Freshdeal Team Size (2022)

hello everyone my guest today is Jose Bautista is the co-founder and CEO of a company called fresh deal and previously at fruit spot leading AG tech startups focused on the produce industry he's building LED digital businesses worth over 2 billion for leading brands like PNG Google Nike Coke and Diego I hope I said that right Jose are you ready to take us to the top yep thank you that last brand right yeah Diageo Diageo very good all right so tell us about the company what's fresh deal do and what's your business model how do you make money yeah 40% of everything planted especially fruit and vegetable is wasted never may get stuck consumer so first heal is basically a platform to enable or to make trade possible one of the major reasons why things are wasted is basically trade is not efficient it's hard to connect it's very volatile so fresh steal is basically a platform to connect and trade and what's robbing model yeah we actually have a diversified ready revenue model so we have a SAS model obviously we have a membership and then on top of that we have a percentage of sales especially for our secure payments we have an ecosystem of partners that actually pay us affiliate fees and the last one is actually we have high-touch services that our users pay us basically back office yep does SAS make up call it more than 70% of the revenue well right now we actually will start monetizing after the summer okay actually having started god it's a pre revenue at this plane yep on all channels are just on the SAS Channel all of them we've made a little bit of revenue on high touch services got it look this is how most companies start it's like an agency model first right so walk me through scheme or the backstory here when did you launch company we've been working on this book for about three years three okay not a plastic what you mean you must have raised Kapil or something how he paid yourself over three years with no revenue yeah I mean we bootstrap for about a year and a half and then we raised a quarter of a million last year okay and and what were you able to show that enabled people get confident to put in that money pre-revenue well like what did you spend that first year in a half building it was very interesting growth basically we growth every we grew every six months we doubled our user base we currently have about 6,000 companies on the platform battery currently all three yeah and we've enabled about a hundred million dollars in trade over new business for them okay and you haven't so those revenue ships you just gave me like 100 million in trade if you took two percent of that it's 2 million you haven't you haven't taken any of that why not we actually learned the first year that's part of what we did before monetizing we learned that users are very adverse they're actually taking a fee so we actually added a little bit of value with safe payments etc to actually be able to take that fee God and what fee do you think able to take now moving forward the fee will probably be somewhere around 5% 5% ok got it and that's just a function of again that this the value-added services you've you've coded into the platform exactly ok good what's the team size today we actually have downsized we had 10 people most of them actually based in melenz here we have two offices in New York in Valencia in Spain now we are currently five five people guys what to say sure of the grand raise pre-revenue if you want to stay afloat you got to make some serious changes here that must have been tough why a lot of people make this mistake by the way they raise some capital and they over hire then they have to let go back down which is painful walk me through some of those pain points well you know what would you've changed about your hiring in the first place yeah well the first part very interesting is actually I merged with a competitor so fruit spot was my original platform it actually merged with fresh deals so that way we code Europe in North America I was North America out of that some of the town was already ins and so we just kept going with that uh if I actually could change some things I would actually I would have raised capital a little earlier to build a lot of team in North America which is what we're doing right now well if you don't me I mean like what the hell was merging or were they both pre-revenue collide what was actually coming together yeah basically I had the design and a very unique platform in terms of the user experience and they had they were actually about to close the round of funding so it was a good at the 200 250 yeah where are they today are they still active or no you yeah yeah we're still a team actually you know marriage pretty well how do you have the equity conversation this is kind of a unique situation yeah it has been tough we actually had to have some tough conversations but basically we split it 50/50 in a way okay so kind of their group whether it was one found or two or five got 50 percent your group kind of got 50 percent and then each side decided kind of who they would split that 50 percent amongst exactly I see I see no you are so founder on your side right I mean you have 50 percent today of the bigger company no I have a little less because it was 50 percent of North American business so it's about 25 percent I see I see okay interesting and why go I mean why go through all this versus just launching your just start your own company start over start a new idea you mean fresh feeling yeah well yeah you built all this thing up yourself and then you're saying hey let's merge they're about to close around the capital so you're gonna have other investors in the cap table I mean why not just keep doing your own thing why did you need to merge it to me one of the things that have this is my first intrapreneurial project it's lonely I needed a team I actually worked with him for a few months before emerging and I was really convinced about how they thought so I needed a team I needed partners you're actually asking cuz I'm a until deeper on this you're in a such a unique spot your ex corporate I mean you had some big logos in your bio right so I mean is it true for me to say you're coming from a very safe six-figure kind of salary and corporate and this whole thing is like where you're like a fish out of water a little bit I don't feel like a fish out of water because but but I was maybe at the beginning yeah and then yes you're right I was yeah it's always interesting I I have found most the people that are ex corporate tend to do things like what you did to minimize risk like oh they're closing they know the market it's another international space and they do these kinds of things versus people that like don't know any better they just be honest is they do crazy and the thing is most times the crazy like either that stuff crashes and burns quickly or that's the actual the next unicorn versus the ex corporate person guy or gal builds you know call it a tent when in our company but it's kind of that's kind of work it's like stuck out do you feel that you were your experience in corporate and made you less or you know likely to take risk um wouldn't necessarily put it that way but definitely maybe a little bit more stubborn at the beginning I did not want to raise capital I wanted to bootstrap it all the way mm-hmm yeah my thinking was if people in the 50s could just start a business without VCS why couldn't I yeah and how would you I'm asking old you are 36 so how many how many years did you spend in corporate okay yes that's a long time right out of college yeah yeah and are you married no I'm single okay I was gonna say was there I was there a significant other that had any kind of influence on hey baby keep your job that pays the bills no I actually have a significant other that's fantastic she also has her own startup oh that's interesting good so so when you met was she startup and you or corporate no she was actually she's a performer she's a dancer uh-huh and then she's actually extended her business here in New York to get beyond perfectly well you with her though when you went to the transition from corporate to startup yeah she was very patient conversations sound like what was her biggest fear for you even if it wasn't your biggest fear actually she was very happy because you know the last few months and my last job were a little crazy mm-hmm so she was happy to see that change how would you mean by crazy well basically the company I used to work at grew very rapidly so it became a little tough to actually manage projects and market cetera yeah interesting okay what our next steps I mean how do you go from no revenue to your first million in air our yeah so basically right now we're raising about a million and a half okay in a regulation we already have 20% closed I have a ten million valuation so great the 250 was raised that three million so we've actually grown significantly in terms of valuations yeah and that's 10 million pre right yeah yeah yeah and we're doing it as a convertible note and we've it's interesting the whole monetization conversation has kept us a little bit from actually closing VC's so what we're gonna do with that first investment is actually dedicated to monetize so just be clear you've established a convertible note that says let it we'll be able to raise up to 1.5 at a 10 cap these are the terms we're gonna go ahead and close on the 20% right now which was it will be about three hundred four hundred grand you're using that money a star monetization and then you will let additional investors roll in two three five six months down the line to fill out the one five yeah the 20% is of the total rate yes only 20% of one five is out three hundred yeah sorry we're raising a range so it's about a million to one oh I see I see I see okay so you right now you have to call it to between 200 and 400 cash already committed you're using that we don't have it in cash yet got it we should be getting a st. we are working on the term sheet this week money is in the bank we've actually had a pretty good relationship for the last few months and it's actually a strategic partner that's good that's good all right and like where will you spend that money is it on inside sales people it's something about onboarding and direct conversions up how will that help with monetization directly so one of the things that we've adjusted in your strategy is that we want to be an intern platform we don't want to be just a marketplace so we're gonna use that money to actually our strategy will be speed so we need tech resources to actually be able to spit out features and put it in front of users very quickly in a matter of weeks at a time are you nervous raising at a 10 million dollar valuation with with with no rabbit in other words there's a real risk you have to go to grow another value a ssin to raise additional capital to be quite honest I don't know any better it makes it sounds like your other folks maybe are leading their raise because they did the first two fifty-two so maybe it's under gear more of that kind of the vision the strategy guy actually I'm the one leading doing the raise this time why is that location most of my partners are based in Spain and even though we have some interest from Germany and from Spain itself most of it is in New York right now yep yeah interesting that's where you live right yeah yeah okay very good let's wrap up here Jose with the famous five number one what's your favorite business book the art of war number two is there a CEO you're following or studying right now Jeff Bezos always attracts me number three how many sorry what's your favorite online tool for building the business oh I don't have one up okay and number four how many hours of sleep to get every night I have to get my eight hours eight all right and what's a situation married single kiddos no I don't have any kids I have a significant other yeah it's still good one does she stuck with you or through through thick and thin that's good she definitely been 31 he said about 36 36 last question why do you wish your 20 year old self knew you don't have to plan everything ahead guys you can do things incrementally remember that claim Jose again 15 years in corporate and said he know what I'm gonna do my own thing sir his own company and merged it into fresh deal which he owns now a little bit a little bit less than 50% of again they're a growing a company up in New York I also have team insane launched in 2015 team of five right now they raise about 250 grand so far currently doing another around raising about 1.5 helping 6,000 companies right now using the platform for free they put about a hundred million bucks in trade to the platform the goal basically decrease waste in this produce space forty percent goes totally the waste right now and he thinks by building a end-to-end trading platform for this kind of things we can get significantly more efficient especially this part of the supply chain so Jose thank you so much for taking us to the top thank you David