How Exponea CEO Peter Irikovsky grew Exponea to $18.9M revenue and 190 customers in 2020.

the interview is live look at that hey guys quick reminder before you enjoy today's episode i do a lot of work in the descriptions below to timestamp when the founder gave me critical data points like revenue and they finally shared their customer count or their team size and valuation so you can use those time stamps to click around also i'm going on a walk here while i keep rocking my lock down beard and while we all wait for this nasty virus to go away but i will be hanging out in the comments on my phone i'll be looking for your comments and i'll be replying to all of you guys so if you have questions that you want to ask the founder or ask me you can put them below i'll see them all in the meantime enjoy today's episode hello everyone my guest today is peter arakovsky he is the ceo and founder of a company called exponia which is a combination of a cdp uh customer develop hold on what is cvp customer data platform yes got on the money baby uh he helps he helps folks with cd their cdp and omni channel campaigns all right peter you ready to take the top of course let's go so talk to us a little bit about this the idea of cdp there's a lot of people starting to use this term as taking off but it's still a pretty fragmented market where is exponentia playing are you serving a specific customer base or what's your what's your angle yeah so we're actually a customer data experience platform so we're combining the actionability of campaign tools with the smartness of a cdp and we're focusing primarily on online retail and e-commerce and so that's our niche where we are the strongest and you know the this kind of combination is really unique in one thing it enables us to have the fastest time to value on the market and with that we're also the best rated cdp on the market so define best rated like is that via g2 or what what survey okay g2 and if you look at it like we're by far the leader in there and who else is in the space uh you have quite a lot like you have blue shift latex optimal and few other customers like that companies like that okay and are you unique in that again there are other cdp platforms but you're hyper focused on online retail and e-commerce so i think the the combination of the having the focus on online retail and a lot of use cases specifically for this niche and having the campaign part uh directly in the tool and build ground up that's unique okay now when you last came on the show this was back in september of 2017. so almost what is that two and a half two and a half years ago or so you had shared that you launched the company in 2015 and then at that point you'd raised about i think three million dollars have you continued to just use a three million to drive growth or did you raise more capital we raised significantly more so we've raised over 35 million okay and where's most that capital gone what are you spending it on growth into new markets that's the that's the biggest part be specific though like is that what i mean building an office building in dublin or what does that mean yeah so like we now have uh quite a big team in the us in germany you know at that time when we were speaking we were only launching the uk and now uk is by far our biggest market and so like the the biggest expansion is is going into sales but we've also increased significantly the size of our product team and further increased the leadership in the product okay so how many folks are on the team now today today in terms of uh ftes we are around 220 230. 220 and how many are engineers uh around 60. 60. okay are they concentrated in a specific international office yes no so we most of the developers are in slovakia and then we also have some in czech republic but that's the we are keeping them focused because we believe that for engineering it's useful to be in one office whereas now it's it's not that useful but yeah in general we believe in this yeah obviously we're talking about the virus we'll talk more about how covet is potentially impacting you guys and how you're planning to play it but finish off the team here for me so 60 engineers any quota carrying reps of course uh less than 20 now so you say of course but like look sometimes if you have a price point an average acv of less than like five thousand dollars you can't afford to pay people quota so you don't use a quota carrying rep model what is the average customer paying you per year uh 100k just like 96.97 is currently the average oh wow okay so that's much higher than it was four years ago you told me four years ago it was about 30 30 40 000 so you've gone up market yes significantly yep and was that um was that from driving expansion revenue off that historical base or you just brought on bigger customers from the start over the past two years so both uh we've also you know off-boarded some of the smaller customers because at the beginning we were not that focused on online retail and so we've had some other customers and so we actually awarded some of them and you know focused on bigger customers but also driven significant expansion so our net retention has been along over 130 now it's like 121 and like we have a few contracts expansion contracts that can get drive it to 140 percent again and break that down for me what's the gross revenue churn under that uh 12 percent is the annual gross revenue return and so you know 121 is the the net revenue churn got it so you've got 12 gross revenue churn then you've got call it like 32-ish percent of expansion to get up to 120 net yeah that's up sell cross sell and expansion in total yeah yeah okay that's great and how many customers are you now serving today so i so we're at 19 million in crr so that gives you something like 195 customers something like that got it you said you had about 190 million sorry 19 million dollar run rate yeah yeah and word has it you're talking to some growth equity funds right now are you trying to find more capital or and if so what would you use the capital on yeah so like we we've got to an impulse with our current investor and so we're looking at the different options and growth equity seems best and so we're already in the process with some of the top growth equity funds who actually share the vision that we have we want to make this into a you know multi-billion company we believe we can drive the company to over 200 million in revenue in like five to seven years because also the crisis is structurally playing strongly in our favor uh because digitization is is like the topic everywhere in retail so we see that there's a there's a big opportunity especially in the us and we want to have an investor who would be enable us to reach the full potential so because of the virus and obviously we're recording this on on friday april 3rd and we'll release it pretty quick soon after but there's two kinds like i've talked to a lot of vc's a lot of growth investors there's kind of two very different uh playbooks people are going one is they're just not doing any more deals right or maybe they're only putting some extra capital into portfolio companies to help support the portfolio companies and then others are saying you know what this is an opportunistic time i'm gonna go find companies they're gonna thrive during the crisis and put money behind them um it sounds like you found some that are taking the the latter the last approach right what are what are the conversations sound like are you seeing any any kind of you know small you know smaller valuations in the crisis than you would have seen four months ago yeah so like definitely the valuations would be would be lower but uh i i was worried that they would be significantly lower it doesn't seem to be the case when you look at the stock market you know the sas companies are down 17 to compare to where they were uh before this started happening so so it's not that massive uh drop in in terms of elevation and there are quite a few funds who were really like fortunate enough to raise significant significant new funds uh you know in the during 2019 and many of them are looking at this and thinking about who will actually win and who will benefit from what is happening and from the changing behavior and those are the funds that i believe are the best because they are having you know the right mindset they are skating where the puck is going to be not where the puck was and you know they see that we are actually the company that will benefit from this how much would you like like what are you targeting to raise so all options are on the table so yeah you know we're we're so we're we're talking about majority deal because uh we believe that through this we will off-board our um original investor uh and the question is you know where would we agree with the rest okay uh sorry you would so let me just repeat this back to you you would sell more than 50 to the company because a large chunk of that would be buying out your early investors yes okay and strategically why would you do that so uh we see that the our existing investor has different views uh than than we have and we don't believe having two investors beneficial for us so we believe that the easiest way is to do a large secondary to uh you know getting off the cap table and really continue with the expansion one example of like where we have really big differences in opinions is you...