How Cercle X Reached $12.1M Annual Revenue with 1,000 Customers in Under 24 Months (Interview with CEO Vishnu Vardhaan)

Host Intro and Business Overview

Nathan Latka

00:00Guys, cerclex.com. His application processed in December 20. So last month, over 9,000 metric tons of waste at an average value of $500 per metric ton. That's $4,500,000 of GMV throwing through his application. He takes between 1 to 5% of that. So 50,000 to $200,000 per month comes from that part of the business. His other part of business is pure SaaS, which is in more even more impressive. Hey, folks. My guest today is Vishnu Vardhaan. He is leading cerclex,

00:29one of the first web three based waste management companies that enable brands to manage their industrial and post consumer waste quicker and with a 100% traceability and transparency, all through their suite of blockchain enabled SaaS solutions. Vishnu, you ready to take us to the top?

Guest Welcome and Podcast Background

Vishnu Vardhaan

00:44>> Thank you so much, Nathan. I've I've been a big follower of yours for a long, long time.

Nathan Latka

00:50Oh, good. So

Vishnu Vardhaan

00:53>> it's it's an honor to be a part of this podcast.

What Is Waste Management for Brands

Nathan Latka

00:56Alright. Well, help. I don't wanna lose anybody. When people hear waste management, they think about the trash they throw out of their house. I don't think this is what that is what you're building. So tell us what do you mean by waste management?

Vishnu Vardhaan

01:07>> This waste is predominantly the waste of brands. So brands have a lot of ways that they generated their factories and, they need to send that out because, they are under various norms like, environmental social governance norms and so on. And, in every legislation there's a lot of rules and regulations for managing their waste properly. That is one thing that we are handling and yes, secondly, a lot of brands are under extended producer responsibility, responsibility rules and

01:41>> regulations. So they have to mandatorily take back waste from consumers like you and me and send it for recycling. That is something that we help them do as well.

Nathan Latka

01:54So this would be like, you know, Walmart, for example, creates, you know, 10,000 cardboard boxes every week in the back of their you know, the back of the Walmart building. They might use your tool for what's called IWM, industrial waste management. It helps them send pickup requests with a single swipe, track vehicles that are coming to pick up the boxes, meet ESG requirements, things like that.

Vishnu Vardhaan

02:17>> Exactly. Exactly. So we are like a, Uber for waste. So you can just swipe up and raise a pickup request. Within thirty to forty five minutes, one of our executives will come and pick up your waste and take it for instance.

How the Platform Works: Uber for Waste

Nathan Latka

02:32And these brands like Walmart pay you directly a SaaS fee?

Vishnu Vardhaan

02:37>> Yes. They pay for the software. On top of that, they also pay something for those service that they avail.

Nathan Latka

02:44Mhmm. So, I mean, like, I see I look at your model, I look at the website. Did you just stick Web three point in your name to increase your valuation?

Vishnu Vardhaan

02:53>> No. No. Actually, Web three zero is, not something that we stuck, to increase our valuation. First thing, for the first two years of the company, we spent, just building the network because ultimately waste needs to go for recycling to be able to build a circular economy. And, I can't build software on top of a network which is not present. So, first two years we focused on building this network. And then because brands are increasingly under the

Nathan Latka

03:25Hold on. Hold on. Hold on. While you're building the network, is this the scrap market concept? Is that how you sort of creatively built the network to start?

Vishnu Vardhaan

03:33>> Yes. Exactly. So waste is a lot of value to a lot of people. And, the people who handle waste are, people that we call as in India, rag pickers, traders, aggregators, and the network of recyclers as well. So I built this network and then on top of that we plugged in blockchain and web three because it will give us 100% traceability and transparency over the complete journey of the waste. So that was the reason that we

04:04>> did it.

Nathan Latka

04:05That's interesting. Okay. So when did I guess put us on a timeline for me. When did you launch or sorry. When did you write the first line of code for the platform?

Company Timeline: First Code and Launch

Vishnu Vardhaan

04:13>> Twenty twenty September was when we, wrote the first line of code. Okay. And we launched software in 2021.

Nathan Latka

04:21And I guess in 2021, how many people downloaded this app, right, for the scrap scrap market?

Scrap Market App: Downloads and Usage

Vishnu Vardhaan

04:30>> Over the last two years, from 2021 to to date, we have over 45,000 people,

04:38>> from, download this app and use them use it.

Nathan Latka

04:43Oh, 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

05:06your 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

05:31get 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

05:53not 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

06:18going 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

06:40if 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

07:06the interview. What what does use mean? I mean, that's a very it can mean a lot of things.

Vishnu Vardhaan

07:13>> They they use it to, showcase what, scrap they have. They can buy and sell scrap on the same platform. They can bid for waste, which is coming from brands. So as soon as a pickup request is raised from a brand, the request goes to a set of, recyclers or traders closest to the brand and they can bid for the waste and, and then if the bid gets accepted, they can go and pick up the waste. So

Nathan Latka

07:42How is this different than, like, Facebook Marketplace? You know, everyone just lists their shit on Facebook Marketplace. It's basically their waste. You know, it's their old couch. And then people can go bid on the couch, and then they go pick up the couch if they want it. I mean, isn't this very similar except it's like, you know, pipe cuttings and, you know, copper cathodes, things like that?

Vishnu Vardhaan

08:01>> Brands produce a lot of waste. In fact, brands in their own factories or under their EPR produce millions of KGs of waste. So that is what we focus on, not the

Nathan Latka

08:14Oh, I see. Yeah.

Vishnu Vardhaan

08:16>> The standalone waste that you may have in your

Nathan Latka

08:19So your pure B2B. It's only waste from companies.

Vishnu Vardhaan

08:23>> Yes. Only waste from companies.

Nathan Latka

08:26Okay. How many people to 45,000 downloads actually bought or sold a scrap via the app over the all time?

Transaction Volume and GMV

Vishnu Vardhaan

08:34>> Over 25,000 of them have done at least one transaction.

Nathan Latka

08:39That's actually a pretty good activation rate.

Vishnu Vardhaan

08:42>> It is. It is. It is. And, a lot of the other people come basically to check the market prices of scrap on a daily basis. It's like, it's also a commodity, so it keeps changing across India. So, that is what they do. And

Nathan Latka

08:57By the way, it's very late where you are. You're it's like 3AM, isn't it?

Vishnu Vardhaan

09:01>> Yes. Yes. Yes. It's, yeah.

Nathan Latka

09:04Thank you for being either up early or up late with us. We appreciate it.

Vishnu Vardhaan

09:08>> Thank you. Thank you so much, Nathan. I've been a big fan, so it's the least that we could do.

Nathan Latka

09:13Well, I appreciate that. Okay. So this is impressive. So over 50% of all time downloads have actually done a transaction on the app. And I guess quantify that for us, Vishnu, in terms of dollar or or, you know, dollars, right, or or currency. What was the total volume last year?

Vishnu Vardhaan

09:29>> Last year was close to, 6,000 metric tons per month on a monthly basis. So we channelize a lot of this waste across India. And this year, this year we are closing at close to 9,000 metric tons on a monthly basis.

Nathan Latka

09:50That's that's 9,000 metric tons bought or sold through your your scrap market app?

Vishnu Vardhaan

09:56>> Yes. Yes. Yes.

Nathan Latka

09:57Interesting. And what's the average dollar value of those 9,000 metric tons per month?

Vishnu Vardhaan

10:05>> Each each metric ton on average is

10:10>> close to $500.

Nathan Latka

10:14Okay. Interesting. Interesting. So, I mean, 500 times 9,000. I mean, that's $4,500,000 of waste volume going through the app monthly.

Vishnu Vardhaan

10:23>> Yes. Yes. So, December, the waste volumes was close to, 3,000,000 December 2022. So that's the amount of waste that was channelized through the app just on just in December.

Revenue Model: SaaS vs Transaction Fees

Nathan Latka

10:39So do you take a cut of that? I mean, do you make money?

Vishnu Vardhaan

10:42>> Yeah. So we charge for the software and when and then we take a percentage of the transaction as well.

Nathan Latka

10:49Like 1% or 5%?

Vishnu Vardhaan

10:52>> It depends on the scrap prices at the end of the day because it's all a demand and supply game. So our percentages keep varying based on how much we can supply based on the demand. It depends from one to 5%. Yes.

Nathan Latka

11:10Okay. On the low end, 1% on 4,500,000 a month or 9,000 metric tons per month would be like $45,000 a month in revenue or as high as 5%, which would be $225,000 a month in revenue. Right?

Vishnu Vardhaan

11:24>> Exactly. Yes.

Nathan Latka

11:25That's really impressive. And what percent of your total revenue is the percent of GMV versus the pure software?

Vishnu Vardhaan

11:34>> Right now, a lot of so this is the scrap market and apps associated with it is one side of the business model. The other side is pure play software that can enable a brand to measure what is the waste incoming and what is the amount of waste which is recycled. They can purchase recycled raw materials from the same app itself. That has gross profit margins close to 75 to 85%.

Nathan Latka

12:05But what's the breakdown? So the pure play software versus scrap market revenue, is it fifty fifty?

Pricing and Customer Breakdown

Vishnu Vardhaan

12:12>> Pure play software, because now we have the other softwares as well, close to 60% and the remaining 40% is made up with all the transaction fees and so on.

Nathan Latka

12:24Wow. Okay. Looking just at the pure play software stuff, what a brand's pay on average for that per month?

Vishnu Vardhaan

12:31>> It depends on the number of, facilities that they put into, the software. So typically, we charge anywhere between $399 to $497 for every single location per month.

Nathan Latka

12:46Mhmm. Okay. Well, I mean, give me a general range. Do most people average two locations or four locations or what?

Vishnu Vardhaan

12:54>> We work with a lot of MNCs, multinational companies, CPG companies, consumer packaged goods companies. India is a major base for them, so they average close to at least three to four factories across India. Okay.

Nathan Latka

13:13So that'd be like 1,200 to $1,600 per month on average.

Vishnu Vardhaan

13:17>> Yes. Then, yes. So close to, there are close to 4,500 of these big brands sitting in India doing manufacturing. So that's our target.

Nathan Latka

13:30And how, so how many customers do you have today?

Customer Count and Average Contract Value

Vishnu Vardhaan

13:35>> We have close to thousand. These are small medium companies as well. And we are scaling that up as we speak.

Nathan Latka

13:44But they're all paying about $1,200 a month?

Vishnu Vardhaan

13:48>> Some of them are paying 1,200, some of them are paying even more than that because, of our other softwares that we sell to them.

Nathan Latka

13:55Okay. But they're all paying at least 1,200 per month?

Vishnu Vardhaan

13:59>> No. The average range is between $800 to, $1,200 on average, because these companies have one or two facilities.

Nathan Latka

14:10I mean, but I mean, Vishnu, even even if it's $800 a month times a thousand customers, I mean, that's $800,000 a month right there in revenue, right?

Vishnu Vardhaan

14:18>> Yes.

Nathan Latka

14:19And then you add on top of that another 50 to 200,000 from the scrap market stuff. I mean, you're approaching $1,000,000 a month in revenue.

Vishnu Vardhaan

14:26>> Yes. We do December, we closed at $1,010,000.

Nathan Latka

14:33That's super cool. Congratulations.

Vishnu Vardhaan

14:35>> Thank you. Thank you so much. Thank you.

Nathan Latka

14:37Alright. I love this story. Talk to me more about the team. How many folks are full time today?

Vishnu Vardhaan

14:43>> We have 42 people full time and our CTO is from Ghana. He settled in India to work with us on this project. We have people from Syria, a lot of other places as well. They believe that, waste management is something which is really key to mitigating climate change. We have a cool team sitting out of the Indian office and, and then scaling this up. This is software that we built initially for India because India has a

15:16>> proper testing market. But if we can prove it in India, which we have done, we can scale this up, overseas. We are now in The US and so on.

Nathan Latka

15:26And if you're doing about 1,000,000 a month today in revenue, where were you doing exactly one year ago?

Year-Over-Year Revenue Growth

Vishnu Vardhaan

15:31>> One year ago, one by tenth of this was what we were doing.

Nathan Latka

15:36So about a $100,000 a month?

Vishnu Vardhaan

15:38>> Yes. $100,000.

Nathan Latka

15:39Wow. I mean, I think what's most impressive to me about the story really is just the growth. Right? I mean, you launched in 2020, you said. Right?

Vishnu Vardhaan

15:46>> Yes.

Nathan Latka

15:47So you're twenty four, twenty five months in. Right? Maybe even a little less today. Now have you bootstrapped or did you raise capital?

Funding: $250K Raise and Unit Economics

Vishnu Vardhaan

15:53>> We raised capital, but it was a very small round. $250,000.

Nathan Latka

15:59When was that?

Vishnu Vardhaan

16:01>> This was December 2021. Okay. Second year.

Nathan Latka

16:06And and I guess why did you need that money? What what made this capital intensive?

Vishnu Vardhaan

16:12>> We needed we didn't need that money because, EBITDA wise or unit economics wise, we were positive. But we wanted this so that we can hire a lot of people and scale this up across the country because there's a lot of opportunity, and we want to grab that.

Nathan Latka

16:28Yeah. I mean, this is I would consider you bootstrapped. Right? You raised 285 $250,000. You're doing 12 a year in revenue. That's basically bootstrapped. I mean, when I'm running how much of the team how many of the 42 team members are in India?

Vishnu Vardhaan

16:42>> Everybody right now is in India, but based out of multiple locations. Yeah.

Nathan Latka

16:48I mean, the reason I ask is because if you take 12,000,000 run rate divided by 42 employees, I mean, you're generating $285,000 a month in sorry, a year in revenue per employee. That's like extremely high, especially considering your cost on average in India is probably something like 60 to 80,000 per employee. You must just be printing money.

Vishnu Vardhaan

17:07>> I'd I'd rather see that

Nathan Latka

17:10He's printing money. The smile confirms that he's printing money. So, Vishnu, the this begs the question, how do you decide you know, you're a capital allocator at this point. How do you decide where to reinvest the capital?

Vishnu Vardhaan

17:21>> What we are doing is just scratching the surface of waste which is present across the world. So right now, we are probably doing point one percentage the waste which is available across India. So we want to channelize a lot more of that and get to 10%. That's our goal in India. And then subsequently do this across US and Canada and UK and the other places as well.

Nathan Latka

17:44Yep. Makes tons of sense. Are you the sole founder or what how many co founders?

Co-Founder and Team Structure

Vishnu Vardhaan

17:49>> I have a co founder. She's my wife as well. We've been in the sustainability business for close to seven years now, and she's she's my wife for three years.

Nathan Latka

17:59That's a who owns more equity? Her you or her?

Vishnu Vardhaan

18:02>> Both of us earn own the same percentage. Basically, fifty fifty.

Nathan Latka

18:08Right?

Vishnu Vardhaan

18:09>> Yes.

Nathan Latka

18:10That's awesome. That's so cool. What a great story. Okay. So 42 of you got, and how many of the 42 are engineers?

Vishnu Vardhaan

18:19>> We have close to 12, 12 people on the engineering on the technology side. And, yeah. So we have four or five on the Web three and the blockchain side.

Nathan Latka

18:32Yep. I guess just before we wrap up, I think the most impressive thing about this again is just the growth. I mean, how did you get a thousand of these, you know, Walmarts in in India effectively to sign up to the platform?

Growth Tactics: Influencer Network

Vishnu Vardhaan

18:45>> A lot of growth hacking, techniques. Basically, we tied up with a good influencer network, and, they basically, set this up for us.

Nathan Latka

18:56The name of the network?

Vishnu Vardhaan

18:59>> So these are just YouTube channels which has a presence, and we did a lot of proper community based activities like cleaning up streets, cleaning up the India city of Coimbatore and so on. And that got us a lot of leverage. People knew us immediately as soon as we approached them. So, that is how we've got a lot of these guys on board very quickly.

Nathan Latka

19:24Vishnu, what's the name of the YouTube channel that drove you the most customers?

Vishnu Vardhaan

19:29>> It's a it's a local dialect YouTube channel.

Nathan Latka

19:35I was gonna try and search it, but I have no idea how to spell that.

Vishnu Vardhaan

19:38>> Please try. Please try.

Nathan Latka

19:40I have no idea how to spell it. You'll you maybe email it to me afterwards. I'll put in the show notes. But okay. Got it. Influencer network. That's really impressive. Okay. And any plans to raise capital, or you're gonna stay bootstrapped, basically?

Famous Five and Wrap-Up

Vishnu Vardhaan

19:52>> Yeah. We want to raise capital because we want to expand to other countries as well, but we are very unit economics focused.

Nathan Latka

20:02Would you ever consider debt?

Vishnu Vardhaan

20:08>> Debt, mean, money is not the issue for us. Raising capital means that we have network, community access, people that we can brainstorm with. That was the most important thing, not the money as such.

Nathan Latka

20:22Well, if you like brainstorming with me, I would gladly, I mean, I, know, Founderpath is now, you know, over a $100,000,000 fund. We would definitely look at this, but I will full disclosure, I do not have a YouTube channel with a thousand waste people watching every day. So I don't know how helpful I could be there.

Vishnu Vardhaan

20:38>> No. Very, very helpful, Nathan. I've been following up a lot. And, in fact, the software trying to make it SaaS, everything was inspired by whatever I've learned, from you and, this community. So a lot more to learn from you. Think

Nathan Latka

20:53Oh, I really I I get no credit. You're doing a hard work executing, so congrats. Let's wrap up here with the famous five. Number one, what's your favorite book?

Vishnu Vardhaan

21:04>> Atomic Habits recently, but before that, The Law of the Garbage Truck.

Nathan Latka

21:09The law, that's appropriate.

21:11Number two, is there a CEO you're following or studying?

Vishnu Vardhaan

21:15>> Elon Musk at all points of

Nathan Latka

21:19Number three, what's your favorite online tool for building cerclex?

Vishnu Vardhaan

21:23>> What's my favorite? Online tool.

21:28>> Online tool, Pomodoro timer. That's it.

Nathan Latka

21:32Yeah. That's a good one. Alright. Number four. How many hours of sleep do get every night?

Vishnu Vardhaan

21:38>> Today, not a lot. But on average, five, six hours, seven hours. I'm trying to sleep for seven hours right now.

Nathan Latka

21:47And you mentioned you have a wife, so you're married. Any kids?

Vishnu Vardhaan

21:51>> Not yet. I have a pug. That's my kid right

Nathan Latka

21:55That's half a kid. Alright. You got a you got a pug. Alright. Vishnu, and how old are you?

Vishnu Vardhaan

22:02>> Hitting 33 right now.

Nathan Latka

22:0433. Very cool. The same age. Alright. Let's wrap up here. What's something you wish you knew when you were 20?

Vishnu Vardhaan

22:12>> Something I wish I knew when I was 20.

22:16>> That life takes its own turns and takes you to the path that you always wanted to be on irrespective of where you were at 20.

Nathan Latka

22:25Guys, cerclex.com. His application processed in December 20 so last month, over 9,000 metric tons of waste at an average value of $500 per metric ton. That's $4,500,000 of GMV throwing through his application. He takes between 1 to 5% of that. So 50,000 to $200,000 per month comes from that part of the business. His other part of business is pure SaaS, which is in more even more impressive. A bunch of these brands like Walmart as an example, you know,

22:54maybe not a customer, but brands like Walmart. A thousand of them use the app to try and understand, you know, how much waste they're producing to manage the waste collection, all of that kind of stuff. They pay on average $1,000 per month. They did over $1,000,000 in revenue in December, a 12,000,000 run rate up from a 100,000 a month just a year ago, and he's only raised $250,000 to build it. Fa not father and son. Husband

23:16and wife team, Vishnu, thanks for taking us to the top.

Vishnu Vardhaan

23:19>> Thank you so much, Nathan. Thank you. It was a pleasure. Thanks.

Nathan Latka

23:23One 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 1PM

23:48Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. 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,

24:11a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna 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 for

24:32that 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

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