How Hiver Reached $9.6M Revenue and 1,700 Customers with a $22M Series B (Interview with Co-Founder Nitesh Nandy)

Introduction and Hiver Overview

Nathan Latka

00:00Hey folks, my guest today is Nitesh Nandy. He's the CTO and co founder of Hiver, a help desk built for Google Workspace. He has been driving the product and technology vision of Hiver and has scaled the platform right from the first customer to thousands of customers who use the product now today. He is passionate about building products which are used and loved by people globally. Nitesh, are you ready to take us to the top?

00:19>> Yes.

00:19That's good

00:20stuff Alright. So tell me a little bit about Hiver. So when you say help desk for Google Workspace, maybe give an example of how customers are using you today.

Customer Base and Product Use Cases

Nitesh Nandy

00:30>> We have close to 1,700 businesses globally using the product.

Nathan Latka

00:36Give me an example of one of them, how do they use you?

Nitesh Nandy

00:40>> Typically, customer support teams would say for example, there is a travel vacation rental company and they would be servicing their customers through an email channel when 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.

Nathan Latka

01:13When I open up Hiver on Google Workspace Marketplace, I see you've got 70 reviews, you have over 270,000 downloads. Is this your main distribution channel?

Nitesh Nandy

01:25>> There are two distribution channels. We have the Google marketplace as one of the channels. The other channel is a Chrome app store. You can install Hiver as a browser extension and then proceed and use the product from there too.

Nathan Latka

01:40And how many signups are you getting per month from these two sources?

Nitesh Nandy

01:47>> We get close to around 300 to 400 signups.

Nathan Latka

01:52Per month?

Nitesh Nandy

01:54>> Yeah.

Nathan Latka

01:55And that's free or paid?

Nitesh Nandy

01:58>> This is including free and paid.

Distribution Channels: Marketplace and Chrome Extension

Nathan Latka

02:02Interesting. 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 pay?

Monthly Signups and Conversion Funnel

Nitesh Nandy

02:11>> Sure. So it is very important for the products to become valuable as soon as possible for the onboarding customer. 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 they can assign that email to an agent and see how the complete process works. Once that flow is done that is

02:46>> a big win for the customer and then we start onboarding the higher more advanced features on the product which of exposes more value to them gradually.

Nathan Latka

02:58And what are these customers today, what do they pay you on average per month to use Hiver?

Pricing Plans and Average Customer Spend

Nitesh Nandy

03:04>> We have different subscription plans. So we start from $15 per month per user seat and we go till $59 per month per user. Typical business might have maybe 10 to 20 users, but it can even be bigger accounts where we have more than 100 to 100 users on the same account.

Nathan Latka

03:27So $15 to $59 a seat, if we sort of take something in the middle at $30 a seat times a 20 person team, is it fair to say the average company might pay you 500 or $600 a month?

Nitesh Nandy

03:36>> That is right.

Nathan Latka

03:38Okay. 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?

Nitesh Nandy

03:45>> That might be my co founder, Niraj.

Nathan Latka

03:48Ah, okay.

03:50Oh, 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

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04:59not 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, 1,200,000 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

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ARPU Growth Since 2018

Nathan Latka

06:12Alright. 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 average ARPU was only $115. So you've almost four or five x what the average customer is paying you per month. Was that intentional?

Nitesh Nandy

06:28>> 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.

Nathan Latka

06:37Now 1,700 paying customers at $500 a month would mean you're doing about $850,000 a month in revenue.

06:43Is that about right?

Nitesh Nandy

06:45>> It's more or less in the same ballpark.

Nathan Latka

06:48Okay, do you think you can cross that this year 850,000 a month by December?

Nitesh Nandy

06:54>> Yeah, we should be.

Nathan Latka

06:56How are you funding the business? Did you decide to bootstrap or raise capital?

Revenue Run Rate and Growth

Nitesh Nandy

07:01>> We have raised capital recently earlier this year.

07:05>> But we are fairly independent in how we operate. All the money that we are raising is going into funneling our marketing efforts.

Nathan Latka

07:15And help me understand what that raise looked like, how much you decided to raise?

Nitesh Nandy

07:21>> We raised 22,000,000 in the last term.

Nathan Latka

07:25And that was your series B?

Nitesh Nandy

07:27>> Yeah, that's right.

Nathan Latka

07:28And why did you need the capital? Obviously, to give up equity, there's dilution there, why take on another investor?

Series B Raise and Growth Rationale

Nitesh Nandy

07:35>> 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 fit, something that customer loves. There is a huge opportunity to grow faster and this is the reason we went ahead raising more money.

Nathan Latka

07:54Tell 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?

Nitesh Nandy

08:02>> Yes. So

08:06>> the whole idea is to move the complete

08:11>> funnel faster. That would mean you need more number of leads entering the funnel 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 per customer would increase, it will not be as optimal as it would have been before. Because you are competing on the same AdWords, same keywords bidding on the same words. So you would need more

Customer Acquisition Cost and Google Ads Strategy

Nitesh Nandy

08:44>> money if you want to increase the number of leads entering the funnel And that was the whole idea that we need to increase our budget push harder there and get things moving.

Nathan Latka

08:54Paint that strategy for me. So you have 20,000,000 extra dollars, where are you going to spend it? Facebook ads, LinkedIn ads, Google ads, where are you going to spend it?

Nitesh Nandy

09:03>> It's a mix of many things. But yeah, primary focus is Google ads for us.

Nathan Latka

09:09And so how much do you have to spend to get a lead from Google?

Nitesh Nandy

09:13>> We spend close to around

09:18>> 1,600 to

09:21>> get a customer from Google.

Nathan Latka

09:26Okay. And is that just on Google Ads?

Nitesh Nandy

09:31>> That is on Google Ads, right.

Nathan Latka

09:32Okay.

09:33So regular Google Ads on Google Ads and you spend $1,600 to get a $500 a month customer?

Nitesh Nandy

09:39>> Yes.

Nathan Latka

09:40Okay. So that's obviously a good payback, right? That's a three month payback. Any other strategies you plan to use besides Google Ads?

Content Marketing and Organic SEO

Nitesh Nandy

09:49>> We go heavy on content. So you would see that we produce a lot of content, we do a lot of blog posts, guest posting that is also part of the strategy. A lot of organic traffic also comes in

10:06>> through all the blogs and the guest posting that we do.

Nathan Latka

10:11Is there a particular keyword that you optimize for that brings in a lot of your traffic?

Nitesh Nandy

10:16>> We focus on help desk for Gmail, Google workspace. That is something which is very, very targeted for us.

Nathan Latka

10:25So if I type in help desk for Gmail in search, you guys should rank pretty high.

Nitesh Nandy

10:30>> Right? So, yes.

Nathan Latka

10:31So I'm seeing obviously Google's organic listings and then obviously you guys are running ads there and then yeah, you are the first, you guys are the first non Google listing and then there's Front and a bunch of others that are competing with you.

Nitesh Nandy

10:48>> That is true.

Nathan Latka

10:49Is that who you see your biggest competitors at Front?

Nitesh Nandy

10:52>> Sorry, come again.

Nathan Latka

10:54Is that who you believe your biggest competitor is? Would it be Front?

Nitesh Nandy

10:57>> To some extent, yeah, because the approach that they have taken is somewhat similar. But we have used Gmail as our canvas and build the product on top of that.

Nathan Latka

11:07Yeah, are there any downsides to that?

Nitesh Nandy

11:12>> There are definitely a lot of advantages. But from a downside standpoint, we are limited with whatever Gmail allows us to do on interface and on the product front. And we have to be very, very creative in solving the same problems that might be much easier for us 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 wheel.

Nathan Latka

11:41And Nitesh, obviously spending $1,600 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?

Net Dollar Retention and Churn

Nitesh Nandy

11:50>> Our churn is pretty good. We have close to around minus two percent net MRR churn 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 dropping 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

12:18>> the product as well as a team which tries to keep track of the activity of a customer.

Nathan Latka

12:25That makes a lot of sense. Now again, guys and you're right by the way, was your co founder, I had him in 2018, Niraj, right?

Nitesh Nandy

12:32>> Yes.

Nathan Latka

12:33Yeah, I had him on. He gave a great episode. He said back then you guys were just breaking, as of 2018, about a $1,500,000 sort of run rate. If I look at your numbers today, 1,700 customers, we already talked about this 800 ish thousand a month. I mean, sounds like you

12:49guys can break sort of 10,000,000 run rate this year. Why did When you go out and raise $22,000,000, you raised 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?

Nitesh Nandy

13:07>> No, we didn't.

Nathan Latka

13:08So all the 22,000,000 went on the balance sheet?

Venture Debt Round and Terms

Nitesh Nandy

13:11>> Yeah, more or less.

Nathan Latka

13:14Why did you make that decision? Why not try and ask for a secondary and get early liquidity for you and some early employees?

Nitesh Nandy

13:21>> We had a very small secondary, but 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 primary reason.

Nathan Latka

13:31You mean like under $1,000,000?

Nitesh Nandy

13:34>> Yeah, that is very, very small.

Nathan Latka

13:37Well, guys, what's impressive about your story is you've been very capital efficient. You raised a 4,000,000 series A back in 2018 to scale up past 5,000,000 ARR. And then you raised 4,000,000 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?

Nitesh Nandy

13:54>> See, we wanted to have some money to do some experiments that we wanted to show before we go for Series B And we got those debt for very, very good terms. And then we decided on picking that up using that to funnel our marketing show some good progress before we go for Series B. So that worked out for us very, very well. And I think it was a good call at that point of time.

Nathan Latka

14:21You 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?

Nitesh Nandy

14:30>> I would say first it's like a pool of money and you get charged for only the money you end up using and not the complete pool. So that definitely helps. And any interest rate which might be say under 10% rate that I think is fairly reasonable from a debt standpoint.

Year-Over-Year Revenue Doubling

Nathan Latka

14:54Very cool. All right. So that makes a lot of sense. You're now scaling up.

14:58You're doing just help us understand growth a little bit. If you're doing about $800,000 a month today in revenue, do you remember what you're doing exactly one year ago?

Nitesh Nandy

15:07>> We

15:09>> have nearly doubled how we were one year back.

Nathan Latka

15:13Oh, wow. So you were doing like 300,000

15:15or $400,000 a month a year ago?

Nitesh Nandy

15:17>> Yes, that is right.

Nathan Latka

15:19Wow. 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 altogether?

Nitesh Nandy

15:27>> It's combination of both. For us, the expansion is a big lever and that adds to a significant growth of the complete growth that we get.

Nathan Latka

15:37Amazing. Well, look, you guys are building very efficiently. Most folks when they're raising a series B are selling about 10 of their business. Is that about how much you guys sold?

Nitesh Nandy

15:49>> Somewhat in that ballpark.

Nathan Latka

15:51Did you feel like it was a fair valuation?

Nitesh Nandy

15:53>> Yeah, yeah, very much.

Nathan Latka

15:55Okay.

15:56So just for context, if

Team Size, Engineers, and Bangalore HQ

Nathan Latka

15:57you sold 10%, it would be something like $180,000,000 pre money, 200,000,000 post money, something like that.

Nitesh Nandy

16:04>> Around that ballpark.

Nathan Latka

16:05And why did that feel fair to you at the time? Obviously today markets are crashing, public stocks are crashing, everything's crashing. You closed at the perfect time.

Nitesh Nandy

16:14>> 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

16:23>> and especially the markets we were operating in particularly we are based out of India, the complete team. So we thought that was a fair valuation and the type of team we are bringing on board that would be very helpful to help the business propel forward.

Nathan Latka

16:40And how many folks are on the team full time?

Nitesh Nandy

16:43>> We have close to around 120 folks at this point of time.

16:47>> 121.

Nathan Latka

16:48And how many engineers?

Nitesh Nandy

16:50>> Close to 45.

Nathan Latka

16:54Now, Nitesh, have you been able to hire all those engineers in India?

Nitesh Nandy

16:59>> More or less. We have a couple of folks who work from outside India, but most of them are from India.

Nathan Latka

17:05Which city Bangalore, Chennai, Pune?

Nitesh Nandy

17:09>> Post COVID we started hiring all from all over India. But still the primary workforce is based out of Bangalore.

Nathan Latka

17:17Bangalore. Okay, I feel like that's where all the SaaS companies are. Bangalore, Bangalore, Bangalore.

Nitesh Nandy

17:21>> That is true.

Nathan Latka

17:22All 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?

Famous Five and Closing

Nitesh Nandy

17:30>> It's a book called Soul of Money. So it talks about what is the purpose of money and how should you think about utilizing money for your growth?

Nathan Latka

17:45Number two, is there a CEO you're following or studying?

Nitesh Nandy

17:49>> Not really.

Nathan Latka

17:50Okay. Number three, what's your favorite online tool for building Hiver besides your own?

Nitesh Nandy

17:58>> Retool is a good tool that we use very, very commonly in product teams.

Nathan Latka

18:04Number four, how many hours of sleep do you get every night?

Nitesh Nandy

18:08>> I think I get pretty good, probably six to seven hours sleeps.

Nathan Latka

18:15That's pretty good. And what's your situation? Married, single, kids?

Nitesh Nandy

18:18>> Married.

Nathan Latka

18:19Any kids?

Nitesh Nandy

18:20>> None. None.

Nathan Latka

18:21Okay. And how old are you, Nitesh?

Nitesh Nandy

18:24>> I am 38.

18:25>> 38.

Nathan Latka

18:26Last question. What's something you wish you knew when you were 20?

Nitesh Nandy

18:31>> That's an interesting question.

18:37>> I think I was not experimenting too much, being very, very scared about failures. And probably I should have experimented more when I was in 20s. So probably this is what I'll tell if I meet myself when I was 20 years.

Nathan Latka

18:54Experiment more Hiver launched back in 2011 broke a million dollar run rate in 2018 broke 4,000,000 run rate last year. And this year on track to break a $10,000,000 run rate growing nicely. 1,700 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 Workplace Marketplace. Just They raised a 22,000,000 series B, sold around 10% of the business, 120 on the team as

19:20they look to scale, 102% net dollar retention. So it's a sticky tool as they look to continue to build and grow and double down on marketing and sales. Nitesh, thanks for taking us to the top.

Nitesh Nandy

19:30>> Thank you, Nathan. Thanks for your time.

Nathan Latka

19:34One 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 one

19:58p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two p. M. Central to make sure you don't miss any of that. Make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's

20:20an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what

20:41people are saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to

20:51let me know what you

Nitesh Nandy

20:52>> thought about this episode and

Nathan Latka

20:53if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.