Datalab Revenue (2022)

hey folks my guest today is andre merkley he's a lifelong i.t nerd and founder of datalab the erp leader in southeast europe he then did the ipo and caught interest for farming and started development of farm management information systems now building data lab.eu andres you're ready to take us to the top sorry are you ready to take us to the top oh yeah well all right yeah sure all right very good so just to be clear data lab ipo'd or your prior company ipo'd no data live ipo actually okay we were the first technology uh technology ipo on the jubilant stock exchange it's rather an essent market or a very sleepy market so we did not get the bank the bank from the listing that we that we hoped for so this is this is the stock exchange in slovenia uh that you ipod on why did you want all the pressure of being a publicly traded company why not stay private well we firmly believe in employee stock ownership and it was very problematic to do it under the local legislation basically the only way to really put it properly in place was to to go to get listed i think um when we were there so that was our that was our main actually goal not so much raising capital but uh establishing value of the company so when did you guys ipo june 30th 2008 so we got yeah three months before everything going down and and what was revenue back in 2008 do you remember uh i would say 4 million okay like that and what have you grown it to today so today we're closely to 15 and 1 5 1 5 yeah and we're stepping up we're stepping up um extremely in the last uh two years uh so we hope that we'll be getting the 50 in probably two to three years now before we go too deep on the economics tell me who's buying this is it small farm managers or folks managing thousands of acres of farmland um mostly we were successful with the large farms what what we found in in farming is that it's it's the basic business principles that are extremely hard to to make because you have such a variable environment you see in when you when you think about a factory you have a predictable environment you have a everything that under control while you if you go planning for the farm you've got all these variables and very complex processes and stuff like that and that's what we actually wanted to to to simplify to really get an overview of all the resources in the farm and to help you plan basically to help you manage your farm the way um an industrial production would be managed and so how many uh farmers do you pay for you today so i would say that we have roughly 500 farms but our i think our biggest is 120 000 hectares so sorry not that's your largest and so what is the largest customer what do they pay you per year um we we price our software per uh per asset so basically you would be paying us per cow or per uh flock of of ship or uh per hectare of land or orchard or something like that um we're charging depends on the market where but we would we would be charging from one to 1.8 euros per hectare per per month 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 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or something like that okay okay got it that makes sense and and any i mean you're now public any plans to go private again are there any advantages to going private yeah just just in the process of of taking the company back private uh and um gotten some investors and then scaling up how much do you have to raise to take the company private four to five would be that four to five million dollars yeah with four to five million plus um what we have spare uh actually for a stock buybacks uh we would be able to remove almost the complete free float from the market and this is the company i see so and how much cash do you guys currently have on the balance sheet [Music] i can only tell you i don't i can't tell you currently but i think in the last quarterly report it was 3.5 or something like that okay so 3.5 of your own cash plus raise four or five million and then you could use that money to take the company private yeah with these interesting and so what i mean why why do that you went public for a reason you don't like it now you want to go private what didn't you like about being public um well first first of all being public on [Music] on a back country market is not the way to go and we thought that uh the mar the the financial markets will consolidate and we basically hope to get a backdoor to also to some larger stock exchange that either the vienna stock exchange would buy that's the leblanc stock exchange and we would be automatically interested in stuff like that unfortunately um by in after 2008 everything went south and those plants did not materialize we did not establish full potential we were stuck on an eliquid market and that became a hurdle to our raising capital because again being public in a unknown foreign market was unknown legislation uh decreases your enterprise value when did you start the company what year 96 1996 wow so you you uh you did you bootstrap it from 1996 to 2008 um 1996 to 2008 we were working on erp systems for small and medium-sized businesses which carry a lot of similarities my question though was did you bootstrap or did you raise capital in that time no we completely was bootstrapped actually i went bankrupt in 94 with my previous company uh so i actually were not even credit i was not credit worthy so it was basically the last paycheck um a garage to computers and and a lot of will why'd your last company go bankrupt in 95 what was the name of the company uh gecko we we did wholesale of computer chips and and as it was flashing that day we assembled uh pc's personal computers importing from taiwan uh assembling and selling the fixed computers and why did it go bankrupt um we then well 70 of our revenues came from brokerage of computer chips we just loaded up for the christmas season and then hyundai and samsung are announced a new factory of chips and price went the price huffed while our chips were on on the uh on the flight that that was the tip of the iceberg but basically we were much too leveraged i see i see interesting okay so you launched a new company in 1996 you bootstrap it and then how much did you raise when you ipo'd we did not raise we raised zero on ipo we simply listed because we wanted to have this valuation but we did in 2010 we we raised the first million for the farming so first we we raised it by the swiss uh private investors and with them on board we got to we raised it via a secondary stock offer interesting so do you i mean do you personally still own the majority of the business then i'm the biggest shareholder yeah but i don't own the majority why not though if you didn't raise anyone you ipo and then you only raised a million and you're not doing 15 million in aor i mean shouldn't you as the founder own 90 95 equity um no actually well first of all 30 percent was given to to to my colleagues the employees that helped us bring to this and then you have roughly a 10 you had you have outside investors and so i was basically on 16 and i uh truncated that um i spin off um a philanthropic foundation i was quite active in that one and there went another 20 and so i'm with 30 something okay well that's that's not that's not terrible um yeah so okay so you know when you take this back private uh you are you're are you buying out the investors right now that own ten percent and replacing them with new investors is that how that works probably yeah uh we'll probably buy a lot of um also a lot of employees and ex-employees um and um the small the small holders and also we have our shareholders are basically a banking fund that needs to exit well if we exit the stock exchange we cease to be a public company so this is the pool of shares how many folks are full-time at the business today um roughly 200 directly 200 okay how many engineers development would be 95. okay wow that's a lot how many salespeople 20 something but we have a strong reseller network tell me about that well we we're partnering with with anybody that brings value so our natural partners would be accounting services uh then the subsidies agencies how do you find accounting services that specialize in farming well first you go to the rural areas there that's where you have them uh we were we were quite known from within the accounting community by our small business erp and so it was easy to speak to them i see okay that makes sense very interesting story here okay so go to market is that way now when when an accounting firm resells your products what kickback do you pay them on the 30 000 a year contract do you pay them 10 20 it's a big it's a bit it's somewhat more in the first year and a bit less in the second and third year and then it's easy does it ever stop or does it is it go on forever it stops um perpetual perpetual commissions are are killer for the business because they uh sooner or later your partner will start treating that investment as a pension fund and will lose incentive to to sell more and it's a death spiral so just to be clear you stop kickbacks in year three yeah yeah yeah here year one or year three it really depends on on deal to deal it also depends on the uptake um you cannot or usually you don't uh implement our system in a big bank you would start first getting the the materials under control the quantities then going into the or fixing ordering then hr and stuff like that so you it would be an onion and depending on that onion would also give you a commission plan um what's the company valued at today [Music] stock exchange value is i would say in the low twenties so if someone offered you 20 million dollars all cash up front today to sell the whole business would you sell no absolutely not and why not if that's what it's valued at right now on the stock exchange because well um several several things first i i believe that the business is worth much much more uh if you look we have a 3.5 mil after tax profit on a 5 mil cash flow which is seriously uh cool numbers for growing 30 so 15 to 30 percent year on year and we we plan to to really put the pedal to the metal in the future years that would be i i simply believe in the strength of the company and on the possibility to really revolutionize this i'm not seeing many solutions like ours in market there are more second solutions the dirty details that that were capable of handling are really what i think that makes the progress of the software and also i would not be selling the whole company because frankly i do not know where to invest you have a philanthropy right yeah so i mean if someone tells you if someone offers you 30 million all cash up front today right 20 that's gonna go to your philanthropy all your investors get a great exit your employees get money that's great that's 30 there you personally make 30 of the 30 million would you sell for 30 million all cash up front today what's the number i know that i i think i would i would be violating a lot of uh regulations if i would if the major the major shareholder would tell you there mark you're probably right i'm really sorry but let's wrap up with the famous five here number one favorite book my number one favorite book uh the mars trilogy the mars strategy the mars trilogy mars and green mars number three and number two uh is there a ceo you're following or studying uh i used to now frankly i would i would rather go reading and following philosophy or something like that in the ceos number three what's your favorite online tool for building data lab my favorite online tool for building data lab jesus i would be so 19th century if i told excel that's okay but i i think you know i i'm a fan for models and i love my exhaust sorry number four how many hours of sleep do you get every night um up until three years ago so last 25 years last 20 years were 100 hours a week uh the last six seven years are i would say seven i really scaled down and the company you know how many hours how many hours of sleep do you get per night sleep i would say seven okay and what's the situation married single kids uh divorced bad single father any kids single one kid two actually two kids okay and how old are you oh ancient 52 that's not ancient you're young all right last question something you wish you knew when you were 20 something i'm sorry something you wish you knew when you were 20 years old how to get my temper under patrol you have a temper oh jesus is huge i haven't seen it all right fair enough guys there you have it datalab.ch launched in 1996 after his first company went bankrupt in 1995. he learned a lot datalab is helping farmers manage their actors their orchards their cows their sheep that's what they price off of one of those units of a measurement the average farmer pays them 36 thousand dollars per year they're doing 15 million bucks in revenue today up from 12 million a year ago and up from four million back in 2008 when the ipo down the slovenia stock exchange he's now raising four or five million bucks to try and take the company private so he can unlock additional value he thinks company's worth way more than 30 million bucks we'll see what happens next andre thanks for taking us to the top nathan thanks for having me goodbye 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 2 p.m 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 wouldn't want you to miss breaking news in the 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