Indicio Technologies Revenue, Valuation & Funding (2024)

[00:00] Guys, indicio.com, he raised a $130,000 early on in the company back in 2018, 2017, selling 10% of the business. That investor then wanted to become CEO, took him in the wrong direction, and then he had Frans to do the hard work of raising $400,000 of more capital at a 2,000,000 valuation, spending 50% of that next round effectively buy out the first investor. Then he started cranking. He got a partnership lined up. They're now doing about $200,000 [00:23] a year in revenue or $17,000 a month, up from 6,000 a month a year ago. They just closed a well, last year, they closed a series a of $400,000 at a 7,500,000 valuation on the back of the excitement from his new partnership. Hey, folks. My guest today is Frans Andersen. Six years ago, he worked at an OEM evaluating their forecast accuracy, and he realized that a simple statistical model could outperform not only the internal forecast, but [00:47] also forecast from international experts by at least 50%. Later on, he tried to find software that apply these models suited for nonstatisticians. He found nothing. That's when he teamed up with his friends to build the best forecasting platform for nonstatisticians. Today, his technology is applied within automotive construction and finance companies, and it's called indicio.com. Franz, you ready to take us to the top? [01:10] >> Yeah. Pleasure to be here. [01:11] You bet. So why automotive construction and finance to start and describe how they use you? [01:17] >> Yeah. So it all started in an automotive company. [01:24] >> So that's why it creates a lot of value for them because with more accurate market and sales forecasts, they can use this information to control the whole company, to adapt their global production prior to, for example, a recession. So [01:47] Mhmm. Forecasting access better? Mean, I think when people think about sales and forecasting, they, you know, think CRM, they think Salesforce. You know mean? Help us understand how you're different. [01:55] >> So there's a lot of forecasting going on in in the big enterprises today. The majority of the forecasting is done in a planning software or in a CRM. And the problem with those forecasts is that they do not consider what is happening in the market or the economy. And this was really visual during the pandemic, for example, where a lot of the order volumes were dropping, really quick while the forecasts were still pointing upwards. So that [02:30] >> that's kind of the problem with the current forecasting that [02:35] And help me understand how you price the technology. Right? Is this a flat fee? And if so, what are what's the average company paying you per month to use the tech? [02:43] >> So it's yeah. We're a SaaS company, so it's a subscription based. We're charging for for the industrial companies €4,000 per site and or for the first site and for additional sites, it's a €3,000 per month. [03:03] >> And for the financial sector, the pricing is based upon number of users. So it's roughly 200,000 US dollars per user per year. [03:21] 200,000 per per user per year? [03:25] >> Two sorry. 20,000. I'm trying to convert. [03:30] Okay. 20, 20,000 dollars per seat per year for the financial sector. And and then it's in our finance and automotive. Those are your two biggest ones, our industrial and finance? [03:40] >> Yeah. That's that's the two biggest ones. [03:42] Okay. Interesting. And I guess what's the breakdown? So if you look at total revenue last year, what percent was finance versus industrial? [03:50] >> So finance, they were selling through a partnership. So we signed a partnership agreement for roughly a year ago. We spent the spring to teach their whole sales organization, as well as their support and customer success. And during the summer, they started to hold webinars upon our technology. And during August, they were converting the first paying client. So this is the segment that is, I mean, increasing exponentially, because this partner has a large global sales organization. Mhmm. [04:33] >> And so I think that we're gonna be fifty fifty split between finance and industrial in couple of months from now. [04:44] Oh, 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 [05:08] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:32] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna 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 [05:54] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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 [06:19] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but [06:41] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation 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. Alright. Let's jump back into [07:08] the interview. And why go through a partnership model? I mean and what's the sort of kickback? You've gotta incentivize their sales reps to actually sell your tool. Do you split it fifty fifty or what's the rough range of how you split the revenue? [07:19] >> Yep. So we split it fifty fifty, which is giving a lot, away, but they're also taking the whole distribution. So they're taking the sales, the customer success, the onboarding, and the support. They have [07:35] Who builds the customer though? Do you own the customer relationship once they sell the customer? [07:40] >> No. They own the customer. [07:43] Interesting. And so, I mean, how do you this is like, you know, you you wanna ride the whale until the whale sort of, like, bites back. Right? How do you make sure that they keep using you long term versus someone else comes and says, hey. We'll give you 60%. You know, cancel cancel your partnership with indicio. [08:02] >> That that's a good one. Our technology is so cutting edge. So the technology actually helps them to sell their own product and services to reach a completely new target audience. So I think it's kind of the opposite. We are sitting with kind of the power. We have gave them an exclusive exclusivity for for one year and which is renewed on a yearly basis. So we can [08:37] Franz, if you look at the total customer base today, let's just look at the industrials, the the customers that you own directly. How many customers are paying you on the industrial side today? [08:47] >> There's a handful, I would say. [08:50] >> So it's still early stage. [08:52] Like, a dozen? [08:52] >> Yeah. [08:54] Yeah. Okay. Something like 12. And then on the partnership side, is it also like a dozen or about how many have signed up on the finance side? [09:03] >> It's it's half of that. So I think roughly six clients, but it's growing. They're adding I don't know. [09:13] So you have 18 total customers. Six are finance, 12 are industrials. [09:17] >> That's correct. [09:20] Okay. Interesting. So I guess now that we understand sort of how many customers you have and what the product does, put this all in a a timeline for us. When did you write the first line of code for the platform? [09:31] >> That was back in 2017. [09:38] 2017. Okay. And guess walk me through how you got your first customer. Do you remember? [09:45] >> Yeah. So that was a bank. And he I don't know if you read Crossing the Chasm, the book. [09:54] Of course, Geoffrey Moore, yep. [09:55] >> Yeah, talking about the visionary people that you should attract in the beginning. And he was a truly visionary. He shared our vision and he gave us so much good feedback upon how to to create a lot of value for the end user. [10:14] And is he still paying today? [10:17] >> No. [10:18] Come on, Frans. [10:19] What happened? What happened? [10:22] >> He was getting a new manager with budget restriction, [10:29] >> and we didn't have the partnership with a financial data vendor back then, and that was he really needed that to to get the data integrated into the platform in a smooth way. [10:42] Mhmm. [10:42] >> Mhmm. So that dialogue is actually up and running now again to to get him as a user. [10:50] And so your first user was financial. Going back to industrials for a second, you mentioned 12 industrial customers. How many sites do those 12 industrial customers have on your platform today? [11:02] >> So it takes roughly one to two year to get to get it from one site to to the next. [11:13] So most of them have one site with you? [11:16] >> Yeah. That's correct. And we have a couple that's just expanding. [11:20] Okay. So if you charge you told us earlier 4,000 per site times 12 customers. I mean, can we can we do that math? You're doing about $50,000 a month in revenue from that part of the business? [11:31] >> Not we we have iterated the pricing, over time. So the pricing that I told you is the latest pricing. So we have clients with the older contracts. So the total revenue is roughly, I would say, 200, 210,000 dollars. [11:53] Per year right now? [11:54] >> Yeah. [11:55] Okay. So 200,000 per year. That means you're doing about $17,000 per month right now. And what were you doing exactly one year ago? [12:06] >> Half or not even half of that, I would say. [12:10] So it's maybe, like, six thousand dollars a month a year ago. Now you're at $17,000 a month, something like that. Okay. And I guess tell me more about the team. You've been working on this since 2017, so you're now almost six years in. How many folks are full time today? [12:24] >> So we are eight people today. We are developer heavy. This technology is yeah. It's been taking forever to build. [12:33] How many engineers, Ron? [12:36] >> It's [12:40] >> six six engineers. [12:43] And do you also write code? [12:45] >> No. Not any longer. I did in the beginning. [12:48] Okay. Are you the only founder? [12:51] >> No. We are three three founders. [12:54] Founders. Okay. Were you guys nice to each other at the beginning? You split equity evenly, 33% each? [13:00] >> We the first two, we split it at fifty fifty, and the third one was coming in on 10%. [13:10] Okay. How many years late did the third one join? [13:15] >> I think it was a year later or so. [13:18] Oh, okay. Okay. [13:19] So it's sort like, 40, 40, you know, 20, something like that. You know, '45, 45, 10, something like that right now. [13:25] So you've bootstrapped today. You haven't sold anything to investors? [13:30] >> We have taken in some capital couple of times. [13:38] >> First round was really rough. [13:40] Was that? What year? [13:42] >> The first round, could it have been 2018 or '7? [13:49] And how much did you raise then? [13:54] >> 130,000 US dollars. [13:57] And why was it rough? [13:59] >> We we were choosing between getting investments from a couple of business angels or one. And we thought that, oh, it's gonna be so much easier with a contact and just just having one. But he he had his own plan, upon becoming the CEO of the company and trying to push us into to take more of his money and [14:28] Oh, so you he a part of him putting in the money, you guys had to make him CEO? [14:33] >> Yeah. That that's what he wanted. In the in the end, we we bought him out. And Mhmm. [14:39] Well, how much equity did he buy when he put in a $130,000? [14:43] >> 10%, I think. [14:46] Okay. So you raised it like a 1.1, 1.2, $1,300,000 valuation. [14:52] Okay. It's not easy to rip somebody out. Right? To the extent you can share, I mean, how did you get rid of, you know, effectively a founder that put money in that wasn't working anymore? [15:03] >> So we we bought him out, and he he was getting a good return. I think it was 50% return or something like that. [15:14] You bought him out for, like, $200,000, something like that? [15:20] >> Yeah. I think it was something like that. [15:22] Okay. And where did you get that money from? [15:25] >> From other investors. So it's So [15:28] what was what was the next round of money you raised then after him? [15:34] >> Roughly around or a little bit more than 2,000,000 in valuation. [15:42] What year? [15:44] >> Oh, I I need to look at the cap table. It was one year later. [15:49] >> The 2019? [15:50] Yeah. Okay. So you raised and how much did you raise? [15:58] >> It was a 10% dilution. [16:02] So The 200,000? [16:04] >> Yep. [16:05] Okay. And and a bunch of that money went to buying up the first investor, basically? [16:12] >> No. That was on top. So 200,000 plus the 200,000 for the first investor. [16:20] Well, Well, I thought you said the first investor put in about a 130,000. [16:23] >> Yeah. Yeah. But we needed to buy him out to get him a good return. [16:28] My question is the second 200 the 200,000 you raised in 2019, the majority of that money go towards buying out the first investor? [16:37] >> No. That was an additional 200,000. [16:41] So you raised 400,000 at a 2,000,000 valuation? [16:44] >> Yeah. [16:45] Oh, I see. Okay. Got it. And then have you raised any since then? [16:50] >> Yeah. We have. I don't have all the details of all the rounds that we have been doing. The latest one was with a valuation of [17:02] >> 7,500,000 US dollars. [17:07] Was this last year? [17:09] >> Yeah. [17:10] And how much did [17:11] you raise? [17:12] >> It was even this year. [17:16] What do you mean this year? [17:17] It's been four days [17:18] >> Sorry. In the 2022. [17:21] And how much did you raise? [17:26] >> We raised it was just a small round for the current investors. Think it was 400,000. [17:36] And how did you convince them to give you a 7,500,000 valuation wherein you were doing about $6,000 a month in revenue at the time? [17:43] >> Due to the partnership [17:46] >> potential. [17:47] I see. You use the partnership, right, and future projections to go get a higher valuation to raise the extra money. [17:54] >> Yep. [17:55] That's great. Now, there anything looking back in terms of how you raised the money, is there anything you would change? [18:02] >> Yeah. There's a lot. So [18:07] >> during the Christmas holiday, I was watching the the playlist on Netflix. I don't know if you've seen it. [18:14] >> It's about how Spotify was founded, and they did it super quick, I mean, compared to us. That's been taking, like, five years. And I think to raise a big round in the beginning, building the dream team of everyone that you need to both build a product, but selling it and getting partnerships, that's where you need Mhmm. The real experience. [18:46] >> So that's something that I would change. [18:50] Well, Franz, you've got the new partnership cranking. We're excited to see what happens next. We're out of time today, though. Let's wrap up with the famous five. Number one, favorite business book. [18:59] >> Crossing the Chasm. [19:00] Number two, is there a CEO you're following or studying? [19:09] >> Oh, that was a good one. No. Not really. [19:13] K. Number three. What's your favorite online tool for building indicio? [19:19] >> Probably GitHub. [19:20] GitHub. Yep. Number four. How many hours of sleep do you get every night? [19:30] >> I just have small kids for the moment, so it's not much sleep. Normally, I would say seven hours, but now it could be down to three. [19:39] So married. How many kids? [19:41] >> Two kids. [19:42] Two kids. And how old are you? [19:44] >> I'm 36. [19:46] 36. [19:47] Last question. Something you wish you knew when you were 20. [19:55] >> To test to test out to start a company. Test out your your ideas. Just just do it as quick as possible. Don't wait for the right idea to come. Just do it. [20:06] Guys, indicio.com, he raised a $130,000 early on in the company back in 2018, 2017, selling 10% of the business. That investor then wanna become CEO, took him in the wrong direction, and then he had Frans to do the hard work of raising $400,000 of more capital at a 2,000,000 valuation, spending 50% of that next round effectively buy out the first investor. Then he started cranking. He got a partnership lined up. They're now doing about $200,000 a [20:30] year in revenue or $17,000 a month, up from 6,000 a month a year ago. They just closed a well, last year, they closed a series a of $400,000 at a 7,500,000 valuation on the back of the excitement from his new partnership. We will see what happens next. Franz, thanks for taking us to the top. [20:46] >> Likewise. Thank you so much. [20:48] One 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, 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, 1PM Central. [21:14] Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 an acquisition, a big fundraise, [21:36] 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 people are saying. Sign up [21:57] 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 let me know what you thought about this episode and if 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 [22:17] 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.