HirePort Revenue, Valuation & Funding (2024)

hey folks my guest today is bram medina he is the ceo at hireport a platform that brings back speed scale and simplicity to external recruitment he's an industrial engineer former vc and private equity investor and serial startup founder now living in amsterdam with his wife tanya and two-year-old marcus all right brian you're ready to take us to the top absolutely nathan okay let's jump in here so um who's paying for higher port today and how are they using you yes it's a mix of companies i would say startups scale ups and also smaller corporates today um the model is very simple it's a hundred percent accurate no pay that's what most companies know in the external recruitment business so uh we decided to offer them something they understand already on top of that there will be layers with sar solutions so there's additional services that have a monthly subscription so let's talk about the sas first what are people paying like per month what's the fee they're paying per month what they get yeah it depends on the kind of integrations that they want we have applicant tracking system integrations today for mid-sized companies and smaller startups that would be about 99 euros a month and for larger companies that would for example use workday or sap success factors those are applicant tracking systems for enterprises they would pay around 500 euros a month so the sas fee is dependent on the level of integrations they want whether it's a you know startup tool or an enterprise tool 100 that's it i see okay very cool and so um what and if you split down your total revenue what percent would you say is coming from sas versus other we'll just call it other revenue yeah currently it's a small percentage from sas it's about ten percent okay um but we expect that to grow really rapidly the most the biggest part of the recurring business is actual placements taking place on the platform now let's talk about that right the success right so so how do you charge when you successfully place a candidate yeah there's a fixed fee that we charge so when there's for example a senior um engineer that's placed at one of our companies on the platform there's a fee that's around 16 000 euros and um a small part of that lands with us transaction fee and most of that fee goes to the actual recruiter who made that placement the recruiters are the heroes on our platform and i think today maybe there's not a lot of people who really love the external recruiters anymore we do have we filter out the best ones and we give them a podium to be able to deliver at the best companies right now 16 000 euros about 20 000 usd what percent of that 20 000 success fee will the recruiter typically get uh over eighty percent eight zero or one eight eight zero eighty wow okay so so i mean we're talking like 16 16 000 something like that so is the rest the other 20 goes directly to you yeah the other percentage goes to us that's what we live from so that's the most important uh revenue driver right now which is supported by the sas subscriptions i see interesting model so basically every candidate you place you're going to make 4 000 usd or something like 3 000 euros per placement yeah that's okay what um take me give me some sort of history here when did you launch the business what year yeah we launched in 2020 really a few months after covid hit so this is something that we always wanted to do i've been active in many industries but i rolled into recruitment by accident years ago we had our own agency so we have four years of five fixing actually uh years of experience in this business but we always operated in a model that didn't scale so it was high quality what we did but you just had to put more people on a payroll to scale and doesn't work anymore you know these days you see in in the platform economy that people need a exponential solution to the problems not a linear one so we decided to bundle all the forces of all these small independent players that are there everywhere and put it all together give them a platform to be able to deliver to the most interesting companies then you have something that skills instantly 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 founderpath and we're thrilled to bring it to you all right we're going to 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 that that eight so what you're saying is you had troubles recruiting at your agency and you said there needs to be a solution for this and then you build scratching your own itch effectively exactly the amount of people in your payroll just limits how scalable your solution is and most companies would call us and say listen i need a team of ten engineers and i need them within two months that is not something that any agency can easily easily can do um that's only something that you can do when you bundle all the forces of a lot of players and you instantly make that available talk to me a bit about the agency so what what was the agency doing yeah the agency was helping companies find tech talent for permanent unemployment oh it was also doing a recruit okay so you weren't recruiting for yourself that you were having problems recruiting for other people in an agency model yes exactly exactly that and then we run into this this ceiling you know that that made us see that the only way to do this is to use technology to unlock all that power and take away all the paints so when did you make that shift when did you launch the agency the agency we launched in 2016 2016. okay and up up and up right until 2019 so the year before you launched higher port how much total revenue did the agency do how big did you were able to grow it uh that there was a number of millions of euros okay millions and i guess translate that to number of candidates placed in 2019 via the agency in 19 that's a good one um or your best year how many did you place in your best yeah i think i think it would look at about 70 placements a year 70 placements okay and and uh were you so if you're doing millions of euros of revenue off 70 placements you're not making only 4k per placement you're really a traditional recruiter back then charging big placement fees yes you would get the full placement fee but you would also have the people on the payroll and all those extra costs of course oh i see i see interesting okay so you then pivot in in 2019 into 2020 to higher port do you shut down the agency completely or do you transfer the talent over no we shut it down we should get it done okay why not sell it i mean you're doing three million or four million in revenue why not go try and sell it yeah i think that the most interesting thing to sell you know is the client relationships and actually some of those clients we brought with us to the new platform so you always have this cold start problem let's say to get things running right and this really helped us to straight away have a number of paying customers that wanted to join that believed in what we wanted to achieve and we already had a network with other recruiters at other agencies so we had kind of a good starting point and that really helped us get things going and then i guess help me understand traction today at higher port so last month how many candidates did you place i think um you know what's more interesting right now is to look at the annual recurring revenue under the level that we're at it's it's a number of placements every month uh i think we're now at about um let's say 600 000 euros your recurring revenue that that we're achieving and how are you looking how are you calculating that are you taking last month's revenue times 12 no i'm in this case i'm taking uh this month's expected revenue times 12 because we already have placements in the books and we see that more is coming well okay let's be more specific both of those though are a projection right you're guessing how much you're going to do this month and then you're multiplying by 12. those are both huge assumptions i want to give you credit for what you've already done so last month what was total revenue run rate yeah um let's see last month was 16k okay one six so and is that so is that coming from four placements where you earned 4k per placement or is that really like three placements where it's 4k so 12k there and then the other 4k of revenue is coming from sas fees yeah no this is uh four placements and going up and the south part is really really small at this point in time okay got it yeah you don't have anything how many how many how many customers i guess do you have paying an actual like a sas fee one or two or so you're still pre-launched on that notice we have one or two actually we have one let's say sign contract one coming up so this is an integration applicant tracking system of greenhouse and um we have a number of other epic tracking systems like recruitees very popular here we have people running on home run workday sap success factors these are ats systems that we developed api connections with right now got it and those four placements that you placed last month was that all into one company or how many unique companies did you place those in those were four companies four separate okay interesting so how many i mean do you what are like the measurements you care about is it number of placements per month or per year is it number of unique companies that hire at least one person through your platform is it number of recruiters that make a dollar through the marketplace what is it yeah i think the most important things for us is the amount of interesting jobs that are on the platform and the amount of highly skilled recruiters that are on the platform those two you want to match with the current infrastructure and team that we have we can do 10 times 15 times the revenue that we do right now it's super scalable so once you have a company on the platform we now have companies like um yeah grand vision is a client of ours they have one role very happy what we did they won another role they expand so it's a super scalable model in that sense how many recruiters are on the platform today right now there is 104 recruits on the platform is growing hand-in-hand with companies how do you define on the platform you know getting a million recruiters but if no one's actually hiring anybody right that doesn't do you any good so how do you define on the platform yeah that means that we have screened someone for an hour and they came through that screening with a positive outcome they've given been given access and they can actually see what is happening on higher parts that is the potential power on the recruiter side then also we measure of course how large the percentages of people that are active that that log in every week you can check out the vacancies and actually propose people those are different metrics it's very high actually so right now let's say amount of recruiters that are active from those is over 60 and the amount of recruiters proposing is around 30 and that is already with the size that we are today which is relatively small as 30 companies that are on the platform right now with on average two to three vacancies so between let's say 70 and 100 vacancies jobs so but that could scale really quick okay got it so so 30 companies with an average of two vacancies 104 recruiters trying to help those 30 companies that's the marketplace model how many of the 104 recruiters have placed at least one candidate successfully that be around 10 10 yeah power serious power laws here obviously right you've got your top ten recruiters doing most the business yeah they're definitely recruiters that have made several placements indeed and um yeah that is an interesting metric to see and how many since launch how many total candidates have you placed to date i think it would be close to 20 20. i mean that's the money metric right that's the ultimate success thing you want that number to get up in the hundreds and thousands and millions eventually hopefully absolutely absolutely but that's going up really quickly so uh you if you look at our growth right now it's between 30 50 percent quarter and quarter if you keep doing this those numbers per month will go up massively well yeah but it's really easy to go from one candidate place to two and caught 100 percent growth right so i know that as a private equity guy come on you've seen pitch decks where founders try and throw you forward 300 percent growth but they went from one dollar to three dollars you know yeah yeah okay fair enough fair enough so um and just to be clear so sixteen thousand dollars sort of a monthly appointment well monthly rep not recurring really but monthly revenue last month where were you exactly a year ago were you totally pre-revenue free revenue okay got it so you spent 2020 and then almost all of 2021 really building 100 we building building and also on the supply side making sure you have the right recruiters on the platform make sure you activate them on the company side as well uh that's that's where most of the work is and then once you have the trust once the engine has started which i think is fair to say we solved this cold start problem for the netherlands that's the stepping stone for europe and then that's the stepping stone for the u.s that's where we are right now so the focus for 2022 is really expanding the business in the netherlands more placements more learnings stronger supply side stronger demand side interesting companies and then 2023 we will go abroad to europe i'm also preparing a funding round in the next months to make that possible are you bootstrapped today no we have we have investors so we did a lot of the investments ourselves up to the moment the platform was actually ready then we brought on a number of investors informals and also a venture capital fund and we raised uh half a million dollars in what was september last year september last year half a million september last year and then how much did you guys put in personally i guess pre-launched when you jumped in yeah that's a bit hard to say i mean it's i mean not necessarily purely cash but we had very low income all kinds of stuff like that so we had all the clients that we brought in from the previous company which we funded so in terms of value substantial value but how much cash i mean like literally i always like to know you know you drain your savings to launch the startup or are you playing it safe and keeping a cushion no no i'm all in but that that also has to do with um let's say the funding of everything up to the moment we launched high airport that came from our pockets actually but hyper was a new venture that we then started so um and what who is we what is did you have how many co-founders three so there's alexander there's ramco and myself and now there's six of us in total and did you guys split the three co-founders split equity evenly at the start or no we did okay so 33 percent each which is nice and diplomatic and then it sounds like you're at six full time today when you do that 500 000 precede round back in 2020 most precedes you're seeing sort of a maybe a five cap something like that were you sort of selling 10 to 20 percent of the business in that range yeah we were aiming for about that but um let's say closer to 20 okay got it so you saw about twenty percent so that you're talking like uh maybe a 2.5 post money valuation right that's about right okay and what are you targeting now in this current round we are going to raise the two million euros okay and do you know what you're targeting in terms of valuation like you don't want to sell more than x percent no no no but there's so many factors that are important to us i think the most important factor is to get uh vcs on board that open doors that have a portfolio of companies that we can plug the solution in i think all those factors are much more important than only the valuation of course we're looking at a healthy model right to still have the ability to steer the company together with the lead investor and current lead investor but um no we're looking at at the ranges it's something that we need to discover yeah very cool all right let's wrap up your brand with the famous five number one last book that you read yeah um last book that i read that is my favorite book i keep rereading it it's a nelson mandela in his own words number two is there a ceo you're following or studying i like elon musk a very complicated person very inspiring person but i love the way he approaches uh all problems and new problems and solves it in a completely new way number three what's your favorite online tool for building higher port salesforce number four how many hours you sleep to eat every night try i try to get eight but uh my little boy has different plans sometimes so between seven and eight all right so what married one kid yes mary one kid and uh it's the perfect team for now that's awesome and how old are you bram i am 40 years old last month 40 years old congrats and uh last question something you wish you knew back when you were 20 years old to wish myself yep good question i wish to keep on taking a lot of risk high risk high reward i think that's that's one of the most important messages guys hireport.io started off as an agency in 2016 grew to about three million dollars in revenue before going you know what we need to build software for this shut down the three million dollar agency launch higher port dot io three co-founders 33 each they're now scaling six people they place four candidates last month they make on average 20k per place candidate but they're building a marketplace recruiters on their platform actually take about 16 000 of that 20k fee and hired port only keeps about 4k so they're allowing over 104 recruiters to build livelihoods on the platform and the marketplace serving 30 customers they have on-boarder with about two job openings each so marketplace is healthy they're scaling 500k raised on the precede round at 2.5 posts looking to raise 2 million today we'll see where bram takes it next brand thanks for taking us to the top thank you so much nathan 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 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