FixNix Revenue, Valuation & Funding (2024)

hello everyone my guest today is sean sancharon he is building a tool called fix our fixnicks.co he's the entrepreneur who sold his house he's bootstrapped the company for eight years and has been mentioned by gartner got rewarded as a top reg tech and grc company by medici and 30 other international entities he pivoted to cyber security officer platform during kobit to offer people plus businesses plus leadership in cyber security rather than a process system sean you're ready to take to the top yes i'm good nathan all right so just to be clear it's fixnicks.com is this a sas company or is it a consulting firm uh no we are a sales company okay and so what are com what are tell me what customers are paying you for uh people pay for the security services uh they want us to automate their cyber security processes and what how much are they paying you to do that on average per month uh 500 to 6000 you said 400 500 500 okay 500 a month and that's an average or is that the lowest oh that's the lowest even uh they pay 6 000 per month so what do you what would you say in averages i would maybe uh 2500 okay so 2500 per month and why would someone pay you 500 bucks a month versus 6 000 per month what are they paying more for um they pay for automating their cyber security processes like nist stock2 so in case if they have a very minimal need to set up few processes so they pay less they start small or they are a startup they just want to get on to cyber security they are just on the initial level of cyber security maturity they pay less but when they kind of upgrade themselves they try to upscale themselves on maturity of cyber security they adopt more processes they automate more workflows that's when they pay more got it and when did you launch the business it's uh eight years before okay so call it 2012. yep and have you uh it sounds like you've bootstrapped how did you get your first 10 customers um uh i used to be a chief information security officer i spent 10 years in cyber security industry with microsoft and ibm and um i had a huge network of people my ciso community so i kind of used that to get the first customers that's that's right and how many customers today today we have 230 customers put together 230 yeah and can i take 230 times 2 500 a month on average you're doing 600 000 a month in revenue uh not necessarily so actually interestingly we were the first ones to discover this whole software service business model in this uh space so governance system complaints used to be a on premises uh fortune hundred fourteen thousand eight years before we were the first one to discover this even the sas momentum i think we said we made a statement we want to be the sales force of grc so interestingly uh it's kind of for 230 customers cumulatively through our journey are not necessarily on a mrra or anything how many are active today i think we have uh maybe 30 plus three zero yeah two zero why have 200 i mean it's been over eight years so it makes sense but why do they churn why don't they they stick no actually we we kind of used to do a lot of this small deals uh like uh uh 250 dollar type clients in the past we kind of used to help pharmaceutical compliance we had volume licensing deals with partners where they provide services as part of that they use our product to automate the process systems for their compliance certifications but i think we thought it's not uh adding a lot of value so we moved away and we are now focusing more on two thousand five dollar or six thousand dollar kind of a per month clients so can i take 30 active customers times 2500 a month you're doing about 80 000 a month in revenue enough yes do you think you'll break hopefully you'll break a million dollar run rate this year uh yes uh we are seeing a huge traction post of kobe 19. why is that because i think everybody have mood remote previously everybody when you go ask them try cyber security they used to say that they don't need it actually at that point of time but now everybody working from remote everybody is able to realize the importance of cyber security data loss prevention etc there may be a 10 people start up uh maybe just rise the seed round but they are able to see the importance of cyber security now and and help me understand your growth if you're doing 80 000 a month today in revenue what were you doing a year ago um a year ago actually uh last year uh certainly kobe 19 has put some of our plans aside we kind of had some hate on our clientele partners etc so this has been a still uh kind of on premises of the rest of the industry sound promises maybe the even the leaders are trying to adopt the sauce model now so i think now uh last year i think it was really pathetic 2020 we do not want to even talk about well but i want to understand that story right so in april of 2020 how much revenue did you do oh maybe uh 20 000 per month okay so you you've grown by more than 4x then over the past 12 months yeah the last actually uh initially during kobe 19 initially there was a hit uh we kind of uh some of our existing customers our partners even tried toning down their subscriptions but subsequently we stayed put we pivoted us slightly we added a small services component to our product now we brought up maybe 40 top thought leaders of cyber security industry chief information security officers they we have formed a marketplace so people can take now not only product product plus services so that they can automate their systems implement the processes etc so there's a solutions angle now we are pushing to kind of uh hang in and things are happening now and and have you raised are you bootstrapped uh we raised the less than a million dollar i actually interestingly i sold my house uh became the anthropo who sold his house to bootstrap how much did you sell your house for in what year um about two hundred thousand dollar and uh i choose to close to fifty thousand dollars in the company throughout this uh eight years what year was that was 2012 uh 2016 actually we did a kind of a rice semi rice from our friends family and extended industry members from silicon valley and the us so we raised close to uh some hundred thousand dollars from the industry and uh maybe a couple of hundred thousand dollars from family we raised almost less than a million dollar it was not a real uh crowdfunding per se but uh it was kind of a extended one based off our research it looks like you raised about 150 000 in 2014 500 000 in 2016 another 500 000 in 2018 and then another 250 000 last year in 2020 are those right fives okay so you raised about exactly a sort of a million dollars but no traditional vcs more like angels i see and why did you choose to go that path uh because i think we started the business out of india yeah the engineering was always out of india so and in india the venture capitals appetite to understand this of this kind of enterprise proposition uh your new sas enterprise proposition for a new industry i think was very less i think people didn't get enterprise at all in the indian venture capital community so uh particularly at least for a new new uh blue ocean uh so i think that may be the reason i thought okay let's bootstrap i in fact i raised a debt from government of india which is a very unusual source i raised a 150 000 debt i motivated my house to get it and it was a very interesting journey that was the seat for the company actually interesting do you have any debt on the books today or have you paid it all back no we paid back yourself would you look at using debt again to keep growing uh yeah i think now i think there are a lot of interesting opportunities coming in particularly the u.s markets a lot of people are looking to provide based on attraction so we may be open to it maybe i think i'm considering um uh maybe even a crowdfunding through republic like platform snap and now so more than going to venture capital line and we are looking at putting a rise together uh hopefully in another another quarter of this quarter how much capital would you look to raise now we are looking at uh five to ten million maybe five through a crowd funding five maybe through uh uh other partners who may be interested in this space you want to raise five to ten million or that's the valuation you want to raise at uh no we want to raise 5 to 10 million so the valuation uh the last round the three series we raised it at around the 15 million valuation but i think one five or five zero one fight one five okay so the 250 000 you raised in last year 2020 you raised it a 15 million dollar valuation which is a 15x against your top line revenues not sure got it and so what valuation would you try and raise 5 to 10 million on um right now i think people are looking at 30 to 50 million valuation we had few even interesting private equity family office interests on us to acquire uh last year i think they were looking at us a 25 to 50 million valuation when they were doing the due diligence flesh out your team for me sean how many people are on their team so we have uh 10 people team in india mostly engineering everybody's engineering there's just one sales guy so we have partners in canada they are our sales face of the company how many full-time people that are on the team all together we have 12 12. okay and how are they how many are engineers come again how many of the 12 are engineers there are eight eight engineers eight engineers okay got it and do you have any quota carrying sales reps or you rely on your partners to sell the product uh we have mostly uh we have a referral partners they are the ones who help us continue to do the sales maybe post our rights we may try to uh kind of strengthen our sales under marketing teams you said you have affiliates uh yeah we'd be kind of uh not affiliate referral marketing maybe do you do you have people who you pay you know a commission when they bring you new leads and if so what commission do you pay them oh we paid 20 percent of the recurring revenue in fact if they bring up six thousand dollar deal they get a recurring uh 20 percent commission out of it recurring forever yeah wow so so no matter what your margins from the affiliate revenue is always going to be lower than 80 percent because you're paying 20 off the top to the affiliate that's right how many affiliates do you have driven at least one sale uh we have close to eight uh partners who are active from different markets like africa middle east and us very cool uh and do you think the affiliate model is how you'll scale from a million in revenue to 10 million in revenue um oh no certainly we need to uh certainly set up our own internal sales team uh see the existing market is uh the the large players this is usually traditionally called as governance risk and complaints platform it's only sold for enterprises they go sell for half a million dollar million dollar to an average client so uh i think this uh new business model of selling for 25 000 or even lesser than that to a average mom and pop or a small and media business is a new business model so still we need to do set up a strong insate sales to um get to a 10 million dollar in sales yep well look i mean what you're selling is difficult i mean i imagine the sales cycle is a little bit long right because basically governments will say that you have to have pci dss or gpd gdpr or you know pa dss and you're basically saying hey companies will help you comply with all these government regulations in a quick easy way using our sas tools so your best friend is the government's uh imposing new restrictions so that more people have to buy your software to keep up correct yeah there was a lot of learning working with government in fact we tried partnering with the regulator of india reserve bank of india we tried doing a public private partnership we tried form in their own cloud to focus on some markets like credit union community banks um but it was a big that i think focusing on indian markets alone was a big debt so i think we kind of did that for initial maybe three four years tried focusing on managing markets like india a lot i think that was a big learning curve yep yep that makes sense well again now you're in emerging markets you have partners in emerging markets we'll see what happens next but in the meantime let's wrap up here with the famous five number one we have a small observation actually there is this privacy regulations like gdpr california privacy act which is kind of impacting the whole industry it's not just a one-on-one company right large not large corporates although need to subscribe to these regulations so that is helping so we we kind of help automate the privacy regulations to not cyber security alone so that is helping us get a lot of foothold now great let's wrap up here sean with the famous five number one what's your favorite business book um uh okay that's the monk who's oldest ferrari you say that again marcus o'reilly the mark who sold his ferrari i want to write a book the andra who sold this book on the same the monk who sold us ferrari number two is there a ceo you're following or studying um i i follow mark binioff and elon musk number three what's your favorite online tool for building fixnecks i think um number four how many hours to sleep to eat every night six and what's your situation married single kids i have two daughters uh very nice daughters in india so they may be also looking to move to us at some point of time that's great so are you married yeah i'm married with two kids and how old are you oh i'm 40 40 last last question what's something you wishing you when you were 20. maybe if i have known that entrepreneurship has so much opportunities i wouldn't have even gone for masters and microsoft and ibms i i guys there you have it fixed dot co they're helping sas companies keep up with new government regulations like gdpr they did 240 000 last year in revenue in terms of run rate they're now up to a million dollar run rate growing 4x year over year they're serving 30 paying customers that pay on average 30 000 per year growing right now with an affiliate model but looking to expand currently team size of 12 with eight engineers sean thanks for taking us to the top thank you 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 nathan lacka dot 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 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