How Flexee CEO Andrzej Nowak grew Flexee to $1.2M revenue and 3K customers in 2024.

hey folks my guest today is andre nowaki is building a tool called flexi.edu if you want to follow along it's salary on demand he's got a lot of experience in the in finance and banking including a master's degree before he jumped into and now founded uh flexi so we're jumping to it today you're ready to take the top hello thanks thanks nice to meet you hi guys you bet so what does what does salary on demand mean sorry on demand mean it's a service provided by the third party which is a flexi to enter prices to employer together with flexi we provide a service to his employees and by by our app employees can pay out their salaries when they want when they need it yes uh so are you a fintech platform are you lending money to employees so they get their money earlier yeah correct so it's a connection of fintech with a lending platform because flex is providing financing to employees and at the end of the month in easy way uh we deduct whole payouts from the salaries of their employees this makes sense very popular space how many employers are on your platform today how many use it uh you know we are quite young we just closed the seed round today we have more than 20 employer uh who and to to those employers we provide an up to about more than 10 000 employees today yes but the pipeline is very very growing right now we have discussions with bigger employers and in the end of this year probably will provide up to more than 100 000 of users okay so 20 employers today and those employers employ over 10 000 employees yeah okay and you closed the seed today or recently how much was the seed for we close it around in an amount of 2.8 million euro yeah so it's more or less three million dollars now you come from this world so you understand you know equity and a cap table and managing dilution why do you need money to launch a business like this uh you know uh we need money because we provide uh those salaries so we provide the liquidity so we are searching all the time money to provide the location employees so oh you're lending you're lending out your equity yeah by our equity but more more or less we are using the debt yeah so normally we finance our business by debt and the equity yeah equity we are using to finance our scaling yeah sales and so on and that we are using as our liquidity to provide the salaries to our employees so how much debt how much debt did you raise uh in this sit round that was in the amount of 2 million euro okay and equity was 800 000 euro okay okay got it so 2.5 of that okay got it that makes more sense so let's call it 2.2 million u.s is debt and then 800k is is the actual equity going on your balance sheet um so i guess of that because uh before sid round we had a precedent round and it was only equity and it was another 1 million dollar then when was that uh it was one and a half year ago when we start to build a whole business so that was in 2021 uh at the end of 2020. 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 it 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 valuation 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 valuations inside of your frowner 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 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 raised they sold 22 to 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 valuations 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 okay five one twenty twenty interesting so and then what money were you lending back then did it was it with your personal money or where'd you get the debt from the uh the money came from two business angels local private investors who believed in my in my idea yeah they invest their money of course i also invest my money uh and on and based on this money we built whole technology team uh andre i'm talking about that i'm talking about the debt so before the current debt you just raised what debt were you lending out to create liquidity in your marketplace uh on our market it was uh you know on before we we get the seed round we provide that in an amount of half million dollar then yeah uh and we found a problem one problem is that we speed up very fast and then we need to close silent in fast way do you know to provide an debt liquidity to our clients yes because we showed uh this product we are the first one who are providing in our country we are based in poland and you know we are right now investing lots of marketing salary on demand to infor employer that there is a flexi who can help their employees yes and right now they are knowing about the service and you know there is a huge demand so that's why we need to close and fast in no way my audience i think totally understands this right an employee doesn't have to wait on their paycheck in poland anymore they can get it ahead of time my question to you is though you can't do this unless you raise a lot of debt yourself so you can front that money so the of the 2.5 million debt you just raised what's your cost of capital on that usually it's around 10 to 12 percent and says it's the same it's the same okay and did you have to give up warrants sorry did you have to give warrants to the debt provider oh no no okay i'm so happy that i found the debt without any warrants uh but normally markets they are you know they want to have a warrant but uh i have a i i knew the investors i found the investor who was uh able to provide it without a warrant yeah so let's use a case study here just so everyone can understand let's say i am working for a company in poland i'm based in warsaw my salary is let's make the map easy it's ten thousand dollars oh let's do a thousand dollars a month so i don't want to wait for that a thousand dollars to the end of the month so you're at the beginning of the month i can take that a thousand dollars from you no normally if your employer decides in such a way you can but normally the procedure is different uh on the first day you will see you will see the amount that you earned for the first day yeah so it will be if you earn in a month one thousand dollars one after one day you will be able to pay down i don't know fifty dollar fifty dollars yes uh so every day your limit increase uh by an amount and you will see one thousand your one thousand dollar uh in the end of the month so andre how much does the employee pay uh so employee then we start from the provision 2.9 percent for it payout if the employee payer pays the fee there is also a subscription-based model where employer can pay a monthly subscription for each employee and the subscription fee is more or less eight dollar per month and based on the subscription employee do not pay anything okay so if the if the employer has a thousand employees that employer could pay you eight thousand dollars per month so that the employees don't have to pay a 2.9 fee yeah correct if the employer says you know what we don't want to front that expense they can use your tool but then the employee pays you know if i get a...