How ENACT SYSTEMS INC CEO Deep Chakraborty grew to $8.4M revenue and 100 customers in 2024.

hey folks my guest today is deep chakraborty he is an entrepreneur business leader currently leading in act an award-winning cloud platform that is for the distributed energy industry the company's on its fifth year with market leadership globally in the sector of software platforms for solar and storage deep are you ready to take us to the top absolutely okay so when you say global leader in this space how do you measure that we measured by a number of users customers and projects so an ex-platform processes over one and a half billion dollars of projects now for solar and storage across the world in 23 countries and um we have deployed over three gigawatts of projects we always measure in terms of capacity okay and is that historically over the past five years or just in 2021 uh the run rate is in 2020 since feb september 2020 we have uh process of one and a half billion and of course just to remind you we are a software platform we are not a developer we are not selling any hardware or financing anything we're just doing what we call the solar life cycle project management software and so that's really unique having a platform that's so active in so many countries so what does that mean since september 2020 you put 1.5 billion of solar projects through your platform what does that mean so our platform is unique it's a cloud software hosted on amazon used by both solar developers and installers as well as the end customer and what it does is automates the entire journey of the project so they can pick any address in the world design a system remotely generate signed contracts and then execute the project all tracked online and of course the end customer they're spending a lot of money on these projects you know to save money on the electric bills and as well as doing the green thing they're able to measure the benefit too for the first time in dollars so we project the benefit in dollars and then we measure it so we're really making it transparent for customers and providers to now do these transactions seamlessly using an independent platform that is you know the source of truth and so this platform has processed over 100 billion dollars of projects in the last 12 months and deep across how many customers so we have uh over 100 enterprises in 23 countries and thousand plus users users meaning people who actually log in and do work on it industry of course is a niche solar is not a massive industry but even in the u.s you know there's a potential 50 000 plus users for our platform and we've already crossed the first thousand what does the average provider pay you per month per year to use the technology to manage these solar installations and projects the average company you know this smvs are small and medium companies which is the majority of the market they're spending less than ten thousand dollars a year to use the platform and it's a you know user per month subscription model the end customer which could be a building owner a home might spend only 50 a year on the app a large commercial hospital might spend a thousand dollars a year because their system is much bigger when you look at your revenue over the past 12 months what percent came from the providers versus the homeowner wanting to track their energy usage and tax rebates and things like that great question so we actually launched with the providers uh first in 2015 and that platform is still 80 of our revenues the end customer app which is now on ios and android 2 that's less than a year old it's growing really quick but the revenues are 20 of the total because it's a new offering how many homeowners are on it so far or or larger facilities with solar installations yeah we have crossed a thousand homes last quarter and q3 and in specific markets you know specifically markets like california where we are in or even across the world like in delhi or in dubai the pockets of dense use because we have very active platform users and like for example in delhi now we have crossed 500 users on the platform in the city of delhi who have solar and it's growing rapidly because of the ecosystem we've built there so the 100 providers which is 80 to your revenue paying on average ten thousand dollars per year that would mean you're doing just on that side of the business about ninety thousand dollars a month in revenue is it accurate yeah i don't want to disclose our revenues but i will say that we are right now uh around a million dollar a year run rate in revenue and it's growing um rapidly especially the last 18 months so you'll break a million in terms of run rate by the end of the december okay and where were you exactly a year ago so we can calculate growth rate we were much lower probably like we've grown about 40 this year and so which is very uh great which is a great growth rate considering we haven't really invested much in the business we're still bootstrapped there's no venture investor on this we are not institutionally funded so you own 100 of the business no our employees do i mean every employee has equity in an act but together the founders and employees still own the company you have no institutional ownership how much of your esap pool did you try to set up i mean we're talking 10 20 to employees or more we have always done you know uh we have maximized the esab grants uh legally possible in the last five years but employees uh typically in the us have you know an annual esop cannot be more than fifteen percent of your holding and we have tried to maximize that so yes together the employees and founders own the majority of the company we do have those some equity investors this year we have announced that you know early stage sas investors family offices they're on our website we also now listed on start engine oh sorry so how much did you raise in equity we have raised almost 4 million dollars now but our cumulative revenue has been more than that so we're kind of leading by example revenue comes first so sorry four million you closed this year we have closed four million dollars of equity investment in nx systems since launch and uh of course the first round wasn't 15 which was announced in the 18 we got seed investors who took preferred shares and then we also got early-stage sas investors now uh in the last year who are helping our you know growth specifically break deep break this down for me so the sas investors this year how much did they put in uh we have raised 700 000 on sas investments i think you should go to crunch base it should have the exact numbers please don't quote my you know numbers on the interview i don't have them on the top of my head but crunchbase has all the exact details and on our website we have lists of investors also i understand but i i want to capture more of the pattern here right so so when you did the round in 2015 what like why couldn't you bootstrap the business and and how much did you raise from those family and friends or however you did it to get the mvp up uh we still uh so what's the question exactly again could you repeat that how much did you raise in 2015 to get the mvp live we raised a million dollars in uh 2015 may which was announced release and then we were probably the only company that has gotten a u.s government grants department of energy grants to develop a platform which is patented by the way it's a blockchain enabled platform and that in 17 so we could not have done it with just a million it's a massive platform now active in 23 countries same product but yes the government grants helped us and then we raise money in 18 19 and 22 make sure that we have always run away for growth because we've been hiring employees in the us as well as in india and some other markets so i see you raised 1.4 million in 2018 from mb ventures i don't see anything in 2019 though what did you raise in 2019 uh 2019 and 20 i would i will email it to you separately i think there's some disclosures out there reg d probably not all of it is on crunch based but i think you should all have it in crunch base if you have like a an account there if you well no no deep it's not because i'm in my research team looks at crunchbase obviously that's a public source that is not list there is no round listed under in inac systems in 2019 on crunchbase so you use start engine it sounds like to raise some capital in 2019 is that what happened no we just got listed in start engine last week and we are sec approved for start engine i think we have already raised almost 100k on start engine in two weeks uh it's a great way for you guys to spread the word you know individual investors never get a chance on these um let's say accredited rounds so we're seeing good traction there okay so so this year so start engines just now but going back a little bit you said you then raised you know whatever it's it's 1.1 million on convertible note here in 2020 2021. so let me give you what i'm reading of start engine so million 25 may 2015 then we raised 1.8 million may 18 and then we have raised 1.2 million between 2019 and 2020 it's also on crunch base arka ventures is our lead investor it was announced in january of 2021 arka ventures which is part of a billion dollar venture capital firm the early stage arm and then we also raise money from olympus capital uh it's also known so i think i think maybe this uh crunch base you have is a little old and i'll email this to you i know deep it's the exact same crunch base you're looking at we're looking at the exact same data okay um i'm looking at literally right now on my screen so so just to be clear though the reason i said this is you just said that you're bootstrapped you are not bootstrapped you raised 4.8 million so you've raised 4.8 million to build a million dollar your business in other words you raised five bucks for every dollar of ar you currently have correct uh we have also generated four million dollars of revenue while we raise four million dollars of capital under i want to correct you there we have raised three point five is equity and one million is grant i think we're proud of the fact that we have actually generated more revenue than what we have raised we you know our competitors have raised hundreds of millions of dollars probably raised and one of our competitors has raised 321 million well deep here's the problem though you raised 1.2 seed in 2015. you only grew 50 now by the way if you're a bootstrap this growth is fine right growing 50 year over year at your stage growing 50 year over year and you're on the vc track that's not a good growth rate that's that's a really bad growth rate actually you should be doubling or tripling you every year why aren't you growing faster well we should definitely we will we are doubling and tripling but we can only grow once we build the platform well no you're not doubling or tripling you said you're doing 62 000 a year a month a year ago and that you grew 30 to 50 percent year over year and you're about to break a million dollar run rate that's not fast enough growth for the vc capital you've raised you're absolutely wrong there so two things first we haven't launched our engage until 2021 as i told you the engage is the future which is the app for the end customer on ios and android which just went live on ios in june so the whole platform wasn't really live till now and the year we have gone live we are in delhi dubai and dc at the same time 18 employees and a million dollars spent we're growing at a rate which is unheard of we are the only platform sorry i just i want to make sure factually you're accurate you're not growing at an unheard of rate you're growing at a rate that is way too low for someone that's raised 4 million bucks of vc capital it's way too slow yes slow relative to some some other platforms which are pure b2c but don't forget we haven't finished building the platform yet well you're not b2c you're b2b 80 of your revenue is coming from providers paying you to manage 1.5 billion to spend correct uh no we have both p2b and b2c remember so i think uh you never ask me what the platform does and how it works let me explain that to you but that will probably help you understand what it does the b2b is definitely a history which is where we started but that's not where the market is consumers when they go and get their solar systems and now they have to measure that's really the market which we have launched in 2019 and 2020 and that's the growth we're seeing now yes it's only 20 of our revenue but that's where the future growth will take us to a huge potential of course it takes time to build the b2b first right you can't have b2c without the b2b in the back end and that's what you're referring to as a slow growth well yeah but when you say that other people have raised unheard of amounts it's because they're growing faster than you that's why they're able to raise so much i don't want to comment on raising money it's a good thing but we are proud of the fact that we have gotten to a point where most of the revenue funded the company not you know unheard of capital before it was needed yeah i just want to die there because you said i wouldn't have driven so deep here if you didn't say you were bootstrapped at the beginning of the show you're not bootstrapped you've raised a bunch of powers you were never bootstrapped you raised 20 you raised 1.2 million in 2015. you were never bootstrapped uh yes you're correct that in 2014 we were completely bootstrapped and 15 we definitely raised many and then as we grew we have gotten in family office and angel investors right not institutional capital and that's very different from some of our competitors fair fair that's fair i agree with you on that okay so tell me more about the team today how many folks full time we are only 18 employees seven in california 11 in india oh wow how many engineers um of the well i would say of the 18 16 are engineers so we are definitely tech focused and product focused we don't have a big sales team yet the product is uh literally selling itself when you raise the 1.2 million i mean most companies are selling 10 to 20 percent of their business every round were you in that same sort of range we were always uh yes very similar okay so how do you think about dilution i mean you're getting diluted like crazy here every one of these rounds uh as i said even after all this money raised the founders and employees own more than majority of the company i think we are the point now that the platform has finally achieved what we wanted to do five years ago that we are ready for growth and we're not really looking at our you know holdings i think in terms of value the platform can do significantly more revenue and we will need capital to grow that so yes we are ready for dilution uh because we know that will create value for investors and us that's the bet that it will create value that that's the bet right you also lose optionality when you raise at certain valuations because that means you obviously have to grow into that valuation and then it takes certain m a opportunities off the table as well but it sounds like you have you plus the esop pool is 60 70 percent and investors own caught 30 40 percent today as you scale correct and other founders not just the south pole we have two other founders who have battled with the battle with me on the trenches the last six years so um we we know what we are up to and you know it's a very exciting time ahead i'm sure you're reading what's happening with solar and storage i mean if you have three founders again i'm assuming like esop pool is 20 and then that means you three founders start splitting the other 40 percent and investors on the other 40 i mean so you're already diluted down to like 10 15 percent of the business right i don't want to comment on you know holdings because i'm not legally allowed to uh but i will say that no our founders and employees together we are well above 60 total um and you know in terms of investors we know that will change right when we announce our next rounds in q1 and q2 next year what do you mean investors will change as we bring on more investors obviously we know that we'll get diluted and that's okay we're ready for it no issues got it makes sense how are you getting new customers online you know we have b2b and b2c marketing so both ends are active most of our customers you know especially in the po since the covet changes we're finding the need for software is significantly higher than before and people are willing to buy and pay and use something online with a webinar or a zoom call like this we have no on-site sales it's all inside sales how many sales i mean what you have one inside sales rep we have you know three people selling in the company including me one of course is myself you're looking at him one in the us and one in india with three people we have gotten over a hundred customers in twenty thousand deep let's wrap up here with the famous five number one favorite book favorite book um gosh that's a tough one um sherlock holmes number two is their ceo you're following or studying elon musk number three what's your favorite online tool for building an act online tool for building an act um jira number three how many hours of sleep to get every night i always get my six hours that's good in situation married single kids we are married two kids high school and middle school uh we're in california and we're enjoying the weather of course finally it's raining here for nine months of drought and how old are you i'm 45. last question something you wish you knew when you were 20. la uh that's uh i wish i knew how hard it is to build a company from xero and uh this is my first one guys in act systems working with uh folks managing solar installation projects over a hundred enterprise customers put 1.5 billion to the platform since they launched five years ago they've raised caught 3.8 to 4ish million in total capital some of that is obviously grant money as well but team of 18 scaling out they just launched their consumer app so homeowners can track tax savings and usage of those installed solar panels and that is their fastest growing revenue stream they're flirting with a million dollar run rate today up from you know six hundred thousand seven hundred thousand dollars a year run rate just a year ago deeper rooting for you thanks for taking us to the top thank you so much nathan appreciate the opportunity 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 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 deeper and further we have by far the largest private slack community for b2b sas 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 for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 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 got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya