pilot?

Ariel Assaraf

32:22>> I actually don't know what Roy had done in the army. I met him a couple of times. You know what? So that's that's one thing interesting to say about Monday. Roy Munn, they were already big. They were super successful, but he took, like, an hour and a half to sit together with me. He did he didn't know who I am. I just asked and he he sat together with me when the company was almost closing. And

32:45>> we sat about an hour in their office and he tried to help me to, you know, figure out what we're doing next.

Nathan Latka

32:52I love that. What a guy. That's a great story. Number four, how many hours of sleep do get every night?

Ariel Assaraf

32:57>> You can see in my eyes, actually.

Nathan Latka

33:00You know, doing bad.

Ariel Assaraf

33:02>> Roughly listen. I'm 32. Look at this dude. Why are you doing that? Roughly, I'd say three and a half, four hours. I also have a 2.5 year old daughter, so that's not great for sleep either.

Nathan Latka

33:16Wow. Okay. Married, one kid and 32. Yep. All right, Ariel, take us home. What's something you wish you knew when you were 20?

Ariel Assaraf

33:23>> Wow.

33:28>> Something you wish you knew when you were 20.

33:33>> I actually don't have a great answer to this. This is very interesting. So I'll tell you what I know now that I didn't know when I was 20. I don't know if I knew it, if it would help, or if I believed it, but I understood that there is no You're being pursuing success and pursuing whether it's, you know,

33:57>> monetary success or success, professional success is not something that ever reaches an end. Know, if you ask me at 20 years old, you can take $5,000,000 home, can take $10,000,000 home, I would say I'd retire. It seems like the more you have, the bigger your company is, the more assets you have, unfortunately, maybe the more you want. And it only accelerates your passion to things and your willingness to sacrifice. So you'd imagine at 20 years old

34:31>> that if you get to a certain point, you can lay back and chill and have more time, you know, friends, family, and relax. It's actually the opposite. And the more higher I get, you know, I meet CEOs and I mentioned a few people, the more higher you get, the harder they work and they are less tending to enjoy their time and just chill. So that's one thing that I've learned. I always thought that there's going to

34:55>> be a race and, you know, everyone say I'm going to be a millionaire by 30 and basically retire. And when I had that chance at 29, I gave that up, and I know that now I work much, much, much harder than I did.

Nathan Latka

35:09Guys, Ariel Assaraf, coralogix, from 2014 to 2017, they had no revenue despite raising $4,500,000. First off, revenue late twenty seventeen, broke a million in revenue 2018, then scaled to 3,000,000 in 2019 and turned down a $30 to 40,000,000 acquisition offer in exchange, RaisedVC has now raised another 25,000,000 series B at around a 100,000,000 valuation, another 55,000,000 recently with secondary on top of that to clean up the cap table. Now working with over 2,000 customers as they really think

35:36about how to re engineer this sort of space that he believes Influence, Snowflake and Salesforce will all get into here shortly. Launching a new product as well with five enterprise customers on it. Today, biggest customer pays over a million bucks, team of a 100 people, very efficient, 70 engineers as it continues to scale. Ariel, thanks for taking us to the top.

Ariel Assaraf

35:54>> Thank you very much, Nathan. That was an incredible summary. Thank you very much, man. One

Nathan Latka

36:00more 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 Central.

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