Elly Analytics Revenue, Valuation & Funding (2024)

guys allieanalytics.com it is your Omni Channel your single source of Truth for Omni Channel attribution he built the 100 person agency and then spun out Ellie analytics a software company in 2018 they're doing fifty thousand dollars five zero a month today in Revenue up from twenty five thousand dollars a month just a year ago so a nice growth rate they raised 360 000 in pre-seed funding last year out of 5.3 million post money valuation they still have about 150 000 of cash in the bank net burners twenty five thousand dollars per month so four to six months of Runway but some of us said that they are growing nicely which they are adding on new customers today they've got 30 customers paying on average twenty thousand dollars per year as they look to scale north of a million dollar run right here in 2023. hey folks my guest today is sevo unisov He is building Le analytics at Ellie analytics.com it's a second time founder founded a digital marketing agency back in 2004 when he was a computer scientist student he scaled the agency to 100 employees and transformed it into a self-managed dividend business he spun off La analytics four years ago initially bootstrapped and raised his first investment last year 600k and committed ARR growing 2x year over a year with a 90 logo retention rate save are you ready to taste the top yep all right very cool so let's go back to the agency here for a second what were you selling to to agency customers so uh we're responsible for growing revenue from digital channels like Google ads Facebook ads landing pages conversion rates uh and typically we just were responsible for the whole Channel gotta and were you think like a 5k monthly retainer for six months or how did you structure pricing uh most leads was retainer plus success fee based on the results okay how did you make sure that you could attribute the results to your work directly so you could get that extra fee uh um we started creating full funnel uh dashboards back with them when we're at agency so we're looking at all of the data and actually knowing where each of customers came from and this is how we attribute them to our channels interesting makes a lot of sense okay so what happened to the agency why did you shut that down or spin out la I didn't shut it down it's actually up and running uh it's just a separate company now I've been building it for 14 years and at some point uh I got this okay I've me and my partner will build that marketing agency uh it was bootstrapped uh and uh self-managed dividend business now and it's in Europe and now uh I want to build a venture company uh software company and in U.S this makes sense so what did you go to market with when did you launch the software product officially what year uh we launched it in 2019 uh and it was like part of the agency and then we spinned it off to a separate company okay so you launched in 2018 now how did you spit it out does the agency own any Equity at seva.com or no it's totally separate no it's totally separate okay totally separate interesting and so 2018 is when you spin it out when you spawn it out what did the team look like did you bring a bunch of people with you uh yeah we started with a small team like six or seven uh persons uh basically if we found first six customers and started building uh platform and dashboard for them and then um using the that experience and expertise and those clients and their team to build platform and transition it to a more uh software like business and so today how much monthly requiring Revenue are you doing monthly recurring Revenue um so we are at 600k ARR that something around 50k per month okay and what are you what are people paying on average per month to use the technology so earlier customers pay less but now we have this structure we start with 1K per month that grow to 3K per month and the biggest clients pay 6K 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 the 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 evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder 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 going to 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 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 around 3.7 raise they sold 22 percent of 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 valuation than what you can get now inside of founder path 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 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 walk me through the story of how you got your first customer uh well as a founder of marketing agency had a lot of exposure to all the clients so like uh first clients I got them from my personal Network and from the agency audience and what was the first sale price do you remember the price of that first plan uh it was something like uh 10 key for integration and 1.5 K per month for subclusion interesting so they didn't they didn't get upset at the 10K setup fee huh uh yeah so we they paid for we thought that it will be enough but actually it took longer and more expensive for us yeah so they played part of the building price and then uh transition to subscription okay so you're doing six hundred thousand dollars a month today or about fifty thousand dollars a month in Revenue where were you exactly one year ago do you remember like exactly two times smaller okay so you're doing about three hundred thousand dollars a year exactly one year ago yeah about 25 000 per month interesting and how many customers are paying now today okay actually one uh small correction uh the overall Revenue was higher because we used to charge for the integration separately and that gave us additional cash flow uh and now we transition to subscription only how much total revenue did you do last year um I think something like 400 or 500k per for the whole year okay so there is about call it 40 to your Revenue came from sort of one time or set up fees yes okay very cool what's the plan this year what do you think your Revenue two um I think at least to one million but we're actually targeting 1.5 million in solution Revenue per year okay well we certainly hope you get there have you done all this bootstrap or have you raised initially bootstrapped and used resources from the agency and will start raising our first external money uh in November and December last year uh we raised 360k at uh 5.3 million valuation and so you consider that your seed round it's between if you can see it yeah yeah yeah well congrats on getting that done how much of that money do you still have in the bank or did you spend it all immediately uh I think at least half and no not I think half exactly okay so you have a hundred thousand hundred fifty thousand dollars cash in the bank today how many months of Runway does that buy you uh with the current burn rate uh it's uh I think four to six months but we're flexible there we have our our recurring revenue and it's growing and we have additional money to spend more on uh one-time projects to boost our growth so if you have if you have 100 000 in the bank and you've got right in your right way four to six months that means your net burn monthly is about twenty five thousand dollars per month what are you spending money on today uh we hired couple more developers but mostly we're spending on uh um sales and marketing efforts okay how many folks are full time uh 20 something oh wow you're getting up there you have to deal with people problems then huh no actually because I managed agency at the 100 employees uh it was significantly more difficult until any number below 30 people it's very comfortable skill for me of the 20 folks that are full-time how many are engineers uh uh I think five developers eight uh marketing data analysts and engineers so there's eight Engineers total depending on how you count how many people write how many people write code on a monthly basis um five five okay very cool that's great and now do you do you have sales reps that carry a quota or are you too early for that uh we hired our first rep recently uh but before that I've been closing all of the deals myself and also we rely heavily on our partner Network for uh lead sourcing there's a lot of Founders are saying right now doing half a million Revenue thinking about their first sales hire and they don't quite know how to structure the compensation package for that first sales hire how did you do it Instagram um so first we tried like a standard approach like uh base compensation plus uh fee plus chemical commission from sales and um right now I'm um I actually want to hire several sales reps part-time uh with fixed compensation and commission like to try more things uh understand what's working better and then scale it oh but you didn't answer my question what's the comp structure of the first sales hire um it's like uh so right now we transition to part-time but initially we tried like ATK base and 80k uh in commissions and and how much would he have to sell to earn the 80km commissions um 1.2 uh deal per month one so what if he only closes one deal like what does 1.2 deals mean it's on average to get that that compensation so you want him to do 14 Deals per year 1.2 times 12 months yes okay so 14 Deals per year and what would that mean for you in terms of new Revenue if he closed 14 Deals um it will add around 600k in subscription Revenue okay so you're paying him eighty thousand to add 600 000 of ARR isn't is that ratio a little option they earn more it's 80 base plus 80 commission so it's uh 1.6 yeah it's 150k into into 600 kot like OT so if you divide 600 000 of new AR into the 150 base plus commission salary that was essentially a 4X multiple um I'm just asking you from your perspective due to that feel like a good ratio to you for a first-time sales higher um I think so yeah and one additional important thing here so we allocate up to 400 hours of uh our team to uh build um so actually on board the client and build everything needed using our platform uh so my initial like business model is that it was spent around 30 to 50 percent of the first year revenue on the sales and 30 to 50 percent of the first year revenue on onboarding and then clients stay with us for many years and this is where we make money how many paying customers today several dozens okay so I got a 36 something like that something like that yes okay so uh six hundred thousand dollars of AR divided by 36 customers each one's paying about sixteen thousand dollars per year or about fifteen hundred dollars per month um I think okay a little bit maybe 30 clients uh average is 20K and new clients they uh pay more in subscription but they don't have to pay anything in uh for for integration I see okay that makes a lot of sense how are you getting new customers today what's your growth strategy uh so first uh we've got a partner program uh so marketing experts um who consult their clients when they see that they need that their client needs solution like ours uh they bring us in and uh we build like full funnels uh multi-channel uh attribution and dashboards for them and this is like half of our new clients and the second half is personal Network and uh outbound how much are you spending on outbound uh like we just hired our first trap and this is what's understanding oh I see but why didn't it work though you said he was full-time and you moved to part-time um I feel like with current cash on hands it's uh a little bit too too expensive um so this is why we try a little bit different strategy and at the same time well we started with the test period with uh with that sales rep and um uh actually if he found another job at the same time and closed his first deal so now he's working like part-time for us and continuing that and this works best for all of us um that makes sense talk to me real quick before we rap about Equity or do you have a co-founder or your sole founder um I'm I have a co-founder uh but I'm the one responsible for uh managing and growing this business so do you own more than 70 of the company um so I have a partner and we have several businesses but each of one is responsible for one of them we have uh 50 50 uh in all of those businesses this one is just my responsibility I see I see that makes sense on that note say but we're rooting for you let's wrap up here with the famous five number one what's your favorite Business book um good to Great by Jim Collins number two is their CEO you're following or studying uh uh Andrei who seeds the founder of Miro number three what's your favorite online tool for building Le Analytics um [Music] Google Sheets and basically number four how many hours of sleep do you get every night uh six to nine okay and which situation married single kids single okay no kids and how old are you 36 36 last question what's something you wish you knew when you were 20 years old um that the world is really big and I can explore it and find the best place to leave and best opportunities for me guys La analytics.com uh it is your Omni Channel your single source of Truth for omnichannel attribution he built the 100 person agency and then spun out Ellie analytics a software company in 2018 they're doing fifty thousand dollars five zero a month today in Revenue up from twenty five thousand dollars a month just a year ago so a nice growth rate they raised 360 000 in pre-seed funding last year out of 5.3 million post money valuation they still have about 150 000 of cash in the bank net burners twenty five thousand dollars per month so four to six months of Runway but some of us said that they are growing nicely which they are adding on new customers today they've got 30 customers paying on average twenty thousand dollars per year as they look to scale north of a million dollar run right here in 2023. save up thanks for taking us to the top thanks for having me one more thing before you go we have a brand new show every Thursday at 1pm 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 our poo 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 p.m 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 their 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 SAS World whether it's an acquisition a big fundraise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation 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