ExperientialEtc Revenue, Valuation & Funding (2024)

guys experiential Etc was launched in 2017 they hit a million dollars of Revenue the past 12 months after raising 150 000 precede around in 2020 at a 2.5 post money valuation they just closed a whole months ago and knew 200 000 of funding at a six million dollar post money evaluation he's opened a girl from a million bucks in Revenue to 3.5 million over the next 12 months historically his Revenue has been split 50 percent SAS 50 to one-time activations launching a new product called x-bot which will help Brands like h m retailers understand heat maps in their store launch real-time promotions and generate Roi he's making a big bet that he can sell three million bucks worth of that over the next 12 months hey folks my guest today is Quran bardwash he is the founder of a company called experiential etc.com and AD Tech experiential agency using technology for brand communication crony radio takes to the top yep all right give me give me an example of a customer that's using you guys today all right so uh we just doing something for KPMG uh the one of the big fours and we've created an innovation Center for them uh this this kind of entails right everything from facial recognition to RFID scanning to virtual reality Games to a huge tabletop which shows all the stories about where all KPMG has touched different lives in different sectors we are creating something in the augmented reality space as well so that's as far as your uh KPMG is concerned but yes uh all in all experiential Etc is known for creating uh such Tech based activations for B2B clients uh it could be permanent installations it could be rental activations but mostly we are used for brand launches as well so just because software you're selling or are you doing custom agency work for every client so it is it is a software as well as the hardware so we are mostly a hybrid agency we recommend the user Journey we understand the communication of the brand what they are wanting to launch uh what they want to achieve and design the entire software and then we can recommend the right kind of Hardware that should go along it could be uh mixed reality headsets it could be virtual reality headset it could just be a mobile phone using augmented reality it could be an interactive projection it could be emergency manufacturing your own Hardware devices or you're working with vendors now we're working with vendors but we manufacture our own software so we are a software first agency moving towards uh from a semi SAS to a completely source-driven business and so right now like the last 12 months we split revenue on a percent basis how much how much was SAS versus not SAS uh well the last 12 months I would say it's kind of 50 50 but in the last quarter it's kind of 70 towards sauce base and 30 towards nonsense okay so what's the average customer paying you per month just for your your SAS offering uh would be anywhere about uh fifteen to twenty thousand dollars per month or per year uh no for per campaign so it could not be a recurring campaign right even if it's a SAS driven thing it could be probably once and then the next month it would not be uh executed and it would be a month after that but per customer about 20 25 15 or 20 000 what's the crown then it's not recurring Revenue right so it's it's one-time campaigns that you launch using software but that doesn't give you any predictability in the future revenue streams correct uh while the revenue streams are projected in such a way that all the uh softwares that we have deployed they kind of have a longevity of about a year's time uh the client is tied with us with respect to annual maintenance contracts with fixing the bugs with ensuring that the software is okay why don't you charge for I guess I don't understand why don't you charge for that I mean if you're there which are the small subscription piece so it's interesting so what's the subscription that's what I asked what's the subscription fee they're paying you monthly so that would be about eight to ten thousand dollars okay and and that's after a twenty thousand dollar setup fee absolutely okay got it so eight thousand dollars a month and that's making up fifty percent of your Revenue uh over the last 12 months and then the other 50 revenue is going from twenty thousand dollar setup fees to custom work and the launch correct correct and this is just the SAS business I just I just said the split between your revenue is 50 SAS and 50 agency and your response was that's Wait no that's just this ass business I'm confused okay glad to beat myself so let's say the overall business right now in the last 12 months has been more than a million dollars and out of the entire million dollars about 400 000 has been completely SAS or semi-sas business right now out of that 400 400 450 000 each and every client is paying me about twenty or thousand uh on a monthly basis and then I'm charging them about eight to ten thousand on a recurring basis well no they're not charging it you're they're not paying you 20 000 a month you just told me they're not paying you 20 000 a month you said they pay it one time and then they'll ask for one campaign that is while I'm setting the entire software up right in the beginning but then on a monthly basis I charged I made to ten thousand 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 evaluation 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 round 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 yeah so it's not 20 000 a month I just want to make that clear you keep saying that you're paying 20 hours a month they're not paying 20 a month they're paying you 20 000 to set it up and they're paying you eight to ten thousand per month after absolutely correct absolutely absolutely correct yeah okay so when you say four you have a million in Revenue the past 12 months 450 KSS what's the rest uh while the rest would be activations like projection mapping uh drone shows immersive rooms Innovation centers experience zones brand launches and stuff like that it's a one-time campaign sort of stuff that's one-time campaigns absolutely correct and is that number accurate you did about 1 million Revenue last year uh yeah in the last 12 months more than a million and what will you do this year you think uh 23 24 we have poised to do about 3.5 to 4 million dollars and and what's going to drive that growth from where you are today so uh to fuel our I mean the activation business and the clientele that we have got and the team size that we've got is anyway uh uh egoing but then majority of this is going to come from a product called Xbox so what we are doing is we are launching a a bot which is going to be placed in source and this is where the entire SAS based pivot is going to come through uh this bot basically is good so let's say Zara is already my client h m is already my client uh and I've been servicing them for one-time campaigns for all these years uh whether it's for facial recognition or social media campaigns and so on and so forth now I'm consolidating everything in one uh product which is called the export and this piece of Hardware is going to be kept in the physical store so when I walk into the physical store it's going to identify me because it's going to link my uh social media accounts it's going to tell me what I bought the lab now last time and if I can pair the same thing with something which is kept in aisle number six in shelf number seven it's also going to tell me which are the best marketing offers that are running and essentially understand my emotions and also do a little bit of gender recognition now from the store manager's point of view it is also doing the heat mapping it's also telling the store manager which products are doing well which is the cold space which is the hot space What are the kind of offers that are running and which are the one that you know customers are latching onto more which are the social media campaigns what is the target market so this export is basically going to be the consolidation of all these products that we have done all over the years and you know it's it's going to be more of a recurring Revenue how much will it cost you to create one Xbox the piece of Hardware or Xbox sorry so yeah so uh the piece of Hardware is going to cost anywhere about uh 75 to 80 000 because most of the research on it has been done over a period of the last three years just to be clear you'll spend 80 000 producing the hardware and then you'll upsell it to the customer yes absolutely what gives you the confidence that you can produce Hardware I do come from a manufacturing background no so what happens is when we are doing facial recognition when we are doing uh gender recognition when we are doing it heat mapping all this Hardware that we have procured over the years we have essentially deployed the software in the hardware that has given us enough understanding of how the hardware works now what we are going to do is we have kind of procured all the hardware whether it's the biometric lenses or the RFID scanner scanners or the eye tracking mechanism we have procured all this Hardware we're going to assemble this create a bot create a software and deploy the software the clients are already ready with us we just have to place the hardware and charge them on a subscription basis my question was it sounds like right now you're using other people's Hardware you now want to build your own Hardware called the xbot how do you have confidence you're going to be able to go build a manufacturing plant to make ninety thousand dollars manufacturing the hardware I'm sorry if I came across like that the hardware will still be sourced it's the Assembly of these different pieces of Hardware so I'll have a robot where I have a biometric scanner where I have an RFID scanner everything be in that Bond right so I'm not manufacturing anything so when you say it's 80 000 to create what did you mean when you said that to assemble the entire thing put together and uh give it a nice canvas so that it's also appealing because I'm from a communication and a branding uh uh you know a company so my intention is that it should be good to look at and it should be interactive as well so which is what is going to take uh about 80 000. name a name a company that you think will pay for this uh anybody in retail so let's say Jack and Jones uh uh h m Being Human an agent so let's use h m audience obviously known as h m right h m clothing store what do they use right now to get this stuff done they're not using anything they have an inventory management system that the store users uses to uh calculate as to how the inventory is doing they have an Erp management system which is calculating the billing they have a staff management system all these things are separate right and they're separate for certain reasons but they have nothing to do uh nothing to execute the promotional bit of it uh from an angle that it should be an Roi Centric thing so because we've been doing individual promotions for them nobody has been able to understand the value of something like this which is kept inside the store and which interacts with uh why would h m take a bet on you though why why do why would h m believe that you could install this big expot thing in their store and combine all these things when in the past all you've done is promote one-time promotions for h m but when I did that one-time promotion for h m uh hypothetically I have already done gender recognition for them I have already done facial recognition for them so they know that I can do facial recognition gender recognition I can do social media campaigns now all I'm doing is consolidating everything I might have sold them each of these experiences for let's say 30 000 each but now I am giving them something upfront and don't quote me on the amount let's say upfront on fifty thousand dollars uh on one time payment and then take a recurring payment of twenty thousand dollars per month and sign them up well now it's getting cheaper you started by saying it was 80 to 90 000 now it's fifty thousand dollars so ninety thousand is something that I will invest in this business to create the export and I said you know when I'm when I'm selling that to them on a one-time cost right because my Hardware cost that I'm deploying is one time because all the research and everything I understand Hardware is one time my original question to you is what will you charge customers and your response was 80 to 90 000 so just to be clear what you're saying is no that's what you're gonna invest as a company to build the system and then you're gonna charge customers 50K 50k yeah nothing more than that um got it okay interesting and tell me more put this all in a timeline for me when did you write the first sign of code for experiential uh well uh I think about a couple of years back is when we started reporting towards digital campaigns so that's when we started going digital what year did you launch the company uh 2017 late 2017. and just your software do you have co-founders oh co-founder have a CTO as well okay so two co-founders were you guys nice to each other you split it 50 50 at the start now so uh my co-founder uh uh and me are co-founders and the CTO has joined us later on but all of us have equity in the system yeah but I want to know how you decided who has what do you have the most uh yeah I have the most and then why then your co-founder and then the CTO correct that's absolutely correct okay and have you bootstrapped so far raise capital we've just raised Capital Nathan about uh a year and a half back we were also the first contestant on the Indian version of shop tank very cool we didn't know how much did you raise no we didn't raise from there because we had already done a seed round just before that so how much did you raise in the seed round uh we raised about uh 150 000 in the seed round and what year was that and that was 2020. okay and after that we raised another 100 and no another 200 000 200 000 in what year uh this year in 2023 yeah that was that uh obviously at a raised valuation and now the third round that is the bridge around that we have already got our commitments for it's at a higher valuation and we're raising about uh a million dollars for that when you're raising your precede back in 2020 150k what valuation was that at that was at uh about uh two and a half million okay and evaluate and an arrays that you just closed the 200 000 that was at a higher valuation that was a high Evolution that was at about six million dollars interesting and the round you're raising right now what are you targeting uh right now we are looking at uh uh 80 million dollars and uh we are raising about a million how do you justify an 80 million evaluation with the company that just did a million dollars it's an adx multiple and a time when most people believe we're going into a recession okay so uh firstly it's the digital paper towards export because as a Founder as a business and the kind of clientele that we have most of the investors are interested in us but they've always come back to us and said that you don't have anything recurring and to be honest I took that as a feedback I don't want to stop my activation business but at the same time build the export now once the the belief that they have an export is once the export is created and I already have the clients it will be easy for me to start getting recurring Revenue secondly I have uh uh uh the forecasted revenue for the next year is about like I said about three million dollars so at a three million dollar a forecast raising 18 million at an 18 million valuation is about six times of sale uh Top Line oh yeah four words forward I mean there are two massive assumptions there you can actually launch a new product and pivot you can sell three million of it over the next 12 months and then oh by the way you want credit for that future you know success today in terms of an 80 million 60 million valuation um do you have someone that's already said yeah we'll put up 500k of the Million Dollar Round here's a term sheet a real term sheet yeah yeah yeah yeah so you have a word doc in your inbox from a real venture capitalist that says we will buy the business at 60 or 80 million and we will put up the first 500K okay so I'll tell you how that works as of now we have done uh with a few set of VCS who are already with us we've done a milestone based Arrangement every time I hit a certain milestone in terms of top line that is when I start getting the tranche and I have the contracts in place for that how do you measure Top Line now I mean if you do 20 000 one time this month does that count as ongoing top line or that's just one time how do you how do you know what Topline even is so uh it's a pivot like even they are interested in recording Revenue so every month or every time I hit a Top Line it could be probably in 60 days it could also be in 45 days they will do an analysis of how much has come through a recurring revenue and how much has come through a one-time activation and then calculate the top line on the basis of trailing 12 months so in the last 12 months and then so on and so forth so every time I hit a new top Milestone I will get a certain Branch I see and how many customers you have paying today the recurring fee the 8 000 a month about six six or so okay very cool well great story here uh Quran we're certainly rooting for you in the meantime though let's wrap up here with the famous five number one what's your favorite book what's my favorite book um I don't know which one I read last so I don't want to come into that number two is there a CEO you're following or studying of course I like Jack ma number three what's your favorite online tool for building experiential uh we've been working on many tools are you talking about marketing or just about anything any tour Microsoft team Zoho uh keka number four how many hours of sleep do you get every night good eight and a half hours that's good and situation married single kids I am married to how to get here very quick one how old are you I am 42 42 last question something you wish you knew when you were 20. um no I think I'm good I think I think it takes a certain process to evolve from a person I wouldn't want to know more than I knew in 20s guys experiential Etc was launched in 2017 they hit a million dollars of Revenue over the past 12 months after raising 150 000 pre-seed around in 2020 at a 2.5 post money valuation they just closed a couple months ago knew two hundred thousand dollars of funding at a six million dollar post money evaluations open a girl from a million bucks in Revenue to 3.5 million over the next 12 months historically as Revenue has been split 50 percent SAS fifty percent one-time activations launching a new product called Xbox which will help Brands like h m retailers understand heat maps in their store launch real-time promotions and generate Roi he's making a big bet that he can sell three million bucks worth of that over the next 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 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