Flowcase (formerly CV Partner) Revenue, Valuation & Funding (2024)

[00:00] Guys, CEO Erling is an entrepreneur and engineer by trade launched in 2012 with no revenue. Took him five years to break a million dollar run rate in 2017, but now today doing $5,500,000 in revenue up 47% year over year from 4,000,000 a year ago. A year ago in 2023, they actually raised their first outside capital, a $3,000,000 seed round at somewhere between a 20 and 30,000,000 valuation. Now they're focused on growth. They help you add case [00:23] studies and team member profiles, resumes quickly and easily to your proposals. They play nicely with GitExcept, Panadoc, and other document signing tools. Their team of 40 today with 12 engineers is now looking to scale into The US. Hey, folks. My guest today is Erling Lind. After completing an MA in computer science from the Norwegian of Science and Technology, he held software development and consultancy roles at Hydro IS Partner, Miles AS ThoughtWorks, and Ford Internet Group. With [00:47] his comprehensive IT background in 2011, he presented with Nikolay Nielsen to found CV Partner at cvpartner.com if you wanna follow along. Alright. Erling, you ready to take us to the top? [00:58] >> Yes. [00:59] Alright. What is what is c v partner? Who are you guys selling to? What's the product due? [01:04] >> Yes. So c v. A c v is that's Latin for resume. So as you call it in the in the in The The States. So our clients, they are professional service firms. So that means IT consultancies like Capgemini or CGI. It could be management consultancies like VDO or PWC. It can be engineering firms like WSP and even law firms like DLA Piper. Yeah. All those logos are clients in some geographies. And they all typically often share [01:40] >> a challenge when it comes to winning work. So they they essentially get a lot of their work from from winning oblige sort of tenders. So they bid for work. In order to win that work, they need to present their people, so their consultants or engineers or lawyers, and they need to present them in the best possible way. So highlight the relevant experience and also include a lot of experience to make sure that they tick off all [02:07] >> the requirements in the bid. And further, they often also have to format it. So in the EU, there is, like, standard formats that keep changing all the time, the same in, like, in in The Nordics or from the like, the government issues different resume templates that you have to adhere to, and the same in The US that like US Government forms. And typically, you would have these resumes without our solution. The resumes would be in a [02:29] >> file share, in Word documents. It could be on someone's laptop. So you just give them a tool, a b to b niche SaaS solution, to gather all this information so they can search, find the relevant consultants with the right amount of experience and certification, etcetera, put them together, highlight the relevant experience, export it into these templates. So they they they have a lot of time in this process, reduce the burnout of their bid and proposal teams, [02:57] >> and they increase the chances of winning more work. So [03:00] Yeah. Let me just let me just jump in real quick. So so to try and simplify this real quick, let's DLA Piper has 50 lawyers. They have a startup that needs help with a lawsuit related to fintech. DLA Piper would use your software to find which of their attorneys is best suited for that fintech legal case that this that the software company needs, and then they will send that proposal to the software company using your tool. [03:23] Is that right? [03:24] >> Yes. That that would be a good example. But I would say possibly a more typical example would be, let's say, WSP is bidding to build or support a huge project, and they need to prove that they have 100 engineers that have participated in designing a large bridge or something with specific requirements in the past, and they need to put all this together and send it off them, then they they would be able to search fine, but [03:54] >> also actually make sure that Okay. The percentage is the best [03:58] possible way. Big law firms then, those are the ones paying you as customers, like the DLA Pipers, the world, etcetera? [04:04] >> Yes. Yes. [04:05] I see. [04:06] >> Okay. How do you how [04:07] do you do you price this then? Sort of on average, what's the average cost paying you per month or per year to use the technology? [04:13] >> Yeah. So we are kind of targeting two segments now. So we go we go for midsize, which should be, like, 15 to 50 k USD ARR, and then we have the kind of enterprise motion, which is, like, 50 to 500 k [04:25] Mhmm. [04:26] >> US dollar ARR. And that yeah. We we have dines in both of those boxes. Mhmm. [04:32] How how many folks would you categorize in your enterprise segment today? [04:39] >> I would say, yeah, probably 30 to 50 enterprises. [04:44] And is that where you started, and now you're selling you're going down market, or did you start down market going up? [04:50] >> We started down market. So our first client was probably 60 employees or something like that. Small small deal, and then we've gone up market since. [04:58] Tell me tell me that story. When did you close your first customer? [05:03] >> So we started when we started out, we had this idea that we could help consultancies solve this problem. I called everyone I knew in the consultancy business, and they all said they had the same problem. And then I asked them, like, if I solve it, will we pay for it? And Olin said yes, but then I started building. [05:22] Marling, when was that? What year? [05:25] >> 2012 was probably when we started building. Yeah. And I think I started building. We had some pilot customers that gave us great feedback. [05:36] >> One of the one of the feedback was like, you know, this is also functionality. It saves us a lot of time, but it looks completely shit. So that's when I got my cofounder, Nikolaj, to join me, and and we sorted out the user experience. And after number of demos, we finally had one client that we're ready. Send us the contract. And we looked at each other. It's like, do we have a contract? And then we set [05:59] >> a [06:00] first customer? [06:01] >> Think it was 2013. [06:03] Okay. So 2013, you signed your first customer. What did they pay? [06:08] >> Probably 10 k or something. Yeah. [06:11] Okay. So they paid 10 k for a year for, you said, six zero seats? [06:16] >> Yeah. I I'll try to remember. They could be in 5 k, 10 k, some some somewhere in that range. Yeah. Got [06:22] it. And then that was your first customer. Right? Scale up Yeah. You know, take us up to today. Right? How many customers are you serving today, and how are you growing? [06:30] >> Yeah. So today, have more than 400 customers, [06:35] >> and we grew around 47% last year. [06:40] Mhmm. So just to be and just to be clear, you said average price point earlier, you had midsize enterprise, but and you gave me two Yep. Very different ranges. But was the average customer paying something like 15 k per year? [06:52] >> Yes. Yeah. Yeah. I would say so. That's the ACV at the moment, but it's shifting upwards as we're going more upmarket. [06:58] Okay. So can I take 400 paying customers times 15,000 ACV average? That would put you at about 6,000,000 run rate today? [07:05] >> Yeah. That's that's correct. Yeah. Five between five and six. That's the current ARR. [07:10] That's great. And so if you grew 47% year over year, that means you were doing what about you ended about a year ago at 4,000,000 run rate? [07:17] >> Yes. Yes. [07:19] That's great growth. Where is most of that growth coming from? Expanding seats and current customers or adding new customers altogether? [07:26] >> So we have our NRR was, like, a 115% last year, but we are we're definitely chasing new logos and and and going through a geographic expansion at the moment. So [07:40] How are you landing new logos? What's your motion? Do you have inside sales reps? Is it organic, SEO? What is it? [07:46] >> We got some we we do get some from from SEO inbound. That's more in the markets. We're more established. And as we're breaking into new markets, it's more outreach, going to a lot of events, conferences, and things like that. Mhmm. [08:01] Okay. So I guess you added a million and 0.5 of revenue over the past twelve months. Where would you say the majority of those customers came from? Was it a big conference you went to or something else? [08:11] >> It's a mix. It's a mix of [08:15] I'm to pick your I'm asking you to pick your most successful growth channel. So the answer cannot be it was a mix. What was your most successful channel? [08:24] >> I I I would say it's still probably growing word-of-mouth from, yeah, customers that come inbound. But [08:34] Okay. How but how do they find word-of-mouth doesn't just happen and nor does inbound. So when you say inbound, how do they find you? What are you doing? Your organic rank on Ahrefs from a domain rating perspective is 26, so you don't get a lot of traffic from just random inbound SEO. How are you getting inbound? [08:49] >> No. It's it's it's typically people that have used us in other companies and have changed jobs, and they come to us. That's a I see. This is a obviously, very successful. But in order to reach into to new markets, we are So you need people to you need [09:07] people to get fired. [09:10] >> Not necessarily fired, but accepting new jobs, perhaps. Yes. [09:13] Yeah. Who would you say what are the other two or three forms you're competing with in this space? What are their names? [09:19] >> So we are I would say we're competing against, like, you know, temp doing building it themselves. We have we are competing against people only using this in SharePoint, and then it's it's it's typically maybe companies that are coming this from a more, like like, managing like, digital asset management, like, document management, more, like, more generic tools. And then there's some sort of CRMs that have added the the functionality that we provide us an add on, but [09:56] >> maybe not at the at the depth that we we go into. [09:59] Well, I mean, would you put people like Congo Composer or Proposify, Lupio in in in your competitive suite or no? [10:07] >> No. No. Those are more for us, those are more partner potential. So so we they they they would typically like, when you a proposal can consist of multiple parts and multiple documents. And and and and typically, like, there would be some intro about your companies or financials, how you would solve it. But then there's like this the resumes and the case studies, and that's the two part that we sold really well. It goes super deep there. [10:36] >> So would say these other tools, they could partner with us when they need a more specific specialized solution in that area. Mhmm. So, yeah, we don't see those as as competitors. More like, you know Partners. Potential partners. [10:49] Okay. So 4,000,000 is what you ended with, call it, June last year. So year over year growth brings you to 5,500,000 today. What year do you pass a million revenue? Do you remember? [10:59] >> Oh, [11:05] >> '20 no. It must have been 2017 perhaps. Okay. [11:11] Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and went on to create founderpath.com. I raised a large fund to do non dilutive deals with B2B software founders. So far, [11:38] we've invested in over 400 software founders totaling $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. How'd you guys sustain the business from 2012 to 2017 with under 1,000,000 of revenue? Just keep the team really small? [12:02] >> Yes. So we we basically bootstrapped for ten years until we raised our first round last year in September. So so we And what was that [12:11] size size of that round? [12:15] >> Round 3,000,000. Okay. [12:17] And why I mean, now is a terrible time to be raising. Why did you decide that you need to go raise equity right now? [12:23] >> So I I I guess we have been with Strapping for ten years, as I pointed out, and we have we had a decent grow growth. And for us, it's also been a learning journey, of course. But we were kind of getting to a point where, okay, we we think we have something that we can accelerate, and we think this time is now. So, yes, obviously, maybe we should have raced in '21 or something like that. But [12:50] >> when we decided to to to consider racing, we started talking to to potential investors. And in the end, we we got we got a decent enough valuation that, you know, this makes sense to do, and we want to use this to go faster now. It's so it's more maybe it was not ideal timing in terms of the market, but it was the right timing for us as a company. [13:13] Most folks in their seat are selling something like 20% of their company. Were you around there? [13:18] >> Less than that. Yeah. [13:20] Okay. Got it. So, I mean, is it fair to say between fifteen and twenty, or were you under 15? [13:26] >> I would say under. [13:28] Under okay. Great. [13:29] >> Around around around that. Around. Yeah. Yeah. Yeah. [13:32] Well, anything if you sold if you raised 3,000,000 and you sold between 1015% to your company, right, that would put you somewhere between a 30 and a $45,000,000 valuation. Right? [13:42] >> Yeah. It's on the lower end of that. But yeah. Yeah. [13:45] Yeah. I mean, the reason I bring up the timing is because by all I mean, for a seed round, you have 4,000,000 of ARR. Right? 30,000,000 valuation represents a 7.5 x multiple. There are [13:56] >> others with Slightly lower than us. [13:57] Well, slightly lower than us. But [13:59] Okay. Yeah. Okay. So my my my point is the same, though. You raise it under a seven x, you know, multiple when folks in your same position in 2021 are raising at 40 x multiples. [14:09] >> Yes. Yeah. [14:10] This is very dilutive for you. I mean, why couldn't you keep bootstrapping to preserve your equity? Why didn't you wanna do that? [14:18] >> I I I guess we were coming at the point where that equity could speed up the growth of the company a lot faster than we could have done by continuing bootstrapping. [14:29] But but how? Where would you put the money? Because when I asked you about growth channels, all you told me was, well, it's word-of-mouth, which is hard to fuel that with paid with paid marketing. [14:37] >> No. I I I think we have gotten a really good market share in The Nordics where we are based, but we have offices in The UK, and now we started an office in Toronto, Canada to spearhead the North American expansion. And I guess we were seeing more traction in North America or and also a huge market, of course, for us. So and although we were able to successfully sell to clients from from Europe, we there's obviously [15:11] >> a time zone issue here, and the the team was working longer and longer hours. And I I think we just needed to to scale up that [15:20] Got it. It's like for North American expansion. Yeah. [15:24] Why why I mean, I assume you know Sameer and GetAccept well. I'm sure you know Makita, PandaDoc. I mean, these are you are a very natural bolt on acquisition to any of these document signing platforms. And I imagine many of them would have been willing to pay a price greater than the multiple you just raised VC at. Did you look at any acquisition offers last year along with the VC round? [15:45] >> I think we consider that, but I think coming from a bootstrap company where we originally, we didn't have any plans to to raise anything, we our plans was to continue bootstrapping and being employee owned company, making that sort of transition. We wanted to do it in a in a, I guess, stepwise way, and that felt like the most sensible way forward for for us and the company. That's what we wanted to do. That was what excited [16:14] >> us to keep building the company. Mhmm. Yeah. [16:19] Oh, Arlen, sorry, but just to take a step back. So you've been doing this for over ten years. If someone willing was willing to pay you 40,000,000 all cash upfront, which is 15,000,000 more than the valuation you just raised at, what you're saying is that didn't feel like a natural next step. You wanted to take the the dilution and raise 3,000,000 of equity and hope to get an exit later on for for you and your early [16:37] teammates? [16:38] >> Yeah. I'm not sure we got that offer, but I think for us, we we wanted to we we not doing this only for the money. We're we're we love building a company and love the learning journey as we obviously grow and continue. So so I guess for us, that that was I see. That was the step we wanted to do. [16:55] Who who led the round? Which VC? [16:59] >> They're called ID Capital, Norwegian VC. [17:01] ID Capital. Very cool. And tell me more about your team. How many folks are full time today? [17:06] >> There are almost 40 now in 40. Five countries. Wow. [17:11] How many engineers? [17:13] >> 12, I would say. [17:15] 12. Are you engineering by trade? [17:17] >> Yes. Yes. [17:18] Nice. Are you the sole founder, or you have cofounders? [17:21] >> I I guess I started it initially, but then Nikola is the the UX person joined very soon after that, and then joined our CTO, who's London based, joined maybe a year after that, and then nobody else has been the early salesperson that joined after that. So that's kind of the four of us that that we consider ourselves. [17:43] Did the last person join? What year of those four? [17:46] >> I have to remember about [17:49] >> 2016, probably. [17:51] Okay. So it was before you were doing 1,000,000 a year in revenue? [17:53] >> Yep. Yep. [17:54] Yeah. Very cool. Well, anything I missed about the company you wanna make sure our audience knows? [18:00] >> No. I I I guess I am so I'm based in Oslo, Norway. Monday, I'll be in London onboarding our new retail sales there. But in August, I'm moving to Toronto, Canada and with my family and going to be there for the next years to to to really expand the [18:20] >> to to North America. So I'm very excited about that. So so I guess I'm looking very much forward to to learning a lot more about that market and hoping to meet and connect with people. So if anyone wants to meet up or connect up. [18:32] There you go. If you guys are listeners in Toronto, a founder in Canada, reach out to Erling. Just look up Erling CB Partners on LinkedIn. Check them out. Erling, let's [18:39] >> wrap up here with [18:40] the famous five. Number one, your favorite business book. [18:43] >> Oh, I've got it there. This one. I'm with Ah, yeah. The revenue architecture, the new bible. Yeah. No. Good one [18:52] >> by Jaco and is winning by design team. [18:54] Number two, is there a CEO you're following or studying? [18:58] >> I feel like there's lots of them, but I'm getting a lot of inspiration from Eric Bakstad, who's COO of a company called Ardoc. He's in the same portfolio as us and [19:13] >> very helpful. [19:14] Number three is what's your favorite online tour? What online tool do you spend the most money on? [19:20] >> Oh, I guess it's probably HubSpot at the moment that we spend the most on, but I also spend a bit of time in Panta these days. So Yep. [19:31] Number four, how many hours of sleep do you get every night? [19:34] >> I have two small kids, so that varies a lot. Let's say six. [19:38] Okay. Six. So married with two kids, you said? [19:41] >> Yes. [19:42] And how old are you? [19:44] >> I'm 40. [19:45] >> 40 years old. [19:46] Last question. Something you wish you knew back when you were 20. [19:50] >> Oh. [19:55] >> Oh, that's that's that's a very good question. [20:01] >> Oh, can I answer that? There's so many lessons learned starting this company. I I guess it would be fun to know the journey I've had so far and what's possible. And, yeah, that's yeah. And I'm super excited that adventure can still sort of continue these days by looking forward to to making the move to Toronto, for example, which I thought I would be able to do in my forties. But now that we're doing that, that's super [20:28] >> exciting. [20:29] Guys, CEO Erling is an entrepreneur and engineer by trade launched in 2012 with no revenue. Took him five years to break a million dollar run rate in 2017, but now today doing $5,500,000 in revenue up 47% year over year from 4,000,000 a year ago. A year ago in 2023, they actually raised their first outside capital, a $3,000,000 seed round at somewhere between a 20 and 30,000,000 valuation. Now they're focused on growth. They help you add case [20:52] studies and team member profiles, resumes quickly and easily to your proposals. They play nicely with GitAccept, Panadoc, and other document signing tools. Their team of 40 today with 12 engineers is now looking to scale into The US. Erling, thanks for taking us to the top. [21:05] >> Thank you so much, Nathan.