How Famoco CEO Lionel Baraban grew Famoco to $7.4M revenue and 250K customers in 2024.

hello everyone my guest today is Lionel Barban he is a serial entrepreneur and started the adventure and France where he launched several successful startups he didn't went on a managed technology incubator in Israel from 95 to 98 in 1998 he founded intopia a company specialized in semantic analysis and raised 40 million dollars he added the company from the silicum so from Silicon Valley until 2006 after France and Israel in the USA he moved to China where he develops Xanadu a key player of online travel services with Nicholas his founder in 2010 they co-founded simogo of which he is now the CEO Lionel are you ready to take it to the top thank you alright you have to close up the story first so you mentioned the company intopia you raised 40 million bucks for that in 1998 what the hell happened we sold the technology okay that's that's not a full answer 90 it was obviously a rough time and 99 was even a rougher did you guys lose all the investors money no we don't know no we did not know no we saw the technology we didn't close all the invested money okay did you worry was it a did you end up going public in 99 or did you stay private no no we stayed probably all the time okay you stayed private and and why'd you decide to sell vs. keep building it uh-oh it's a long story it's because at that time we had a lot of competition and at that time we had an offer and I was not in a position to refuse the offer we got mmm-hmm was that pre the crash or post the crash holes the Grouch post the crash okay very good all right and then you jump into your current company walk us through what for moco does and how you make money what's your revenue model okay family Co is what we do basically we validate digital transactions so when I say we validated you that transaction what we all have in mind when I talk about transaction or financial transaction payments now in reality a transaction is not only about payments but transportation is a transaction crossing a border is a transaction with two government one letting you out one letting you in access control is a transaction so the world transaction is much broader that only payment we validate all those transaction and we do that by providing to that world Android devices so we are doing hardware and software so we provide Android sort of POS if you will point of cells on which you can do the transaction you can validate your transaction we accept the transaction through a QR code NFC card contactless card or biometric so we create those smart POS smart touch point a smart touch point and on the top of that there is a mobile device management platform enabling you to put a business app in order to transact to do your transaction so let's give you a few example of that for example we work with a united nation and we digitalize humanitarian voters for the united nations so it's like we have invented for the UN money a digital money we use it restriction so we provide a god an ID count to all the refugees in the world this is a biometric card and when the refugee approached the card on one of our POS he will receive the voucher that he's entitled to so we're giving money but with that money he can buy only food no guns no munition know how cold no tobacco and he can buy him his IDs have you shipped we have today around 15 million users you know how many of the physical IDs have you shipped the hardware 250 thousand devices ok I want to I want to split the company and understand hardware and then we can talk about software so I want to make sure I understand the hardware side you've shipped 250,000 devices are these actual and they look like Android phones or it's more like a chip no no it's it's uh let me show you one okay no this is one of this one has that just happened to have this one in my table this one is one with uh a like a credit card built in so yeah so it's like a it's like a phone that we would not phone yeah okay so you've shipped hundred fifty thousand of those yeah do you subsidize those have you raised a ton of capital or gee pass it on the United Nations paying for them no it's two thousand two hundred and fifty thousand in total not two hundred and fifty thousand for the unity sorry I know I know I'm using it as an example I mean your business model do you subsidize these to your customers or do you make them pay for it depends some we subsidize and some we make them pay for it okay I see let me ask a different question I'm trying to understand if you're more Hardware or more software business over the past twelve months if you look at your total revenue what percent was hardware versus software no sixty forty sixty Hardware for the UH yeah sixty it's it that the the hardware in the Trojan horse on which you put your OS your secure the mobile device per oh the hardware has no value in it it just has the value because that it did not exist at the time we created a company yeah I totally get where we take another hardware so the howler has no real value beside the fact that when we build it we control it we know what's running on it we know exactly what is inside and when you are in the security business and you know there's it's more and more important yeah so just to be clear over the past twelve months 60 percent of your revenue has come from basically people paying for these hardware the phones forty percent has come from the software people by to go on top of the phones yes I imagine margins though it's very different your margins on the software are way way higher than this the the way you're making on the hardware yeah our what's over the next twelve months I've interviewed probably I want to say maybe 20 or 30 CEOs that are doing anywhere between caught a million and seventy million per year with some kind of hardware subsidized hardware plus software business and many of them their goal is to continue zhing the software to drive down the cost of hardware to increase basically penetration over your next 12 months are you following that same pattern and if so what's gonna enable you to drive the cost of the hardware down quantities of course but also the economy what we do basically we when we started the company it was only our hardware so today we have developed the technology in in a way that I can't I can take another hardware rather than all Hardware flash iOS on that hardware and put our mobile device management and and send the keys directly to our secure network so today more and more we will just send the OS and the mobile device management sometime on our hardware and sometime on other people's hard work when you say other people's harder you mean an iPhone and Android phone not necessarily a phone but a hardware that you can find in China you have thousands millions of a hardware manufacturer they have good hardware but the software running on them is our crappy so we're just going to do a better ok let's let's switch now and talk about software for the next seven minutes so the software business when an organization signs up to use you and it sounds like you're on the enterprise space if you're citing the United Nations is a customer example how do you price them what what do you price against so we we we provide our job is when you're in an android business and when you look at mobile device management platform they all come from the BYOD concept so bring your own device concept we don't do that what we do is you take a piece of hardware and you dedicate that piece of hardware to a very specific use case so it can be a kyc can be payment can be access control can be transportation whatever so our business model is very simple I sell you the piece of hardware that can run the business I'm selling you to and and I will take $1 or $2 per month per device for the mobile device management platform on the top of that you will have a business app sometimes we do that business app and some although people do that business app give you another example we are a POS for WeChat pay and Alipay so we equip thousands of shop with our devices enabling Chinese tourists to pay whether we chat pay or a leap a wallet and so when I provide that or I run the device with all the applications inside or I sell the device and those people will pay me couple dollars per month you know though to be able to use the service okay so either it's an it's an integer consumer paying you couple dollars per month you service or it's a United Nations buying a bulk package of ten thousand or something exactly I see like and what's the hot if I just buy one of the hot pieces of hardware for me what's that cost me ah depends on which one but it goes from $100 to $300 $400 depends wouldn't go okay and put this on a timeline for me when you launch the company what year so we we launched the company I have a co-founder called Nicholas and we together created the company in 2010 we had really three years of rnd so from 2010 until 2013 it was more four five people in a garage trying to do some R&D stuff and then we raised the first million in 2013 and we started really to sell January 2014 okay how capitalizes the business today how much capital raise total 21 million ok 21 mostly from investors in in Europe or the u.s. or mostly from investment in Europe yeah and you're up very good and then if it's a 2010 you are Indy you start selling just a couple years ago how...