How FreeD Group CEO Kenneth Lee grew FreeD Group to $100M revenue and 70 customers in 2023.

guys join harmonycvm.com they help smart cities connect with local farmers to fill grocery stores with produce for example they make money on both sides of the equation last year they did 35 million dollars in revenue of which 15 million was recurring and 20 million was their take rate off their gmv which they did 20 million in gme in the last quarter they hope to break 100 million bucks in Revenue this year on the back of a major acquisition they just completed that 100 million will be split 50 50 between true recurring ARR and then sort of recurring gmv take rate on top of the business open to IPO in 2024 we'll see what happens totally bootstrapped which we love hey folks my guest today is Abel he's a dynamic and driven business leader with over years and years of experience in the technology travel and hospitality industry today he's the CEO and co-founder of free d group a Cutting Edge travel and lifestyle SAS company he's played a pivotal role in empowering Global Enterprises and government units to drive incremental revenue and Achieve success for customer experience able you ready to take us to the top yes so go ahead thanks Nick all right so the company website is freedgrouptech.com but the actual product is joinharmonycvm.com that's the product tell us what you're selling and who's buying it sure so basically we are a typical SAS company and but actually we're using a little bit different approach uh in comparison to uh typical SAS company actually available on the market so first of all one thing we created is quite different from others is the multi uh uh a merchant multi uh channel uh multi-platform uh capability to help sellers to create this kind of uh uh uh um it's combining actually with the CRM with the uh Harmony at the um which sellers though my audience doesn't know what sellers you're talking about oh which is sellers you mean you just said to help Sellers and people we don't know what sellers you're talking about not too much oh that the sellers basically actually quite wide range can be actually from uh product owners Distributors uh content owners then actually those actually the one that providing the uh the the actual uh uh um product covers from travel to Lifestyle to a consumer goods so basically anything that customers can purchase those are basically uh the uh those related Sellers and then on the other hand we also work with large corporations like telcos or governments and uh uh Airlines and airports anything that actually the concert they can actually reach to their uh large uh customer base uh customer base so you're a marketplace with sellers who are the product owners Distributors you know and travel lifecycle and customer Goods consumer goods and then you have the buyers like telcos and governments that are buying things like travel or other things exactly exactly whether one actually in the middle providing the solutions providing the uh the AI Solutions and data capabilities and so on uh to to link to groups together and how do you make money or taking a cut of a gmv or is there a SAS fee on one of the sides oh I have both actually so from the uh those big player sides we basically charge the SAS fee and from the distributor side the product owner side basically uh we earned a commission okay what's the commission typically like one percent five percent ten percent well that actually really depends on the market and also depends on the products I mean uh typically for example if we because actually we work with wide range of uh suppliers for all the merchants from different markets for example if it's in China uh the other takeaway is actually quite uh quite quite sad we're talking about below two percent but if you're going somewhere like Middle East or Europe then actually can range from uh between 10 to 15 10 to 20 percent interesting but when you look at total GMB for your platform over the past 30 days then you look at the total revenue you got to keep what is the effective weighted average rate you're keeping the take rate I always say around 10 10 okay around ten percent got it very cool and then going back real quick to the to the SAS fee which these buyers pay you the telcos the governments help me understand how do you charge them um so first of all we uh you just got a situation so we uh again we separate those into two groups they made the smaller Merchants the people who actually try to reach uh to uh to uh to to sell their product to different channels normally we charge them actually a very very small fee so to help them to grow to help them to actually reach out to a more audience and more customers it's small though 10 bucks a month 100 bucks a month uh we're talking about uh it could be like between uh between hundred dollars to uh to a thousand dollars at that kind of range and then there's a big guys out there so the governments or telcos or airports and stuff like that that could actually go from a hundred thousand dollars to all the way to seven million uh dollars per project that's basically the largest one we have which is a smart city project in Korea 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 valuation 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 okay so the the biggest customer you have today is paying you seven million dollars per year that's correct that's correct okay and it's a smart city project so what kinds of things are they using your Marketplace to access for the Smart City from the Distributors and Merchants sure so I'll give you an example um so before covet uh um so let's say uh it's a small uh a farmer outside so they can actually just drive their fried vegetables and drive their products to the city and sell it to different uh uh supermarkets or restaurants and because of coverage so that's actually being restricted so the government actually tried to do all kinds of things to help the small uh margins asset needs to actually to survive to create more different distribution channels for them to reach out to their clients directly so therefore we are the one actually building the entire system from end to end to help those as anes to distribute their products to different channels and help them to manage those as well and so on this ask me I heard you say that Merchants the farmer might pay a hundred to a thousand bucks a month but then the big guys the airports or the people doing the Smart City could pay up to seven million is there is it very obvious the majority of your revenue is coming from the smart cities versus the small farmers or what's the revenue split on the SAS fee side uh from the tax fee side one-time solution to you right now if you look at 2022 number uh those actually that so large corporations that takes about 60 65 percent and then the the smaller Merchants takes about 30 percent okay got it so if you're 2022 total SAS revenues 65 were the big guys and 35 were the small guys that is correct okay interesting and you mentioned one time fee obviously a one-time fee is not a SAS fee so are these people paying recurring monthly revenues uh they do Yes actually because actually the the guys who are paying the one-time fee normally uh so for...