Latka logo

Founder Interview

How Doerz Reached €92,000 ARR and 40 Paying Customers Helping Cities Manage Local Experiences (Interview with CEO Tomi Virtanen)

Interview Date
November 10, 2021
Interviewee
Tomi VirtanenCEO and Founder
Watch
Watch the full interview

Company Metrics at Interview Time

ARR (2021)

€92,000

Paying SaaS Customers (2021)

40

Valuation (fully diluted) (2021)

€3,500,000

Total Funding Raised

€500,000

Team Size (2021)

7

Historical Snapshot

These numbers were reported by Tomi Virtanen during his interview with Nathan Latka in November 2021 and are a historical snapshot, not current figures. See Doerz’s current numbers.

Key Takeaways

  • 01Doerz reported €92,000 ARR in November 2021 with 40 paying SaaS customers
  • 02Monthly recurring revenue was €7,500 at the time of the interview
  • 03Cities and visit organizations paid €249 per month for the SaaS platform
  • 04The company was founded in 2016 and pivoted to a SaaS model sold to cities
  • 05Tomi raised just under €500,000 through equity crowdfunding, including a round on Seedrs
  • 06The company valuation was €3,500,000 fully diluted at the most recent crowdfunding round
  • 07Doerz had roughly 80 to 90 cities using the platform through 40 paying customers
  • 08The team consisted of 7 people with only 1 engineer, outsourcing front-end development
  • 09Revenue tripled two years in a row and was on track to double in 2021
  • 10Tomi retained over 70% equity, with crowdfunding investors holding just under 15%

Company Metrics at Time of Interview

MetricValueSource
ARR (2021)€92,000Founder interview, Nov 2021
Monthly Recurring Revenue (2021)€7,500Founder interview, Nov 2021
Paying SaaS Customers (2021)40Founder interview, Nov 2021
Cities on Platform (2021)80 to 90Founder interview, Nov 2021
Pricing per Seat (2021)€249 per monthFounder interview, Nov 2021
Valuation (fully diluted) (2021)€3,500,000Founder interview, Nov 2021
Total Funding Raised€500,000Founder interview, Nov 2021
Team Size (2021)7Founder interview, Nov 2021
Engineers (2021)1Founder interview, Nov 2021
Year Founded2016Founder interview, Nov 2021
Crowdfunding Investors (2021)450Founder interview, Nov 2021
Crowdfunding Investor Equity (2021)just under 15%Founder interview, Nov 2021
Founder Equity (2021)70%+Founder interview, Nov 2021
Experience Providers on Platform (2021)1,250+Founder interview, Nov 2021
Average Booking Value (2021)€46 to €47Founder interview, Nov 2021
Commission Rate (2021)5% to 20%Founder interview, Nov 2021
Consumer Bookings (July 2021)2,300+Founder interview, Nov 2021
SaaS Revenue Share of Total Revenue (2021)90% to 95%Founder interview, Nov 2021

Growth Breakdown

Revenue

Doerz reported €92,000 in ARR in November 2021, translating to approximately €7,500 per month in MRR. Tomi stated the company tripled revenue two years in a row and was on pace to double revenue in 2021, having grown from roughly half of the current ARR a year prior.

Customers

The company had 40 paying SaaS customers at the time of the interview, through which roughly 80 to 90 cities accessed the platform. The platform also hosted over 1,250 experience providers and served more than 2,300 consumer bookings in July 2021 alone.

Team

Doerz operated with a team of 7 tourism and travel professionals working remotely across Finland. Only one team member was an engineer, with front-end development outsourced to keep costs lean.

Funding

Tomi raised just under €500,000 through equity crowdfunding across multiple rounds, including a campaign on Seedrs in London, at a fully diluted valuation of €3,500,000. He retained over 70% equity personally, with crowdfunding investors collectively holding just under 15%.

Growth Strategy

SaaS Licensing to Cities

Rather than trying to scale a marketplace across multiple European countries with limited resources, Doerz pivoted to licensing its platform to city-owned visit organizations. This SaaS model provided predictable recurring revenue and helped the company grow its network of activity providers in each region.

Equity Crowdfunding for Capital and Community

Tomi used equity crowdfunding on platforms like Seedrs to raise capital while simultaneously building a community of 450 brand advocates who had a financial stake in the company's success. He noted that roughly one third of funds came from his own network, one third from extended networks, and one third from outside.

Geographic Expansion into Germany

With the SaaS model proven in Finland, Doerz began expanding into Germany by licensing the platform to German cities. This allowed the company to enter new markets without needing to build local content from scratch, as the city partner would help source activity providers.

Commission Revenue from Activity Sales

Alongside SaaS fees, Doerz earned commissions of 5% to 20% on activity bookings made through the platform, depending on location. This created a second revenue stream that grew alongside the marketplace volume flowing through city partners.

Additional Services to City Customers

Doerz supplemented its SaaS and commission revenue by selling workshops, marketing services, and online contests to city customers. These services helped cities grow their marketing permissions and email lists, deepening the relationship and increasing revenue per customer.

Best Quotes

“We basically pivoted a little bit to start selling it as a SaaS product to cities. For example, in Germany, we are located in Finland, we have already like several customers here, but we wanted to go to another country. So in Germany, for example, the cities would license our platform and then use it in their region together with us.”
“SaaS license fees and subscriptions easily. So that's kind of like bringing us 90% to 95% of all our revenue”
“It's city owned businesses like visit organizations. They pay at the moment €249 per month. Now we're just about to raise the price to €450 per month.”
“We've been raising something like a little bit less than 500,000 in euros in in like, through crowdfunding, equity crowdfunding.”
“We would have today 40 paying customers and through that we have the roughly eighty-ninety cities. So ARR, annual recurring revenue, 92,000 today and growing.”
“Year ago in revenue, half a little bit over half of that. So we've we've been able to grow within the pandemic, which is, you know, nice.”
“We've been able to triple our revenue two years in a row, and this year we're going to be doubling it.”

What Happened Next

This interview captures Doerz at a specific moment in November 2021, when the company had €92,000 in ARR, 40 paying SaaS customers, and was preparing to expand into Germany. At the time, Tomi was planning a €1,000,000 funding round with VCs at a €4,000,000 pre-money valuation. Visit the Doerz company profile on GetLatka for the latest recorded metrics.

View Doerz’s current profile and metrics

Full Transcript

Chapters

Introduction and Background

Nathan Latka

00:00Hey folks, my guest today is Tomi Virtanen. He lives like a local traveler, a technology enthusiast and experienced business developer. He's the founder of several companies, including One Micro VC to help other local startups get first investments. Also a board member and advisor. He's now building doers.com, doerz.com to help people find local experiences. Tomi, are you ready to take us to the top?

Tomi Virtanen

00:22>> Yes, let's do All right.

B2C vs B2B: How Doerz Makes Money

Nathan Latka

00:23So just to be clear, you're selling to consumers. It sounds like this is B2C, not B2B?

Tomi Virtanen

00:28>> Well, it's B2C, maybe B2C, but we are we are growing our business as SaaS product. So in that sense, we we also sell to governments and businesses. So it's a little bit of everything, you might say.

Nathan Latka

00:42Tell us about the use case where you're selling it to another business.

Tomi Virtanen

00:46>> To another business that would be that would be some travel related business wanting to use our platform in selling their activities. So so this is something that we because we run a platform where there are, I don't know, twelve fifty plus experiences and activities and more coming every day. So typically, it would be some travel related business selling some activity. But our SaaS product, we also have have some companies using that. So so What's the SaaS

The SaaS Product and City Licensing Model

Tomi Virtanen

01:18>> product? That would be the the actual platform that we built. And and, we found out that it's a little bit difficult to scale it to several European countries, for example, with limited resources. We basically pivoted a little bit to start selling it as a SaaS product to cities. For example, in Germany, we are located in Finland, we have already like several customers here, but we wanted to go to another country. So in Germany, for example, the

01:48>> cities would license our platform and then use it in their region together with us.

Nathan Latka

01:55Okay. So just to be, what's the difference between the first thing you described where companies pay do or sell, run activities, and the SaaS product you just described in Germany?

Tomi Virtanen

02:03>> Well, SaaS product is our way of growing and gaining those activity providers.

Nathan Latka

02:12Oh, so it's the same business model?

Tomi Virtanen

02:13>> It's the same business model, although two different steps maybe because finding the content is sometimes, you know, takes resources and we didn't have that. So we started funding basically our growth through the SaaS model. So you have the

02:29>> SaaS product that you just described.

Nathan Latka

02:30How else do you make money?

Tomi Virtanen

02:32>> We make money from all the activity sales. So there's the commission.

02:38>> That's one way of making money, but we also sell some additional services to our city customers. Like what? Like something like workshops, additional marketing services. We even run some contests, online contests together with them to get, marketing permissions, emails, stuff like that.

Nathan Latka

03:01Okay. So you've got the SaaS business, you've got sales commissions on activities, and you've got services to Citi customers.

Tomi Virtanen

03:06>> Yes.

Nathan Latka

03:07I see. And over the past twelve months, when you look at total revenue, which one of those three made up your most revenue?

Revenue Breakdown and Pricing

Tomi Virtanen

03:13>> SaaS license fees and subscriptions easily. So that's kind of like bringing us 90% to 95% of all our revenue Oh,

Nathan Latka

03:21I see. I see. Let's just focus on that use case then for the rest of the show. So what are companies or like this company in Germany, what do they pay on average per month to use your technology?

Tomi Virtanen

03:30>> It's city owned businesses like visit organizations. They pay at the moment €249 per month. Now we're just about to raise the price to €450 per month.

Nathan Latka

03:44So Okay. And talk me to take me back to your first customer, when did you launch the business and when did you get your first customer?

Founding Story: 2016 and the First Customer

Tomi Virtanen

03:51>> We started I started back in 2016. So that's like a little bit over five years ago. I started building a platform for local experiences. This was time before Airbnb experiences and I kind of like found I had the problem of finding authentic experiences and meeting the locals wherever I went. So I started solving that problem basically. And we are still doing the same, although pivoted a little bit a couple of times to I mean, the strategy

Funding History and Equity Crowdfunding

Tomi Virtanen

04:21>> and the end goal is still the same, but way of getting there has been changing a little bit.

Nathan Latka

04:27Very cool. Okay. 2016 is when you got going. That's when you got your first customer. Now, you bootstrapped this, Tomi, or did you raise capital?

Tomi Virtanen

04:35>> Well, I had some, you know, thousand of my own money. I took a loan of 40,000, and then we've been getting some government support, but we've been doing crowdfunding. So we've been raising something like a little bit less than 500,000 in euros in in like, through crowdfunding, equity crowdfunding.

Nathan Latka

04:52On what platform?

Tomi Virtanen

04:54>> Seedrs in London lately, and then a couple of times in Finland just by ourselves.

Nathan Latka

05:00What's it called? Seedrs? How do you spell that?

Tomi Virtanen

05:03>> Seedrs.com.

Team Size and Engineering

Tomi Virtanen

05:08>> Seedrs.com. Got it.

Nathan Latka

05:09That's like a equity crowdfunding platform.

Tomi Virtanen

05:11>> Yep. Yep.

Nathan Latka

05:12Okay. Interesting. So you put in 10 ks in 2016, you then took a loan for $40,000 and then to keep growing, you've done crowdfunding $500,000 on platforms like Seedrs.

Tomi Virtanen

05:22>> Yes.

Nathan Latka

05:23And tell me more about the team today. How many folks?

Tomi Virtanen

05:26>> Today, we are seven tourism travel professionals and working remotely. Everyone today are in Finland, but in in several locations.

Nathan Latka

05:38And how many of those seven are engineers?

Tomi Virtanen

05:41>> One. Only have one one tech lead. Yeah. We've been outsourcing some parts of it, like, you know, maybe front end coding and stuff like that. But he's a he's a, like, true doer, you might say. He can he can build stuff.

Nathan Latka

05:55No. That's good. Now when you raise on a crowdfunding, like, crowdfunding equity effectively, do you have to set a valuation or no?

Tomi Virtanen

06:03>> Yes. Yes. You do.

Nathan Latka

06:04So what think what you said, €2,400,000 as your pre money valuation?

Tomi Virtanen

06:09>> Yeah, we had like lately, last round we That was 3,500,000 fully diluted and 2,000,000 with the share. So we have quite a big option pool for the team today. Mhmm.

Nathan Latka

06:23So so what does that mean? Like, you were the sole founder. How much like, basically an ESOP pool is what you're talking about. How much did you have your reserve for employees?

Tomi Virtanen

06:31>> So something like

06:36>> Well, I still have position of shares and then we have the option pool, so it's kind of like tricky to calculate everything. But today I have something like 70 plus percent of equity. Myself and the team has roughly 30% that will one day be converted into shares. So I'm going to be diluted then and the team is going to be owning more.

Nathan Latka

07:01What about the 500,000 you raised from equity crowdfunding? How much would they own?

Tomi Virtanen

07:06>> A little bit less than 15%, and that's 450 people, like individuals altogether. Some companies, some angels, but mainly just, you know, ordinary people who want to own a part of the growing business.

Nathan Latka

07:22So if that 15% comes out of your 70, you own like 55% fully diluted today, the ESOP pool is 30% and the crowdfunding is another 15%, something like that.

Tomi Virtanen

07:30>> Something like that you could say, yeah.

Nathan Latka

07:32Yeah. Anything surprise you about crowdfunding? Know a lot of my listeners have thought about doing this.

Tomi Virtanen

07:38>> Okay. Yeah. Well, there's going to be quite a lot of surprises, would say, but it's going to be hard work. You can say that. It's going to be like putting a persona involved in the campaign, but it's a good way of getting people who are enthusiastic about their brand. Maybe it's good to have a consumer, somewhat consumer brand because it makes it easier to raise money. I don't know, sometimes they say that one third comes from

Platform Scale: Cities, Providers and Consumers

Tomi Virtanen

08:05>> your network, one third comes from the network of your network, and then one third honestly comes outside of that. I might say that's pretty close to the truth.

Nathan Latka

08:18And tell me a little bit more about how many customers you're serving today.

Tomi Virtanen

08:22>> Yeah, so we have three customers, one being the cities, which we have little bit less than 100 cities who are using our platform today. Then we have the experienced providers, that would be twelve fifty experienced providers roughly. Then the end customers, obviously, to buy the experiences. Used to be international travelers, nowadays domestic travelers, maybe virtual experiences that you do before you travel somewhere. And those

Nathan Latka

08:52But, Tomi, how many customer Okay. Sorry. Go ahead.

Tomi Virtanen

08:54>> Yeah. Something like, I would say, 10,000 up to up to Monthly? Monthly, depending on the season. And and obviously, the pandemic has played a little bit of part here. How many in October will

Nathan Latka

09:07a consumer booking at least one experience through your platform?

Tomi Virtanen

09:10>> I'm gonna give you a number from July because that was, you know, okay month, you might say, and that would be 2,300 and a little bit over people just buying experiences.

Nathan Latka

09:22And what's the average price on those experiences?

Tomi Virtanen

09:27>> Average booking would be a little bit less than €50.46, 47, and average price of sold experience is something like, you know, 25 each.

Nathan Latka

09:37Okay. Got it. So 2,300 activities at $50 a pop a minute, it's like EUR115,000 of activity flowing through your platform, which you took a small fee on.

Tomi Virtanen

09:45>> That's basically the case and the commission changes from 5% to 20, depending on the location.

Nathan Latka

09:53I see, I see. But you have 100 customers paying for your SaaS tool?

40 Paying Customers and €92K ARR

Tomi Virtanen

10:00>> 100 cities using that. We would have today 40 paying customers and through that we have the roughly eighty-ninety cities. So ARR, annual recurring revenue, 92,000 today and growing.

Revenue Growth and Pandemic Performance

Nathan Latka

10:21The 92,000 today means you're doing about, what is that, $7,500 per month in revenue?

Tomi Virtanen

10:28>> Yeah. Monthly recurring revenue, €7,500.

Nathan Latka

10:32And where were you exactly a year ago? Do you remember?

Tomi Virtanen

10:35>> What was that?

Nathan Latka

10:36Where were you exactly a year ago in revenue?

Tomi Virtanen

10:39>> Year ago in revenue, half a little bit over half of that. So we've we've been able to grow within the pandemic, which is, you know, nice. I understand that this is not the case with travel travel industry everywhere and in all like technologies are doing quite good and we have something that we can help out actually the companies that are in trouble and regions that are in trouble. So we've been able to triple our revenue two

11:07>> years in a row, and this year we're going to be doubling it.

Nathan Latka

11:10That's great. Were you much larger before COVID?

Tomi Virtanen

11:15>> Nope.

Nathan Latka

11:16We were just about to So, we started our SaaS business just before COVID, which was actually helping us out when the Very pandemic

11:25cool. Well, nice growth. Valuation has grown too as you've done these equity crowd fundings, that you've got people using the platform. This is, I think, is the intermediary step where you see SaaS companies turning into blockchain based token businesses. Starts off with letting your crowdfunding folks get in. They probably use your technology to book experiences before you know it, you'll be in, you'll be on blockchain. Any plans to do that in the near future?

Tomi Virtanen

11:48>> Not at least yet. So kind of like now, now that you mentioned it, started thinking about that. But now we are, you know, basically focusing on growing in Germany and building our next funding round, which is gonna be with VCs most likely. How

Next Funding Round: €1M at €4M Pre-Money

Nathan Latka

12:02much are you looking to raise?

Tomi Virtanen

12:04>> We're looking to raise 1,000,000 in in, like, first half of next year. So I started already my long list and yeah.

Nathan Latka

12:11And how much what valuation are you looking to raise at?

Tomi Virtanen

12:14>> It's gonna be 4,000,000 pre money.

12:16>> 4,000,000 pre money.

Famous Five: Books, Tools and Personal Life

Nathan Latka

12:17Very cool. We're we're rooting for you. In the meantime, though, let's wrap up here with the famous five. Number one, what's your favorite business book?

Tomi Virtanen

12:24>> Oh, it's not a business book, but I always enjoy Hitchhiker's Guide to the Galaxy.

Nathan Latka

12:32Number two, is there a CEO you're following or studying?

Tomi Virtanen

12:38>> I have a hard time having heroes of my own, but I don't know. Maybe I'm not gonna name anyone now.

Nathan Latka

12:44Number three, what's your favorite online tool for building doers?

12:49Favorite tool?

Tomi Virtanen

12:52>> Maybe that's just boring, but Zoom.

12:57>> Zoom?

Nathan Latka

12:58Mhmm. Alright. Number three four. How many hours of sleep do eat every night?

Tomi Virtanen

13:02>> I try to sleep eight hours and fail miserably most Alright. Of the time.

Nathan Latka

13:07And what's your situation, Tomi? Married, single, kids? Married with kids. Yeah. How many kids? Two. Seven year old and three year old girls, You're a busy guy. How old are you?

Tomi Virtanen

13:19>> I'm 41.

13:21>> 41.

Nathan Latka

13:22Last question. Something you wish you knew when you were 20.

Tomi Virtanen

13:25>> Something that I was wishing when I was 20.

Nathan Latka

13:27Something you wish you knew. Yep.

Tomi Virtanen

13:29>> I wish I knew.

13:32>> I started my first business like honestly, hands on when I was 35. So if I've known that it's gonna be like this, I would have started earlier.

Nathan Latka

13:41Guys, there you have it. Doerz.com launched in 2016. He put in 10 ks of his own money, took out a 40 ks loan, has now raised about $500,000 in equity crowdfunding at a 3,500,000 valuation, growing revenue from 4,000 a month to $7,500 per month. Nice growth. Now targeting a million dollar round at a 4,000,000 pre money valuation, all to help you enjoy better experiences, travel experiences. They've got 40 cities paying $250 a month on average and

14:04scaling nicely, tripling year over year, doubling more recently. Tomi, thanks for taking us to the top.

Tomi Virtanen

14:09>> Thanks, Nathan.

Nathan Latka

14:12One more 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

14:37Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

14:59fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

15:21for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We

15:40got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. All right. I'll be in the comments.

Tomi Virtanen

15:47>> See you.