How Inbenta CEO Amanda Pelton grew Inbenta to $53.3M revenue and 300 customers in 2024.

hello everyone my guest today is jordy torres he founded in benta in 2005 to help clients improve online relationships with their customers using technologies like artificial intelligence and natural language processing the first beta version of the tool was released in 2010 thanks to a team composed of linguists software architects and customer care specialists in 2012 jordy moved to california to continue to grow in venta there jordy you ready to take us to the top yeah absolutely that's uh that description sounds familiar to me very good so talk to me about the company is it a pure place sas company is a pure player ai nlp company yes okay but the way you bill people it's monthly recurring it's software as a service it suffers a service most of our customers pay yearly okay great we have a budget for the whole year and that's a yearly subscription and i want to get into the product here in a second but first on average just to get a sense of your if your small business medium business or enterprise what's the average customer paying you per year for access to the tech most of our customers are medium to large enterprises uh average would be around the thirty thousand thousand dollars per year okay that's where we are now and then tell us about the tech what are they paying for well basically the value that they get out of inventor is the capacity to answer the questions of the customers of their customers online and that way basically they alleviate their support team to fro from having to manually deal for for repetitive questions from their customers so this is a tool where i click i'm using some software tool and i really get stuck i need support i click their live chat i ask a question and they said hey before you talk to a live person do any of these articles answer the question you just typed in that kind of thing that kind of thing that's right it's kind of different flavors there's like the classical conversational chat bot but also we have more search search inspired kind of applications where you you have a search box you search your you ask your question as a search request you get several answers that you would click on one of these articles just as you described and when did you launch the company what year so uh i started a company a long time ago that was 2005 as you described at the beginning uh it was a convoluted longer story we started more like a consulting business a professional services company so it wasn't until 2010 very much so we had that idea of of building a software that would basically understand human language and give relevant answers and what have you scaled to today in terms of total customers we have today around 300 customers uh in europe north america uh south america um australia and japan this is the market where we are now and have you kind of done this bootstrapped or have you raised capital good question um for many years the company was bootstrapped particularly during the time that we were a consulting business and we were self-financed that consulting business actually allowed us to finance the first very first version of the of the of the summer so we didn't uh raise uh what we call our series a investment until 2014 so way so how much raised to date uh today it is uh 26 million pretty much at this point three or two 26. 26 million 26 got it and did you do most of this was equity or did you convertible notes or debt um we used convertible node as intermediate uh mechanisms to actually get some of the of the equity invested so essentially it's equity a little during the time there were um when was the last time jordy that used a convertible note uh last year okay and strategically help us understand why it made sense at the time uh basically regulations that some of our customers that out of the country uh have so they they had to to have an investment in two phases first uh convertible node that was converted a few months later but that was more uh an approval process and regulation and an actual and strategic decision oh so some of your investors are your customers no well you know we have entity entity though como is one of the investors today and entity communications is our customers so um officially there are two different companies although all parties right who who couldn't just put in the money directly who had to go on a convertible note and because of regulation they had to wait for it to convert to equity scale capital uh investor out of chile and why was that why does the regulation prevent that particular uh investor is is partially funded by a government government organization that takes longer uh to prove some of the some of the proceedings and that that we use this this mechanism got it and uh talk to me about the team today how many folks we are around 165 people today and where's everyone based [Music] well most of the employees that we have are based still where a company was created in barcelona because there we have our r d our consulting teams and then we have around 20 people in the us uh so barcelona and remote correct that's that's great and then you know i want to understand more about growth here so i mean can i take 300 customers that you said earlier times the other figure you gave earlier which is a 30 000 acv that would put you right now about 750 grand a month in terms of monthly recurring revenue is that about right our so the average if you take the average uh yeah last year's revenue was around uh 14 million but what run rate did you end at in december 2018 14 you ended at a 14 million so you're at what like 14 2 or 3 today something like that correct yeah yeah uh and then take me back a year before that where were you a year before that was around 10 million okay good so you basically went from kind of 830 grand a month to kind of 1.1 million a month over the span of 12 months your fast computer dividing by 12 man that's good man okay good so it's good did most that growth come from though new customer additions or expansion revenue on older customers uh last year we had a good uh expansion on our existing customers okay um so it was basically house and house oh good so if you look at your full growth the extra 400 grand you added in arr and mrr you're saying 50 was upsell 50 was new additions that is correct that's interesting okay but break down you know expansion revenue can be a beautiful thing especially if it's covering up churn revenue on that same cohort what is your what does your gross revenue churn look like annually and then and then what are you upselling to fill the gap we have this point uh what we call a negative churn so you know in other words where our ab sales uh they cover your turn they cover the return today like totally get that i'm asking you to peel back the onion there so so what percent so if you have a net negative churn obviously what drives that negative is up you have a lot of upsells but if you ignore upsells which just gross revenue churn annually oh that will be for the last year that will be around forty percent forty percent gross revenue churn yes and what was expansion over the same period [Music] oh i mean the so forty percent let's say twenty percent was expansion twenty percent of it was new new accounts does that make sense so the forty percent growth is half half divided between uh new accounts uh and existing incomes yeah sorry i'm trying to get it what is your gross revenue churn over the past 12 months gross revenue churn turn right yeah that's around five percent god i was gonna say there's no way it was forty percent you wouldn't have 26 million dollars raised five percent gross revenue churn annually and then that same that same cohort that signed up a year ago what are you expanding them by like 10 20 or what's the number the expansion of the existing customers yep so that the let's say the the growth in existing accounts yep right sometimes references negative churn that will be around twenty percent yeah uh and just to be clear you can still have growth in a historical cohort but still have churn and not have net negative churns so the reason i have that number see if you have 20 expansion and right and you have 5 gross revenue churn that means you essentially have net negative 15 or said differently net revenue retention of 115 so okay five is a churn yep 25 is the increase in the existing accounts 20 is the new newer camps yep perfect yeah so you have you have 120 you basically have 120 net revenue retention correct yeah which also is set as net negative churn exactly i i'm sorry i heard at least five different definitions of churn everyone has by the way you're not wrong everyone has a different definition that's why i always ask yeah uh sometimes esther said what is your turn you say something like five percent say oh that's too bad we're expecting a negative number so well well you asked me about churn not turn plus expansion expansion so no no no this is a healthy business five percent churn 25 percent expansion 120 net revenue retention the 25 expansion help me understand what pricing axes are your sales team up selling against to get the 25 expansion so a couple of things one is just usage so some of our customers move international that creates more sessions more usage of our technology so usage based off what it's location based uh it's a sessions what we call sessions so you go to this our applications as a final customer you ask a question you start a session we charge at the end of the day based on tiers based on these sessions got it now you know moving to another territory we'll add more traffic...