Dolado Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Guilherme Freire. He's a cofounder and CEO of Dolado, investor at Norte Ventures, co Kobi, Nomo, and bHub, in addition to being a board member of Quico and bHub. He cofounded livo eyewear, cofounded Grow, and cofounded Wharton Angels, the Brazilian chapter. He holds a bachelor's of engineering degree in industrial engineering from PUC Rio and MBA from Wharton Business School, now building dolado.com.br, which is playing in the enablement space for a lot [00:26] in the Latam enablement space for ecommerce sites and financial services. Alright. Gui, you ready to take us to the top? [00:32] >> Yeah, Nathan. Super excited Thanks to be for the invitation. [00:36] You bet. You've got a lot going on. So, I mean, are you really focused on the startup here or is this like a side thing? [00:42] >> No. I'm focused on the startup, focused on Dolado, but of course, are many opportunities going on in the region and the spots. So I like to do side investments and help other entrepreneurs. But but my focus and my time is more dedicated to to building Dolado. [00:59] So what what is it? I mean, it looks like it's something that we can use to, like, buy headphones, buy chargers, things like that. But is there a SaaS play here that I'm not seeing? [01:07] >> Yeah. So what you're seeing when you get into the website is we focus on building a solution that helps small merchants buy better their inventory and also sell better online, because most of the merchants, the small entrepreneurs in Brazil are 100% offline. And we decided to focus initially on electronics because everybody is going after the low hanging fruits, which is fashion and groceries. But those segments are too competitive already. So we decided to focus on electronic. [01:43] >> We are the only one on the B2B marketplace space online, VC backed. And that's where we saw the biggest opportunity. And the SaaS play that we have here is the e commerce play to help them sell online. And we also about to launch a management tool to help them manage their business better. So we help them buy better, sell better and manage better their business. [02:05] So what does the average paying customer today pay monthly in terms of the SaaS part of business? [02:12] >> The SaaS part of the business, we're giving it for free because it's a way for us to, it's a CAC hack, like we offer the e commerce solution for them to sell to their final cloud for free. But the moment they start using our solution and build the trust, we can make a lot of money by selling them their inventory. So right now, like we operate like Amazon, Amazon, they have a marketplace on the side that [02:37] >> connects suppliers with final customer, but they also have their own line of products that they make a lot of margin on that. So we're doing this on the B2B store. SaaS today is free and we don't have time on monetizing on this front because the way we got a great way to have a low CAC and monetize [02:57] So on the other then on this, let's build up a marketplace for a second. Okay, so in the past thirty days, well, I guess let's just use the last full month, which is April. How many suppliers were on the platform? How many SKUs? [03:11] >> So right now we have around 500 SKUs, 100% focused on the electronics. We have more than 30,000 merchants registered and the market- [03:24] Those are those are suppliers or buyers? [03:27] >> Those are buyers. And on the supplier side, we are now we are increasing on the B2B marketplace. We just have around five suppliers for now, but the idea is to increase more. But yeah, but we are right now. [03:44] There's five suppliers with 500 SKUs? [03:47] >> Yes. [03:49] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:12] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:37] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is [04:59] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're [05:24] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but [05:46] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into [06:12] the interview. And there's 30,000 registered buyers. How many of those buyers spend at least a dollar the past thirty days? [06:22] >> Last last thirty days around 1,500 spend on average with us $120 on average. And we've been growing 50% month over month. So this month we are spending, we are increasing 50% is number that I just told you. [06:43] So 1,500 buyers, right? Spending $120 on average, like per checkout is about $200,000 volume. How do you make money on that $200,000 of order volume? [06:55] >> Right now, have That's the beauty of what we do is we have a lot of margin. So right now, the gross margin, consider the price we sell and how much we pay in terms of COGS, it's 28%. So it's one of the highest in the B2B segment, the B2B marketplaces. So just to [07:13] be clear, you're making $56,000 on $200,000 of volume? [07:19] >> Yes, but besides this, also have to take out logistics, we have to take out transaction costs. So after taking all of these, we have a contribution margin of 13%. [07:32] Okay, got it. So just to be clear, there's $200,000 that these buyers are purchasing from five suppliers and 500 SKUs on your platform. As they put and spent $200,000 over the past thirty days, you have to spend about 150,000 of that to actually buy the physical good, the charger, the headphones, the whatever, the product. So that's your 28% sort of gross margin. Then after all your operating costs, your people, marketing, sales, whatever, you're taking about 13% [08:01] to the bottom line. Is that about right? [08:03] >> Yes. That's correct. [08:04] I see. Okay. This makes a ton of sense. So would mean so 56 times 0.13. Yeah. So that means you're doing $8,000 per month right now in terms of margin you make on the marketplace. Now, that include the goods that you sell directly that you own and products you own and build yourself? [08:21] >> Most of them, most of them, it's directly that the marketplace, the three people that it's, it just started last month. So over 90% of what we are talking here is from our side. We buy in and sell into to the clients, not just intermediating on the 3P marketplace. Yeah. [08:42] Oh, I see. I see. I see. Got it. So you started off by only selling your own line of products. Now you've added five suppliers and 500 SKUs? [08:51] >> Yes. So Amazon that's just like Amazon. Amazon, 60% of what you see in Amazon, it's coming from a third party, but 40 it's it's Amazon. It's like they are buying from someone else and they have it in their inventory. Some of them has Amazon brand on it and selling directly. So it's a mix of 1P and 3P. This is exactly what we are doing here. [09:16] I see. Got it. So you're right now doing a run rate in terms of your gross margin, Of something or sorry, your I guess, how do you calculate your revenue? You don't want to use just total transaction volume going through your platform, right? [09:29] >> Yeah. So right now, that's the way we because it's still marginal the way we do 3P. On the 3P, on the marketplace side, it should be take rate times GMV. But the GMV, as I told you, like, it's still very small because we've just started. So most all of our revenue comes from the one people like regular e commerce. So the way we calculate revenue is in terms of ARR and what I saw right now, if [09:57] >> you analyze the numbers that I told you, it's going to be something around $2,000,000 in ARR and what annualized and in terms of gross revenue, it's gross revenue 28% and contribution margin after after you take all the cost is 13%. [10:14] Yeah. So it's about $500,000 of gross run rate after cost of goods sold. [10:19] >> Yes, exactly. [10:20] Yeah. Yeah. That makes sense. Interesting. I guess I still don't understand. So who, like name a company that's using Dolado to buy headphones and chargers? [10:32] >> Yeah. So we are talking here about not any kind of company. We're talking about very small retailers that has usually one store. And we're not going after the retailer, the low hanging fruit, as I said, the retailer that is located in Sao Paulo in Mexico City. No, not this guy. I'm talking about the guy who is in a city with less than 100,000 people. [10:58] So it's like a gas station that needs to put more headphones to Yes. Check Okay. [11:03] >> Exactly. But usually, I'm talking about small electronic store, but gas station that has convenience store, it's also part of the retailer that is buying from. More I [11:15] was gonna say everyone in my audience has probably been to a gas station on a road trip and seen at the checkout. They have like at a station to buy your iPhone charger that you left at home. You are the one that is supplying the charger. [11:25] >> Yes, exactly. Especially the one in the middle of nowhere when you're in the middle of the road in a city that have very few people and you stop there. Yes, that's the kind of retailer that we are talking here. [11:38] Interesting. Okay. So will you ever move? So you're sort of using this marketplace and selling as good as the way to get these folks into your ecosystem, this gas station. You're not charging for the software right now. I imagine at some point though, you will will want to do only software because the margins way higher, right? [11:56] >> Yes. Yes. But the point is, it's a mistake if I go after the SaaS right now, because now what I want is data. First of all, data. The moment I know how much they are buying from us, I have a very good idea of how much they are selling. And this kind of merchant, this kind of small retailer, it's very hard for you to get the data on how much they sell. That's why giving credit for [12:21] >> this segment is super hard because nobody has the actual data. But the moment I know how much he's selling online, the moment I know how much he's buying, the moment I have all the data of the transactions that are going, the real data, then I can provide financial services, credits, payments, charge, assess fee for the use of the platform. But everything needs to happen step by step. If I decided to do everything now, it's not going [12:47] >> to work. [12:48] Yeah. That makes sense. That makes sense. I get the vision. I understand where you're going now. Have you bootstrapped this or did you decide to raise capital? [12:54] >> We bootstrapped in the beginning, but like right after we started, we were approached by some funds like GFC, Global Founders, and then Valor Capital, which is one of the top funds here from US investing in Brazil. Now we have eight funds on the cap table, angels from all over the world, like partners from Lightspeed in [13:16] the Gig, what was the last round? How much was it? [13:19] >> The last round we just announced two months ago was a $10,000,000 round that was led by Valor Capital and we brought like six funds alongside. [13:29] And was that your series A, would you say? [13:31] >> Yes, my series A. [13:32] Okay. [13:33] And then what was before that? Did you close around last year in 2021? [13:36] >> Yeah, yeah. We closed around last year, No. In 2020, that was a seed round of $2,000,000. [13:47] Okay. And anything before that or no? [13:49] >> No. No. [13:50] Okay. So you raised 12,000,000 to date. Now most people in their series a are selling between 1015% of the business. Were you in that same range? [13:59] >> Yes. Yeah. Definitely. [14:01] So you were like 90,000,000 pre money valuation, something like that? [14:05] >> No. Less than that. We I can disclose you the numbers, but we were diluted 15% to be precise. So we are alongside the lines of [14:16] Like more like a 60,000,000 Yes. Still, that's a fairly high I mean, that's a Look, it depends on how you define revenue. If you're able to convince your investors to count your 2,400,000 as your revenue versus your take rate of 500,000 run rate, the multiple looks a little more rational. But if you look at a 500,000 run rate, it's 120x multiple. Do you get nervous about growing at that valuation? [14:38] >> No. The point is the way in my market, in the B2B marketplace, you the multiple is according to the ARR in terms of revenue. So if you look in terms of ARR, and the point is, as I told you, we [14:51] Yeah, but that's SaaS revenue. SaaS revenue will get 100x multiplier and that's six you know, that's two months ago for the market crash, but your take rate is only 26%. There's no way you can I mean, unless these investors are stupid, they're not by the way, because I know Valor, right? They're not giving you credit for 2,200,000 of run rate revenue and treating that like SaaS revenue. [15:11] >> No, definitely not. Because like, as I told you, we are not the SaaS part of the business is free. We are B2B marketplace that also have a SaaS play, but like the way they look at us and the investor look at us is we are B2B marketplace that has been growing consistently. And to be honest with you, if you look at the take rate for the B2B marketplaces here in the region, it's the take rate is [15:36] >> around 4%. So we have like one of the highest margin, even like considering contribution margin in the end is higher than the take rate that everybody else charge. So and we are very well positioned to be one of the largest players in the segment that's just beginning. The B2B marketplace, oldest one has like two, three years. We have the best investors, the team. Yeah, we have higher multiple. [16:01] If you're at 2.2 right now, where were you exactly a year ago so we can calculate growth rate? [16:08] >> The 2.2 when I was in terms [16:10] of You're 2,200,000 run rate right now. Where were you exactly a year ago? [16:15] >> A year ago, we were pre revenue. [16:17] Okay. Pre revenue. Got it. [16:18] >> Yeah. Started monetizing yeah. It's been one year exactly. It's been one year that we started monetizing. One year. I see. [16:26] I see. Very interesting. And how many folks are on the team today full time? [16:30] >> 113. [16:32] 113. Got it. And so, I mean, obviously the markets are down turning right now, right? So like, what are you comfortable driving burn up to? [16:40] >> So our burn now is very well controlled. So we have like more than thirty months of runway because the business is still growing. But first of all, like more than 50% Sorry. To be [16:55] clear, thirty months of runway, you just 10,000,000 divided by thirty months. You're saying you've you've spent about $300,000 a month all in? [17:02] >> Less than that, in fact. A little bit less than that. So it's more than thirty months. I I'm not disclosing the correct number. I'm telling just it's more than thirty months. And our burn is less than the number that you're saying. [17:13] Yeah, your net burn is less than 300,000 a month. [17:16] >> Yes, Yeah, yeah. [17:18] Interesting. Okay, great. So what do you think you have to grow the business to go to a competitive Series B? [17:25] >> So we are guiding ourselves by the milestones that you see on the SaaS napkin by Point Nine, which I think it's amazing way to guide the business, the one that's based on 2021, but the one last year. So our goal is to reach $5,000,000 in ARR with a net positive net positive revenue retention and and also like to reach 40% gross margin as the way I told you, like revenue minus COGS and build the best team. This we [18:02] >> already have, like our C level comes from the top the top marketplaces from the region and keep going on average between seven and 10x compared to the revenue that we had last year. [18:15] So if you watch [18:16] >> those goals, think we are yeah. I think we were well positioned to do a series b. But we don't need to do a series b in the, like, in the short term. So we're not actually considering doing this right now. [18:27] Yep. Well, you're driving. You'll you'll obviously hire and drive burn up. Right? So if you have twenty months of runway and this downturn last twenty four months, then you you have a timing issue. Right? But but you'll figure it out. It'll be interesting to watch. Yeah. In the meantime, though, let's wrap up here with the famous five. Number one, favorite book. [18:44] >> Favorite book? In the context of what we're discussing, Pitch Anything by Oren Klaff. Genius. [18:49] Number two, is there a CEO you're following or studying? [18:53] >> Yes, [18:55] >> I think the CEO, there are many CEOs that I'm following, but the CEO of Tokopedia in Indonesia is a genius. I follow like all his interviews and I really like his vision the way he does. [19:08] Number three, what's your favorite online tool for building Dolado? [19:13] >> Shopify, 100% Shopify is amazing. [19:17] Number four. How many hours of sleep do you get every night? [19:20] >> I need to get eight hours of sleep because like I train really hard and I need to get a good night sleep. [19:28] >> Otherwise, doesn't work well. [19:29] Alright. Eight sounds good to me. And what's your situation? Married, single, kids? [19:33] >> Married, no kids. [19:35] Alright. And how old are you? [19:37] >> 37 next week. [19:39] Alright. Hey. Happy early birthday, Gui. Last question. Something what's something you wish you knew when you were 20? [19:46] >> Oh, man. I wish I could. I'm a frustrated triathlete. I wish I could be dedicating more time to sports, but unfortunately, my life as an entrepreneur doesn't allow me to spend more time on this. So for that, it's a dream that I have not made it yet. [20:02] Guys, Dolado.com.br. Brazil, they help that gas station in the middle of nowhere, which you've seen on a road trip before, make sure they never run out of chargers that they sell out the checkout. You know what I'm talking about? They've got over 1,500 of those gas stations is the analogy we're using that spent about $120 over the past thirty days. So monthly they're processing almost $200,000 of GMV annualized, it's 2,400,000. Their take rate's about 26%. So [20:26] their gross run rate right now is about $500,000 and they're also profitable. They take about 13% to the bottom line. Now that won't stay the case here because they just raised a 10,000,000 series A at around a $50 or $60,000,000 valuation. He's gonna reinvest in growth with his team of 120 sorry, his team of 110 people as they look to scale up past 1,500 customers and now develop and get additional suppliers on the platform. So they're not just [20:46] selling their own products anymore, but they build a really healthy marketplace. We'll see what happens. Gui, thanks for taking us to the top. [20:52] >> Thanks, Nathan. [20:55] One 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 [21:20] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. 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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. [22:24] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.