Hiverrevenue, valuation & funding

hello everyone my guest today is Niraj Rondo and lt started his company hiver in late 2011 over the past 7 years have virtually bootstrapped it to 1.5 million bucks in ARR there mr r grew sixty percent in the last five months and they're now growing ten percent month-over-month announced in your series a sooner are you ready to take us to the top let's get started Nitin all right what is hayver and how do you guys make money so however is basically a tool that lets teams manage emails coming in to you know a shared email account like support at your company dot-com or in foetal company.com right so you know let's say you are a team of say five to ten people that basically handles that emails that come into a shared email account you would want to delegate emails keep track of who is doing what look into analytics of you know how you are doing you know where we are and what needs to be done and you know how your team is performing right you basically let you do that right from a gmail account interesting so this is kind of there's other companies like front app which kind of do something similar to this but if that's in their own interface not inside of Gmail absolutely so think of quests like front or Zendesk to some extent or is just to some extent that inside the Gmail code interesting okay and and walk me through numbers so what's your monthly recurring revenue today so yeah we are at one hundred and fifteen thousand dollars in a mama murder right now okay one hundred and one one five you said well okay so they're about 1.4 million in air are right now yeah yes that's great now you bootstrap today but you're gonna really rate up to announce the series a yeah we did not actually accurately bootstrap so we raised around one hundred and seventy-five thousand dollars through engines back in two thousand twelve or so and then we bootstrapped it you know there's a small team we just kept growing it and and we went through a couple of pivots on the product too and then we have basically have brought it to one point five million dollars in error and now we're going to announce it next month and so how much are you raising the series a so the city's a is close to a million dollars okay you're raising four million yeah got it and and are you raising mostly in India or folks back in the states how's that working so they did mr. Scindia in India okay and what is it are you getting terms that are similar to the US or like is it on a safe note or equity or what it's an equity in or it's it's it's equity pretty much like what a typical Series A in the US would look look like got it and what valuation are you raising at I don't know whether it's tape to disclose that but it's in the 15 to 20 million dollar range okay got it so you call it your song somewhere between what is that fifteen and twenty five percent of the company yeah interesting and and how did you negotiate that so that you know that's like that's like a ten or fifteen X your current air are yeah so you know the way we negotiated was basically you know to essentially show the velocity at which we are right now essentially show the size of the market that we are in which is very very big if you take into account you know how how many people actually need it right so yeah it's it's basically a function of the venice velocity that we have been able to hit and the size of the market and of course the fantastic project that we have managed to build you know which is really intuitive and easy to use so I think everyone we showed the product to whether the invested or not everyone was really impressed with our vision that we bring to the product and how simply we made it you know and is the round actually done how do you actually have the money in the bank or no so it should be so we are in the final stages of the diligence and should be there that's great I think we have fifteen days away from getting the check that's great put all this on our timeline for me when did you launch the company so yeah so the company was launched around the middle of 2011 okay and we were a small four to five people team for the largest part of our existence okay and it was a very different product when we launched and we actually went through two I creations on the product before we came to this sometime in 2017 okay and what are you at today how many teammates we are 36 people no 36 people everyone based in Bangalore absolutely okay well so there's 36 people and cashflow positive or no yeah we are okay so cash flow positive today and you mention it was yeah yeah okay so about break even yeah what what is growth so today you're doing a hundred fifteen grand a month what were you doing a year ago in August 2017 so as I mentioned right I mean we really accelerated in the last you know six months or so the product was very different earlier and it took some time for us to you know really build it out to the point where it is and mature it right so six months back we were at you know fifty five to sixty thousand dollars in emerald only give me more after twelve months ago months ago would have been you know the growing pretty slow idea so we would have been at around forty five to fifty k forty five thousand bucks okay that's great so good growth you've you've more than you almost tripled kind of year over yeah which is great and what's total customer count today how many paying customers so we are approximately 2,000 customers yeah 31,000 awesome customers and what are they pay on average per month so on an average customer would be you know one hundred fifty two hundred and sixty dollars yeah yeah or if I take a hundred fifteen grand per month divided by a thousand HP about 115 bucks per month right now yeah and what are they what are they getting for that is it a number of seats feature sets same size what is it yeah so it's it's basically so we have three plants and on an average the customers which we have acquired recently you know would be paying twenty to twenty seven twenty three dollars per seat right so an average account is usually six to seven seats mm-hmm and what is churn look like today so we have neck- you know mhm and of course so our net amount L is around minus two point five percent at this point I'm sorry so net negative revenue churn of negative two percent minus two point five percent yeah yeah that's it yeah that's great and um and and what about logo churn noble Chen would be at around two percent per month two percent per month gross or net of course okay that's great and and what have you done so at this price point you know getting churned that low is pretty impressive what have you done a drive turned out so the park is really sticky you know I think I think it's primarily a characteristic of the product you know once we get people on board it they tend to grow right because you know it's very sticky it is something that you really need on a day-to-day basis you know I mean an average user would have you know twenty five to thirty interactions with the product in terms you know what they're doing with it every day right so very sticky you know people once they get used to it it's hard for them to move out so I think the most of the chair actually happens in the first three months but you know if we can get people through the first three three to four months you know they tend to stick end in basically grow with the product mm-hmm and what about customer acquisition cost walk me through how you're driving all this growth and what he paid a question new customer so almost all of it is organic first of all you know if you we we do pretty well on some very high intent low traffic high intent keywords right if you sell for shared inbox or if you look for a way to do customer support or don't see where it says for any combination of Gmail and help desk for example right you'll find us very very easily so you know I think we are acquiring 80 to 90 percent of our customers free of cost you know through organic search right and the rest is actually coming through Adwords we have a small 8 to 9 8 to 9 k 8 to 9 thousand dollars per month in address spend which is you know driving some of our acquisition so again what's the CAC on the pay channels okay so you know I have this blended khaki lies you'd sail across organic and you know they would be around $150 to acquire a single logo okay and so what payback period there is four or five months this is yeah some one month where's most money you're about to raise where you gonna spend it yeah so you know I mean the product needs a lot of work you know so basically we are a very small you know 20 people product team and if you look at where the product can go if you if you look at the you know the scope to build out on top of email is a platform it's huge right so so a huge amount of the investment will actually go into taking the product into new directions you know basically improving what we have right now and the rest of course will go into marketing right I mean we will play a lot more with paid marketing it will go much more aggressive on that interesting what do you assume lifetime value in months and in dollars is so our current lifetime value right now is five thousand four hundred dollars approximately and how do you calculate that so you know it's basically what char COBOL tells us based on our current channel expansion you said you use char mobile you have this champion you like it absolutely love it good good good all right very good um let's see here what about expansion revenue so besides adding additional seats any other way to drive expansion remember currently or no yeah so you know I mean that's that's where a lot of the product work on the particles is needed because you know our our pricing test you know I mean we basically sell you know one tier which is the mid tier we cannot push a lot of the people the higher pricing tiers because you do not have the features which basically will help us you know get you get them to pay more right so we need a lot more in the product in terms of feature depth and that is where a lot that lot of the investors will go into right because that will directly help us you know get more money out of you know the existing customers by giving them more stuff besides SEO and besides the direct ad spend that your you're currently doing are there any other growth channels that are really working well for you I think I think the deserve pretty much the two things that we have tried we have we are dabbling with a lot of stuff you know we have a very strong presence on G to crowd the sass you know marketplace okay for a third organic we are still not paying for it I mean oh I mean we definitely start paying for it you know when we have you know the investor money coming in but we are seeing that as a strong channel because the presence is very strong we are actually rated one of the top ten has just for 2018 we are also featured on the report on the space right so so yeah that the marketplace is in general should come out to be a very very strong shell Express very good alright let's wrap up here Niraj with the famous five number one what's your favorite business book as either good one number two is there as is there a CEO you're following or studying right now no I I don't do that video number three what's your favorite online tool for building your business besides your own help spark ready haven't used number four how many hours of sleep to get every night I try to grade seven okay is that what you get I managed to okay alright and what's your situation married single kids I am I'm I'm married I have one kid I'm expecting the seven Monday the second one next month oh that's exciting in how old are you I'm an last question what he was your 20 year old self new I wish I was better at quoting but you have it sounds like a pretty big dev team there yeah but do you know I mean it you know speed in the early days is is very dependent on the founders coding themselves you know and I think we took quite a lot of time getting to you know a real product market fit and I think that could have been shortened you know if we handled a lot of things better than we did yeah do you have how many founders are there is it just you we're just just too as me yeah is the other one the developer yeah hardcore but not no J's moved to product no you know so we are both out of you know coding thanks good very good Niraj well guys there you have it again launched back many years ago 2011 they're now helping hyper hyper HQ they're basically helpdesk inside of gmail they have over a thousand customers paying them on average 115 bucks a month doing about 1.3 million in AR today that's up from just 45 K per month back in August of 2017 is almost 3x growth year over year they're getting ready to announce a four million dollar series a at a fifteen to twenty five million dollar valuation so healthy growth four point three million bucks total in the company to date again acquiring customers through ad spend but economics are making a lot of sense there's also you know just search ranking results that are driving them new customers for and $15 kak blended four month payback period lifetime by about 5,400 bucks negative revenue churn of negative two point five percent and they'll go turn about two percent gross per month Niraj thank you for taking us to the top thanks David thanks a lot