How DriveX CEO Rauno Sigur grew to $1.6M revenue and 15 customers in 2024.

hey folks my guest today is ryono segur he's the ceo of drivex a technology partner for insurers mobility leasing and dealership companies drivex leverages computer vision offers a quick easy trustworthy way to remotely inspect a vehicle ronnu you ready to take it to the top oh yes all right so who are you selling directly to the insurers are they paying or is it somebody else paying that's a great question yes uh we sell directly to companies and we're also launching a product directly to consumers would like to get help in pre-inspecting cars when you say you sell to companies name a couple of them specifically we're really strong in our in our home region which is central and eastern europe and we work with the largest groups such as vienna insurance group and also ergo which is a part of munich red okay this makes sense so how do you price the tool what will ensure what will a big insurer and estonia estonia pay you uh well there are two factors to that mostly on a general level of course the volume of inspections in a given period let's say a month or a year and what kind of features the company wants because our competitive advantage is how much the company our client can tweak the solution themselves so we're looking at between two to seven euros uh per inspection i see so call it call like like six or seven u.s dollars per inspection um yes and what um i guess help me understand so how does the technology actually work i'm an insurer how do i remotely inspect a vehicle of someone i'm insuring that's a great question so in our region and also in the u.s fraud is a very big issue so that's why insurance companies are pre-inspecting a car that's really important to understand what damages are pretty accident and post accident now with our technology they just need to have the vehicle information such as number plates and bin code generate the drivex link in our system or through api and send the link to the consumer usually with an sms and it's all web-based technologies you don't need to download or install anything and depending on the workflow that the insurance company is using that defines the images and validations then the consumer the owner of the car just starts capturing photos and what is really interesting is that we analyze those images in real time and also provide feedback to the consumer in real time to ensure the image quality and also the trustworthiness of data okay got it so the main in way that you're ingesting data is photos taken from the car owner they send it to the insurer so the insurer can better underwrite the car owner exactly and they use those pre-inspection photos when there's a claim so they can go back in time and compare what was the original condition because in the u.s alone over seven billion dollars per year is paid out and fraudulent claims and they could use that technology too yeah but like i guess what i'm asking is there's no way you're not installing like software on these cars because i mean part of it is what if damage occurs it's non-visible you can't capture it in a photo and there's a claim on that how do you how do you capture that that's a brilliant question again thanks so our vision is to combine different technologies together so today we're in our in our roadmap where we're executing the visual inspection but we also want to incorporate audio diagnostics of the car and also connected car data we can access over the cloud of the manufacturer the car manufacturer to ask fault codes of the car let's say engine or or mileage and so forth so that brings a 360 view on the vehicle's condition and of course there are some damages that really cannot be seen or even through fault codes [Music] 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 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 not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations 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 all right let's jump back into the interview i don't know how many inspections did you total last month we're still in early stages so we're talking about about uh ten ten thousand twenty thousand inspections per month well i mean that's that's still a ton so i mean if you did twenty thousand inspections last month can we multiply times seven bucks per inspection to get your revenue uh yes you could and if we are also updating our pricing right now so the prices i told you was what we have what we're charging right now but obviously we have customers who were early adopters and then the price of course is a little bit the same uh difference i mean cheaper because what we're building is really deep tech and how we are better is that we have customers even before we have the technology so really i think i think it's great you pre-sold it but if you had to look at the average price that these insurers paid per inspection last month on the 20 000 inspections would that be more like four or five bucks something cheaper it's cheaper it's around a few bucks because we launched our product in stages and the first stage we the value we provided was image quality detection and visibility detection now we're adding the damage detection which increases the price of the inspection and the value that we provide okay but just to be clear earlier you said inspections cost six to seven euros per inspection that's obviously a little more expensive than historically what charges because you've matured your product historically you said each one's a couple bucks i mean can we take 20 000 inspections last month times three bucks you're doing something north of 60 000 usd per month well if you make the math then yes well i mean it's not just the math i want to make sure i'm calculating that accurately are you doing more than 60k a month currently not it's less okay when do you think you can break that we actually have the plan to break that uh in the end of this year so we're currently growing about 20 month on over month if we look at the subscriptions in the mrr where we're making okay okay so so you're close to like 30 000 a month right now on revenue with a path to get to 50 or 60 by the end of the year yes i see i see and if you're at around 30 000 a month today in revenue do you remember where you were exactly one year ago uh i would have to say that we were like four or five times less okay revenue like so like 7 000 a month or something something small amazing now how did you put this on a timeline for me when did you guys write the first line of code for this technology what year we started uh we registered the company in 2019 december but actually we had the first customer in place in april 2020 and that's where we really started to build the code and the product so first customer was 20 20 and how many customers are you serving now today we're serving uh 15 customers right now but we're already signing first letter of intents in the rental industry which will be the biggest market of our business yeah that makes a ton of sense of the 15 customers you know you do 20 000 inspections across all 15. does one of them make up the majority of those 20 000 inspections no it's actually quite this distributed so um yeah not a big wheel there what is the biggest one how many inspections does the biggest one do per month i would say they do a couple of thousands of inspections per month yes and that's an insurer or a rental company that's an insurance company but in the rental markets the market need is totally different you have companies who need to inspect thousand cars per day not per month so that's why we need to build the next layer of the technology and make it reliable precise and fast you keep saying we tell me more about the founding team obviously i'm not not the only one so we have three co-founders and we really have experience in tech before estonia is the we say the land of unicorns because we have the most unicorns per capita in the world so we did it before in the banking industry in the governmental industry and also last month technologies so i was in sales kenti the cto he built the product builds the product and also the cpo was a sorter analyst i see and did you guys all split equity evenly at the beginning there are two ways to do that yes one is equally but we did it the other way around which is what i can't disclose the exact uh equity amounts but we have to really dive deeper what is the role of each person and also how much it's worth um given though give me an example give me an example i mean don't don't share individual equity amounts but why might you get more equity than the analyst for example um well we analyzed the job description and the ceo really really has to overlook everything in the company including in the product area the development area and also the sales and business development plus uh fundraising so yeah there really are two schools of thought here so are you the ceo do you own the most equity yes i see and then what the cto is the next most and the third co-founder is the next most all right put it like that yes all right cool that's helpful because there's folks listening right now thinking about launching their own companies and you know just splitting equity equally is rarely the right answer it's lazy it just means you didn't have tough conversations yeah and i recommend to have those tough discussions right in the beginning and there were several because obviously it needs to be well thought through and argumented yep yep that's that's right that's right and now tell me more about how you guys have funded the business are you bootstrapped or did you raise capital we have raised uh to date 1.2 million euros which is like 1.4 million in u.s dollars about so and is that one round or multiple rounds two rounds we have done a pre-seed and now the first seed round just closed it we have all supplied and played ventures from silicon valley how much was the seed it was 1 million us dollars and then there was a 400 000 pre-seed last year yes well actually 300 000 300 000 last year precede now most folks in their seed run are selling like 20 of the business were you guys were in that same range you could say that yes um and we really why estonian startups are so great is first the amount of money raised versus the actual revenue there's a good balance between those two and also really thinking how much equity do we really need to give away how much capital do we really need not taking less not taking more so we did a very extensive analysis about that too yeah if you sold 20 you raise it a 5 million valuation post money yep that's the ranges is pretty much true and was that with an estonian investor or did you race from the states or somewhere somewhere else yeah as i said uh before there were a lot of uh unicorn and suni corn founders who back are backing us from estonia and the region but the lead investor came from central europe czech republic because that's one of the key markets we want to enter and establish ourselves as dominant players but uh and and uh plug and play ventures from silicon valley to bridge us in the next round to the big market we're after the u.s market name some of the top sas unicorns in estonia well the original unicorn was skype yeah and not many know that uh that was estonian but then we have uh veriff which is a know your customer unicorn then we have transferwise which is now called wise for payments um there are i don't know 10 unicorns at the moment actually very cool all right tell me more about your team how many folks are full time we have 11 people full time and i would say 50 of those are product people we have all our core expertise in house and including sales and marketing and last question here as we wrap up i mean how do you go now branch in and go from 15 customers to 30. it sounds like you're going into the rental car space because there's just more inspections happening how do you land that first customer there we're actually doing it right now already and and really uh having those letter of intents in place having paid pilots and developing the product exactly based on the market's needs so it's a standard procedure and the goal by the end of the year is to have 40 customers so um [Music] you're taking you're taking for granted how hard it is to get a paid pilot a lot of my listeners are trying to figure this out so it's not i'm trying to help help you teach them effectively right so when you say a paid pilot have you mocked up a spec of what the thing will look like for the rental car company and said pay us now and we'll build this over the next six months or like walk me through what you sold in the paid sure sure well it all starts uh doing a bunch of interviews first like really listening to the customer and doing the mom tests we have to learn that too not to sell too early not to sell your idea rather to learn their processes and their problems and their ideal product that they're looking for have they even looked into solving that problem before and then building the mock-up like the click of a prototype and showing combining that together with the live demo of the product and the clickable prototype that's what we're doing right now what did you use for the mock-up prototype you're talking like sigma yes stigma is a great tool for that we use that as well uh so yeah the clickable product no engineering yet you're you're selling with the clickable sigma file yes exactly exactly and then and then let me just play devil's advocate the car company is going wait guys i'm not paying for this you don't have anything built yet and you're saying no you've got to pay us this amount up front like how do you negotiate that uh that's that's that's where the skill comes in but i guess the key thing here is how to find and identify the early innovators who really want to develop this with you and they're ready to maybe just put a small monetary commitment there what is small audio what's the size of it well we could do a pilot where they just inspect i don't know 100 cars and pay i don't know 500 euros 500 bucks for that but that shows that the customer is serious they want and they they invest their time to provide feedback uh and and you know measure the kpis because then we can do the next iteration and build even the best product because they're not paying for like a sass fee up front they're paying a one-time fee 500 bucks to do 100 inspections and you're hoping you can get them into a more recurring fee later on there are clear kpis so if we deliver those kpis well definitely the speed of the service sla like how how fast should we detect those damages then um at the precision rate how many damage should we detect water or the false positive false negatives then uh the customer satisfaction ratings how much that the people loved uh the inspection process how easy it was and and of course the savings uh i can't go into details here like the monetary savings compared to the whole process yep that makes a ton of sense okay very cool let's wrap up here with the famous five number one what's your favorite book 48 laws of power number two is there a ceo you're following or studying i think elon musk yep number three what's your favorite online tool for building drivex online tool for building drivex i think uh unlock it's like a tool for connecting remote teams together and having fun activities together number four how many hours i sleep to get every night this night on average average eight yeah okay i i need to rest well and ronnie what's your situation married single kids uh i'm in a relationship and i hope to take it to the next level soon that's awesome and how old are you i'm 31. 31. last question what's something you wishing when you were 20 uh can you repeat please something you wish you knew when you were 20 years old that i can make it i just have to believe in myself guys there you have it drivex dot io helping insurers help consumers do more reliable car inspections to decrease fraud he processed 20 000 inspections last month which generated thirty thousand of monthly recurring revenue up from seven thousand a month just a year ago so healthy growth rate team of 11 today they raised 300 000 precede last year just raised a million seed round on a 5 million ish post money valuation now scaling 50 of their team are engineers focused on building the next gen iteration of the product for rental car companies more scans more revenue more accuracy problems they'll figure it out ronnie thanks for taking us to the top thanks one more thing before you go we have a 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