How Holded CEO Javi Fondevila grew Holded to $6M revenue and 9K customers in 2021.

hello everyone my guest today is javi fonda villa he was born and raised in barcelona spain has been and has been creating his own ventures over the last 13 years at the age of 20 he founded a retail company and raised up to 100 employees in 14 stores across spain later he co-founded holded a business operating system for small businesses to manage sales finance operations and hr and one single beautiful platform javi you ready to take us to the top yeah thank you all right so this is great so it sounds like you're serving small business owners help us understand as holded a pure play sas company uh it is until today yeah okay what's happening today well actually as you know there's a big trend of sas companies moving beyond being only software and entering into other type of services in our product actually there's a lot of things happening around financial services so we are about to deploy our first let's say this is around this which is all the payments together with stripe payment initiation um to start offering this type of of services to our customers and do you see this being a meaningful revenue stream for you in other words you know over the past 12 months how much transaction volume have small businesses put through holded so in 2019 we had a gmb of almost 4 billion euros and help us understand how that works for people that for people that don't use the tool how does a business owner use you so the the basic use case is it's a this type of small businesses normally they tend to digitalize the financial management also invoicing accounting so this is the base use case that we're covering and this is where we have 60 to 70 of the features but then from there we help them to digitalize other areas of the business that normally will keep on a spreadsheet or on paper or you know like these people doesn't really have a manager on hr so nobody's thinking on buying a dedicated hr tool that's right so you're helping them with invoicing accounting managing their team project management inventory management and even crm yeah somehow everything is connected now so we're not pretending to be salesforce we're just giving you the right features to our customers to be able to track sales and not without really going to a dedicated crm that is actually something they don't really need and javi how what do customers pay you on average per month today uh today is around 40 years per month okay and when did you launch the company what year back in 2016 we started with hold it and we launched the first version on january 2017 so we've been a little bit more than three years and a half in the market and who is we what are your co-founders so my co-founder bernat so i met him on facebook and he has an engineer background well i mean he's been coding since he was seven years old and we had a match on social media about like we were you know wanting to develop a really similar project and and we were like really complementary profiles so we met and and we started with hollet do you guys split the equity 50 50 yeah wow very fair are you guys hobby the only ones on your cap table today or have you raised outside capital no we've actually raised three rounds until today so we have a group of business angels that basically helped us on on starting with the project and then we onboarded already two busies how much total have you raised uh seven million euros today okay seven million to date and what walk me through sort of how you got your first so you know you find your co-founder on facebook you guys launch your mvp in 2017 how did you get your first 100 customers uh well we've used uh online channels now so since the very beginning we want to build an evolution of the year to be mandatory things to make the whole sir the whole process of purchasing an implementation cell service so we needed to actually acquire customers that were already online so we started using mostly google search and social ads and and we've been scaling the payday channel until today that's still our number one channel how much did you spend last month on ads uh around 250k and how many new customers like how much new monthly recurring revenue do you get from that spend uh almost 20k in that new mrr that's great those economics work nicely yeah actually we've been playing around a lot uh during the last nine months we've created the growth team which until last year we were super focused only on product development so most of our team was engineers and customer success to understand the customer feedback uh science summer 2019 we started to think about hey we need to become also professional on user acquisition no and so we've built our growth team we made we made really good hires here and we've done really good projects behind to be like more efficient into our acquisition machine so what would you say your average cac is to get a new 47 a month customer uh so now he's around 300 euros okay three so 370 us dollars something like that and besides paid ads are there any other paid channels you're testing like dedicated emails or branded content sponsorships anything like that well there's multiple projects uh going on now but i can say that today we're living out of the paydays channel and the word of mouth slash virality which represents 40 percent of our acquisition no because we asked customers how did you met us because the attribution is really hard no so we have multiple attribution systems but in the end what we rely is on what our customers are telling us interesting and so this is how you got your first i mean you knew early on that it was going to be paid ads so that's how you got your first hundred customers used online channels how many customers are you serving now today three years after launch uh almost nine thousand okay nine thousand and and would you where do you think you'll experiment in the future i mean how do you go from nine thousand customers to twenty thousand customers well i think so in our case we're going to the really micro segment also companies between 1 and 20 employees when we are have customers beyond that no but this is our our focus now we're talking that in spain france or other markets this is represents almost 95 of the economy so the target audience is massive the main challenge for a company like ours is how do you reach this audience at the speed and the cost that you want no um so the paydays channel helped us to make an acquisition machine really quick and reach these customers who are really in the high intent demand part of the funnel and now we are deploying other channels that are helping us to reach other types of customers so for example the partners channel we're partnering with accounting firms in one site and agencies in another site and to be able to reach this type of customer who's not really actively looking for something and they are relying this decision into a partner knowing to someone they they trust um from there we are also adding other product virality elements that will help us to to reach other customers so just to put you an example on the possibilities we have um our 9 000 subscribers they have 1.4 million unique businesses in their contacts in hold it which means 1.4 1.4 million unique businesses which means that through viral tools we can reach and those businesses most of them their potential customers are holded so what we're doing now is to analyze and to develop features that allows us to reach those customers through our existing customers so under the umbrella of the product virality so your 9 000 subscribers for example they all have their crms connected what you're saying is you add up all their crms you have potential to reach 1.4 million smbs exactly i see i see interesting okay and so uh 9 000 customers paying on average 47 per month what's monthly recurring revenue today so we are at uh almost i think four million dollars so doing the conversion but where the is that euro or yours or usd so 3.4 million euros 3.4 annually yeah ar okay got it so yeah about four million dollar run rate or about caught 340 000 a month in mrr walk me through the decision to launch this new financial technology product you know percent of gmv yeah sure so it's a as i said no there's a big trend on going in this direction so in the end with this small business segment there's a limit on the how much money you can charge them no they have limited resources so and we don't want to change the game we don't want to go up in the market so at some point you need to find new revenue channels to monetize better your customer base but in the end it's also because we believe this is a also giving a lot of value to our customers so in the first stage of this deployment we're not that thinking that much about making money out of that but to give more value and to concentrate more actions into the platform now as i said there's already the invoices are already issued in our platform the invoices are already received into our platform and what we want is to be also part of the process of the payment both both from the collection and the payment side so you don't need to leave the platform to do that and i'll put you an example so when a traditional smb they tend to have at least two or more banks so once you want to pay your employees or you want to pay a bill you necessarily need to leave the platform go to one of those banks and initiate the payment by copying all the bank information from the platform also we want to avoid this stock process and be able to do that directly from the platform directly from the invoice and actually you can automate and start programming when you want...