How Hi Platform Reached $13M ARR and 1,700 Customers with a $40M Valuation (Interview with CEO Marcelo Pugliesi)

Introduction and Company Overview

Nathan Latka

00:00Guys, hiplatform.com was launched in 2017. The four cofounders owned 20% together, and other investors from an earlier, you know, merger deal owned the other 80%. Today, the company is doing $13,000,000 in ARR, up from 11,000,000 about 11,500,000 about a year ago. They raised a $7,000,000 round of funding their first outside funding last year at a 40,000,000 valuation, which was about a three x valuation multiple. And the co founders have gotten smart. They bought back a bunch

00:26of equity over the years. They now own 40% together, which is great as Marcelo and team focus on growing hiplatform.com. Hey, folks. My guest today is Marcelo Pugliesi. He's been an entrepreneur since the early two thousands and participated in the launch of eight different startups. Since 2017, he's been the CEO of hiplatform, the largest customer experience SaaS platform in Brazil. He participated in fundraising operations, m and a, and mentoring processes processes, is a fan of conscious

00:52capitalism, behavioral economics, and corporate culture. And he's a married father of one kid named Benjamin, graduated in MBA with a specialization in management and sales innovation. Marcelo, you ready to take us to the top?

Marcelo Pugliesi

01:04>> Let's go and hit him.

Nathan Latka

01:05Alright. So just to be clear, put us on a timeline for us. What year did hiplatform launch and when did you join as CEO?

Hi Platform Launch and Marcelo's Background

Marcelo Pugliesi

01:13>> We've launched January 2017, me and three other cofounders. And since day one, I was the CEO of the company.

Nathan Latka

01:24Okay. And why why do I have your start date as 2000?

Marcelo Pugliesi

01:28>> Oh, I started other businesses in 2000 with other guys. So my journey started as an entrepreneur, started here in Brazil in June 2000 with a company called Direct Talk. And we've stayed for a while in the market. And they're actually a hiplatform direct talk originated hiplatform. We got some of the

Nathan Latka

01:57So it's the same it's the same cap table then. Right?

Marcelo Pugliesi

01:59>> It's a different cap table. But with

Nathan Latka

02:03Well, so when did when did you cut that then? When did direct platform stop and Hi start?

Marcelo Pugliesi

02:08>> January 2017.

Origins in Direct Talk and the Merger

Nathan Latka

02:09Okay. Got it.

Marcelo Pugliesi

02:11>> Yeah. But with if with a different cap table and a different different some different products, but me as as one of the founders.

Nathan Latka

02:21How did you do that? Right? So there's a lot of folks listening right now that might have raised a $203,105 $100,000 seed round two, three years ago. And they're going, man, I love my investors. I wanna make them whole, but this business is not working. I wanna shut it down and launch their own version of hiplatform. How do you shut down that thing without pissing off the old investors at Direct Talk?

Marcelo Pugliesi

02:38>> We actually didn't shut down. We merged with another startup. It was a Brazilian startup for

02:48>> social media customer care. And

02:53>> we started speaking, talking with their investors and they are they were very into

03:02>> they wanted to invest in some chatbot products here in Brazil and Direct Talk used to have this product. And these guys, they just asked me, could you speak with the other founders and see if you can work together? Can you imagine an angle where you put all these products together and conversations went went pretty well. The products were very

03:35>> complementary.

Nathan Latka

03:37So Okay. So I understood. You sold you merged that business, then you're done and you move into hiplatform 2017. Now you with your three other cofounders, did you guys play nice on day one? Did you just split equity evenly or was it sort of lopsided?

Marcelo Pugliesi

03:52>> We actually, we were we had very little of of of the shares. So we got together, the four of us with very close participations. But we've worked the past three years to have more shares and to even balance more our positions.

Nathan Latka

04:16Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:39your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:04get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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

05:26not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

05:51going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if

Founding Equity Split and Cap Table

Nathan Latka

06:13you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into the

06:40interview. So But when you started, Marcelo, like if somebody owned more, why did you guys read it? Whoever that was was going earn or have more at the beginning.

Marcelo Pugliesi

06:51>> Yeah. But that that was not that much different. The difference was not the gap was not that large and we we've we actually did get along pretty well and it was easy to choose our roles as executives despite of the shares we used to have.

Nathan Latka

07:15Okay. So you think you owned about 25% then at the start, somewhere right around there?

Marcelo Pugliesi

07:19>> No. Actually, had way little than that because the investors from both companies that merged, they came together. So we have a very, how can I say that in English? But we have a very

Nathan Latka

07:36Fragmented.

Marcelo Pugliesi

07:38>> Fragmented cap table.

Nathan Latka

07:41So so how much how much let me just ask you this way. How how much of the company did you guys, the four founders, not own?

Marcelo Pugliesi

07:48>> Oh, we actually had 20% of the company.

Nathan Latka

07:52Okay. So other people, investors from the merged company, they own the other 80% and you guys split the twenty percent four ways, 5% each.

Marcelo Pugliesi

08:00>> Yeah. Yeah. Yeah.

Nathan Latka

08:01I see. Marcelo, why do that? You're like a talented executive, you're well known in Brazil. Why get involved with something where you only own 5%? Why not go start your own thing and own a 100%?

Marcelo Pugliesi

08:11>> My wife asked me that.

Nathan Latka

08:16I'm not your wife, but I still think it's a good question.

Marcelo Pugliesi

08:18>> Yeah. That's a very good one.

Buying Back Equity Using Bonuses

Marcelo Pugliesi

08:22>> Nathan, to be really honest, I was so much into the business. I was so excited about the vision and the goal and of course, the challenge that really wasn't to me and I've chosen the path, difficult one because we've doubled our participation in the last two years. So we bought shares from other minorities.

Nathan Latka

08:52So the four of you guys are now up to like 40%.

Marcelo Pugliesi

08:56>> Yeah. That's it. That's it. But it was it was a tough challenge that was

Nathan Latka

09:04Where'd you get the money to buy out earlier investors?

Marcelo Pugliesi

09:08>> Bonuses.

Nathan Latka

09:10But where did you get the money from? Was it profits?

Marcelo Pugliesi

09:12>> What Yeah, bonuses from the company.

Nathan Latka

09:16So you you have earned bonuses from the company since 2017, and you used your personal money to buy out earlier investors based off your bonuses?

Marcelo Pugliesi

09:24>> Yeah. That's it.

Nathan Latka

09:25I see. If you're earning all those bonuses, though, how do you convince the early investors to sell at a price that you can actually purchase shares using your bonus dollars? Why would they

Marcelo Pugliesi

09:36>> We had some guys on the cap table that were on the company for a while. They were tired. They had a minority position so they didn't vote and they didn't participate on the company. So they were not happy with this position. And to them

09:58>> the even even though we bought a little more cheap, they had they had a good return. So it was a good deal to to everyone.

Nathan Latka

10:07Yeah. Because I'm asking these questions because Hi has significant revenues. You know, Marcelo, when we last spoke back in June, I think it was of 2018 or 2019, you said something like you had 1,100 customers paying on average a thousand dollars USD a month. So you guys were doing $700,000, $800,000 a month in revenue back then. Right?

Revenue History and Growth Rate

Marcelo Pugliesi

10:25>> Yes. Yes. We we are doing what we are doing. Now we had 1,700 different customers and we do have

10:40>> $1,100,000 in MRR.

Nathan Latka

10:44Yep. Yep. So 1,700 customers. You're doing 1,100,000 in MRR, which is equivalent to about $13,000,000 of ARR. Right?

Marcelo Pugliesi

10:54>> Yes. That's it. Correct.

Nathan Latka

10:55And so why I mean, look, that's good growth, but it's not fast growth. Right? If you went from 9,000,000 in 2018 to 13,000,000 today, you're only adding about a million net new ARR per per year. Why haven't you grown faster?

Marcelo Pugliesi

11:10>> Another good question, Nathan. We we we've chosen a path a path to the company to have different products. We didn't focus in one product. So we've built a whole platform that can help companies selling and help companies doing customer care. So there are 10 different kinds of features and we did some, we had the merger but we did some M and A during this, during this, the past three years. So we had to put this all

11:50>> together as one product and

11:55>> try to find the right sweet spot and the right market fit to all these features. So, and we've raised money very late. We actually raised money last August. We raised $7,000,000 That was our our first round. So we had very little money. We came all the all all the way with

First Funding Round and Bootstrapped Journey

Nathan Latka

12:25So you were Marcelo, just to be clear, between 2017 when you launched and the 7,000,000 round, you guys were bootstrapped?

Marcelo Pugliesi

12:31>> Yeah.

12:32>> That's it.

Nathan Latka

12:33Okay. And what did you the 7,000,000 round, I mean, most people are raising you know, they're selling 15% of the company. Did you sell around 15%?

Marcelo Pugliesi

12:40>> A little bit more.

Nathan Latka

12:42Got it. So we're talking like a like a $35,000,000 valuation, 40,000,000 valuation, something like that?

Marcelo Pugliesi

12:49>> Yeah. 40,000,000

Nathan Latka

12:51Looking back, does that feel fair? Was that the right move?

Marcelo Pugliesi

12:57>> I think it was a good move.

13:01>> We brought some, a good company, a good investor, so he's very much into the Brazilian tech market, very much into SaaS. It's an it's a new fund. We've actually the second company or the first company, but now they have three or four. So it was I think it was a good move. It was a very good move.

Growth Rate and 2022 Performance

Nathan Latka

13:29And help me understand growth. So if you're at 1,100,000 today in revenue, where were you exactly one year ago?

Marcelo Pugliesi

13:35>> We actually grew 28 the last year and we are probably 2022, sorry, 2022. We are growing 20%, 22%. So we are not growing really fast, but we are we keep we are keep keeping some pace. Probably '22 2024, we will have some very strong growth around

Nathan Latka

14:10Marcelo, what what do you guys think you will hit this year in revenue?

Marcelo Pugliesi

14:18>> 15, 15,000,000 dollars.

Nathan Latka

14:21How do you so you raised you're at 13,000,000 run rate last year when you raised the 7,000,000 seed. Right? Most VCs, when you raise that money, they're gonna want you growing fifty, sixty, a 100% year over year. The projection you just gave me is like 15%, one five year over year growth. How did you get your board comfortable? Your VCs with such a slow growth rate.

Five-Year Plan and Board Expectations

Marcelo Pugliesi

14:44>> Because the we are looking for a five year plan. So our first our first year that's going to be 2023, it's it's not gonna be that fast, but we will unlock

14:58>> our growth path and and revenue streams throughout the year. So probably the years to come will be really faster.

Team Size, Engineers, and Sales Reps

Nathan Latka

15:07Okay. That makes sense. What about team today? How many folks are full time?

Marcelo Pugliesi

15:12>> Oh, 100% full time. We have two two hundred and fifty people.

Nathan Latka

15:19How many of those two fifty are engineers?

Marcelo Pugliesi

15:23>> 65. 65.

Nathan Latka

15:26Okay. And how many sales reps carry a quota?

Marcelo Pugliesi

15:30>> How many sales reps carry their quota? 90%.

Nathan Latka

15:35Oh, no. No. How many? Like, what's the number? How many FTs quota?

Marcelo Pugliesi

15:39>> We do have

15:42>> twenty, twenty five.

15:44>> 20.

Nathan Latka

15:45And that's pretty good. 90% of them hit their quota each quarter.

Marcelo Pugliesi

15:48>> Yeah. Yeah.

Nathan Latka

15:50What's the quota? A million a year in ARR? What's the quota?

Sales Quotas and Attainment

Marcelo Pugliesi

15:54>> Each of them has $3,000 per month

16:01>> as the initial quota. And the senior ones, they have

16:08>> $6,000 per month.

Nathan Latka

16:11I see. So if those senior people do add $6,000 every month for twelve months, that means they add $72,000 of MRR, which is equivalent of about 850,000 of ARR. So your top reps, that's what they do.

Marcelo Pugliesi

16:24>> Yes.

Nathan Latka

16:25Okay. Very interesting. Well, this is a heck of a story. We didn't I wanna wrap up talking about the product. Right? I mean, where do you see the customer success service space going over the next three, four, five years?

Marcelo Pugliesi

16:38>> Very good question. I actually

16:42>> think that every company and I think at hiplatform as well has to do first of all basics to guarantee that our customers are using the products in the proper way and also being a hub of information and data

Customer Success and Product Vision

Marcelo Pugliesi

17:06>> benchmarking of using the products and getting results of the product. So I think this is

17:13>> step one for customer success.

17:17>> But what I do see different in the coming years is that technology is making things very different in the way that we can delivery content, can delivery, we can have education products, programs in order to use our products. And as well as the way

17:40>> WhatsApp messaging, Facebook messaging, and this kind of apps. They are changing the way we relate to each other as a B2B software business.

17:54>> So I think we have a very different same same purpose with the basics

18:06>> concept, but

Nathan Latka

18:08Got it.

Marcelo Pugliesi

18:09>> Delivering it in a different way.

Nathan Latka

18:11Well, Marcelo, we're certainly rooting for you. We're out of time though now. Let's wrap up here with the famous five. Number one, what's your favorite book?

Famous Five Rapid Fire Questions

Marcelo Pugliesi

18:19>> Onward, Howard Schultz.

Nathan Latka

18:21Number two, is there a CEO you're following or studying?

Marcelo Pugliesi

18:27>> So many. So many. I actually really like Howard Schultz and so I'll put some Howard Schultz.

18:35Howard Schultz.

18:35>> From Starbucks. From Starbucks.

18:37>> Yeah.

Nathan Latka

18:38Number three. What's your favorite online tool for building hiplatform besides your own?

Marcelo Pugliesi

18:43>> Gogo.

Nathan Latka

18:44Gogo? Oh, Google.

Marcelo Pugliesi

18:46>> Google. Google. Yeah. Google Chats.

Nathan Latka

18:48Number number four. How many hours of sleep do you get every night?

Marcelo Pugliesi

18:53>> Six.

Nathan Latka

18:54Okay. And what's your situation? Married? Single? Kids?

Marcelo Pugliesi

18:57>> Married, one kid.

Nathan Latka

18:59Congrats. One kiddo. That's great. And how old are you?

Marcelo Pugliesi

19:03>> I'm 46.

Nathan Latka

19:04Last question. Something you wish you knew when you were 20 years old.

Marcelo Pugliesi

19:11>> Most of the most of the things I know today.

Nathan Latka

19:19Take one.

Marcelo Pugliesi

19:21>> To stay to stay calm in difficult times.

Closing Summary and Wrap-Up

Nathan Latka

19:27Guys, hiplatform.com was launched in 2017. The four co founders owned 20% together and other investors from an earlier merger deal owned the other 80%. Today, the company is doing $13,000,000 in ARR, up from 11,000,000 about 11,500,000 about a year ago. They raised a $7,000,000 round of funding their first outside funding last year at a 40,000,000 valuation, which was about a three x valuation multiple. And the co founders have gotten smart. They bought back a bunch of

19:53equity over the years. They now own 40% together, which is great as Marcelo and team focus on growing hiplatform.com customer success and software tool. Marcelo, thanks for taking us to the top.

Marcelo Pugliesi

20:05>> Thank you, Nathan. Good to see you. Bye.

Nathan Latka

20:07One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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 1PM

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