HiverhqHiver Revenue, Valuation & Funding (2024)

hey folks my guest today is natesh mandy he's the cto and co-founder of hybrid a help desk built for google workbook uh workspace he's been driving the project technology vision hybrid and has scaled the platform right from the first customer to thousands of customers who use the product now today he's passionate about building products which are used and loved by people globally and it's actually ready to take to the top yes that's great all right so tell me a little bit about hyper so when you say help desk for google workspace uh let me give an example how customers using you day we have close to 1700 businesses globally using the product give me an example how do they use you typically uh customer support teams would say foreign there is a travel vacation rental company and they would be servicing their customers through through our email channel where the customers write to them and they need to respond and resolve their queries so hiver lets them set up that shared mailbox where they can write to and they can respond to the customers and resolve their queries like a typical ticket management but built right out of gmail do you when i when i open up a hybrid on google workspace marketplace i see you've got 70 reviews you have over 270 000 downloads is this your main distribution channel there are two distribution channels uh we have the google uh marketplace as one of the channels the other channel is a pro map store uh you can install uh hiber as a browser extension and then proceed and use the product from there too and how many signups are you getting per month from these two sources we get close to around 300 to 400 signups [Music] month yeah and that's free or paid th this is uh including free and free and paid interesting and i guess take me down the funnel so what do you know that a new company has to do in the first day or two to increase the chances they convert to paid sure so it is very important for the products to become valuable as soon as possible for the onboarding customer uh that would mean they should see value immediately we help the customers to get the first win as quickly as possible which is setting up their shared mailbox and ensuring that the first email comes in and they uh see they can assign that email to an agent and see how the complete process works once that flow is done uh that is a big win for the customer and then we start on boarding the higher more advanced features on on the product which kind of exposes more value to them gradually and what are these customers today what do they pay you on average per month to use hyper we have different subscription plans so we we start from a 15 per month per user seat and we go till 59 per month per user our typical business might have maybe 10 to uh 20 users but it can even be bigger accounts when we have more than 100 200 users on the same account so 50 to 59 a seat if we sort of take something in the middle at 30 bucks a seat times a 20 person team is it fair to say the average company might pay you 500 or 600 bucks a month that is right okay and that's up a lot because i don't know if you remember this i had you back on the show in 2018 do you remember that uh that might be my co-founder niraj ah okay 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 evaluation 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 i'll have to go look that up but if you remember back then what he or you told me was that your guy's average rp was only 115 so you you've almost four or five x with the average customer paying you per month was that intentional yeah that is right and that is intentional we have invested a lot on the product to take it to that place and that's definitely helping us now 1700 paying customers at 500 bucks a month would mean you're doing about 850 000 a month in revenue is that about right uh it's more or less in the same ballpark okay do you think you can cross that this year 850 000 a month by december yeah yeah we shouldn't be okay and are you how are you funding a business did you decide to bootstrap or raise capital we have raised capital recently earlier this year uh but but we are fairly independent in how we operate all the money that we uh raise raising is going into funneling our marketing efforts and help me understand what that raise looked like how much did you decide to raise we raised 22 million in the last round and that was your series b yeah that's right and why did you need the capital obviously you have to you know you give up equity there's dilution there why take on another investor because there is an opportunity to grow faster and for that we need money capital so there is a big market out there we have a very good product market something that customer loves there is a huge opportunity to grow faster and this is the reason we went ahead raising more money and tell me what that opportunity is you mentioned pouring money into marketing and sales so do you know what it costs you to get a new 500 a month customer yes so uh you see the whole idea is to move the complete uh funnel faster that would mean you need more number of leads entering the funnel uh per per unit time per unit month so we wanted to have more leads entering the funnel every month on month and for that to happen usually your cost to acquire a customer would increase it will not be as optimal as it would have been before because you are competing on the same adwords same same keywords bidding on the same words so you would need more money if you want to increase the number of leads entering the funnel and that was the whole idea that we need to increase the budget push harder there and then get things moving but where paint that strategy for me so you have 20 million extra dollars where are you going to spend is it facebook ads linkedin ads google ads where you're going to spend it it's a mix of many things but yeah primary focus is google ads for us and so how much do you have to spend to get a lead from google we spend close to around around around 1600 to uh get a customer from google right now okay and is that just on google ads uh that is on google ads right okay so regular google ad on google ads and if you spend 1 600 to get a 500 a month customer yes okay so that's obviously good payback right that's a three month payback um any other strategies you plan to use besides google ads we we go heavy on content uh so you you would see that we produce a lot of content we do a lot of uh blog post uh guest guest posting uh that is also part of the strategy a lot of organic traffic also comes in uh through through all the blogs and the guest posting that we do [Music] is excuse me is there a particular keyword that you optimize for that brings in a lot of your traffic we focus on uh help desk for uh gmail google workspace uh that is something uh which which is very very targeted for us so if i type in help desk for gmail uh and search you guys should rank pretty high right so yeah so i'm seeing obviously google's organic listings uh and then obviously you guys are running ads there and then yeah you are the first you guys are the first non-google uh listing and then there's front and a bunch of the others that are competing with you not just is that who you see your base competitors at front so you're coming in is that who you believe your biggest competitor is would it be front uh to some extent yeah because the approach that they have taken is somewhat similar but we have used gmail as our canvas and built the product on top of that yeah is there are there any downsides to that uh there are uh there are definitely a lot of advantages but from our downstand standpoint uh we are limited uh with whatever gmail allows us to do on on on the on the interface and on the products front uh but we and we have to be very very creative in solving the same problems uh that might be much easier for front to solve but this also gives us a lot of advantage on what is already pre-built on top of gmail we don't have to reinvent the video and tesh obviously spending 1600 to get a customer you want to keep them as long as possible so what is your churn today and how do you try and improve that our churn is a pretty uh good we have close to around minus two percent net mrr at this point of time what we do is we try to keep and ensure that customer is engaged on the product very very well wherever we see the usage popping off which we keep driving throughout the product we get in touch with them and then try to see what is happening and try to retain them so we do this directly from the product as well as a team which keeps tries to keep track of the activity of a customer that makes a lot of sense now again you guys uh and you're right by the way what's your co-founder i had on the 2018 garage right yes yeah i i had him on he gave a great episode uh he said back then you guys were just breaking as is 2018 about a 1.5 million dollar sort of run rate if i look at uh your numbers today 1700 customers we already talked about this 800 ish thousand a month i mean it sounds like you guys can break sort of 10 million uh run rate this year why did um when you go out and raise 22 million bucks you raise it from k1 which is a private equity firm they're known for being pretty founder friendly meaning if you guys wanted to take secondary you could did you guys take any secondary there's no way to do it so all the 22 million went on the balance sheet yeah more or less why did you why did you make that decision why not try and ask for a secondary and get early liquidity for you and some early employees we we had a very small secondary but uh because the number was so small it's literally negligible so we wanted all the capital to go into the company and that was the primaries oh you mean like under a million dollars yeah that is true very very small well you guys what's impressed me about your story is you've been very capital efficient you raised a four million series a back in 2018 to scale up past five million are and then you raised four million in debt last year to buy some runway explain to me why you made that decision what was it like raising debt and how do you use it see we wanted to have some money to do some experiments that we wanted to show before we go for series b uh and we got those debt for very very good terms uh uh right and then we decided on picking that up uh using that to funnel our marketing uh show some good progress before we go for series b so that worked out for us very very well uh and i think it was a good call at that point you say very very good terms for an entrepreneur listening right now considering doing the same thing what terms would you consider very very good for debt uh i would say uh first it's it's like a pool of money and you get charged for only the money you uh you end up using and not the complete pool so that definitely helps and any any interest rate uh which which might be uh say under under 10 uh right that that i think is fairly reasonable uh from a understanding very very cool all right so that makes a lot of sense um you're now scaling now if you're doing just help us understand growth a little bit if you're doing about you know 800 000 bucks a month today in revenue do you remember what you were doing exactly one year ago uh we were we have nearly doubled [Music] oh wow so you were doing like 300 or 400 000 a month a year ago yes that isn't wow okay that's incredible growth did most of that growth come from expanding current customers getting them to buy more seats or was it adding new companies all together it's combination of both for us the expansion is a big level uh and that adds to a significant growth out of the complete growth that amazing well look you guys are building this very efficiently most folks when they're raising a series b are selling about 10 to their business is that about how much you guys sold uh some somewhat in in that ballpark did you feel like it was a fair evaluation yeah yeah very much okay so just for context if you sold 10 it would be something like 180 million dollars pre-money 200 million dollar post money something like that around that ballpark and why did that feel fair to you at the time obviously today markets are crashing right public stocks are crashing everything's crashing so you closed at the perfect time see one of the reasons why we liked talking to k1 and we thought they would add a lot of value when they come on board and especially the markets we were operating in particularly we are based out of india uh the complete team uh so uh we thought that was a fair valuation and the type of team we are bringing on board uh that that would be very helpful to help the business propel forward yep and how many folks there on the team full time we have close to around uh 120 folks at this point of time 120 on how many engineers close to uh 45. now natasha have you been able to hire all of those engineers in india more or less we have couple of folks works from outside india but yeah most of them are from india which city bangalore chennai punai uh post kovar we started uh hiring all from all over india uh but yeah still the primary workforce is based out of bangalore bangalore okay i feel like that's where all the sas companies are bangalore bangalore bangalore huh that is true all right good stuff what a great story let's wrap up here with the famous five number one what's the last book that you read uh it's it's a book called soul of money uh so it talks about how how uh you can uh what what is the purpose of money yeah and and how should you think about utilizing money for your growth number two is there a ceo you're following or studying uh not really okay number four number three what's your favorite online tool for building hiver besides your own retool is a good uh tool that we use very very commonly in product use number four how many hours of sleep do you get every night um i i i think i get pretty good probably six to seven hours sleeps maybe okay that's pretty good uh what's your situation married single kids married any kids none okay and how old are you natash i am 38 38 last question what's something you wish you knew when you were 20 that's an interesting question i think i was not experimenting too much being very very scared about uh failures uh right and and probably i should have experimented more when i was in twenties uh so probably this is what i'll tell if i meet my twenty year with myself when i was from here uh guys experience experiment more hybrid hq launch back in 2011 broke a million dollar run rate in 2018 broke a 4 million run rate last year and this year on track to break a 10 million run rate growing nicely 1700 teams are using them to do support and help desks right inside of gmail that's their number one go to market chrome extension and google work uh workplace marketplace uh workspace marketplace they just raised a 22 million series b sold around 10 of the business 120 on the team as they look to scale 102 net dollar attention so it's a sticky tool as they look to continue to build and grow and double down on marketing and sales natash thanks for taking us to the top thank you thanks for your time 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 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