Itilite Revenue & Funding (2024)

hello everyone my guest today is my uncle crazy he is the ceo and founder of a company called italy a sas platform which digitizes corporate travel and incentivizes employees to save money for their company during travel he understands the pain of business travel deeply having lived the life of a mckinsey consultant spending 200 nights per year on the road my uncle you ready to take us to the top absolutely thank you for having me you bet all right so tell us about the company um what's the company doing what is your business model how do you make money uh sure so italite is trying to take corporate travel online we are a sas platform which we sell to mid to large size companies and they use it to manage their full business travel flight bus train visa forex what not that's the baseline uh where we stand out from the crowd is basically b2c travel is very automated and online b2b travel is today still happening over calls and emails right so we provide a exceptional experience to the end user we give the full data visibility to the controllers all the approvals workflow everything happens online and the thing where we stand out is we help companies incentivize their employees to travel cheaper what that means is let's say you're traveling for your company and your company says you can stay in a 300 hotel you would take a 300 but using our platform companies can tell their employees that if you stayed at 200 voluntarily you now save hundred dollars for the company you get a part of the savings what percentage you give this m of the savings that's a company's choice the company is giving to the employee they are sharing the savings okay so it leads to the right incentives people start thinking of companies money and take the right decisions so how do you on average what's the company going to pay you to use your technology so our technology is at the core still managing their travel so we charge a subscription fee to companies which is roughly about three percent of their travel spending but we made every from two sides we make a subscription revenue from the companies but while we book we still make a commission on the incentives from the suppliers as well okay over the past 12 months what percent of your revenue was commit like commission versus the three percent of travel spend roughly roughly equal a quarter uh roughly equal so about 50 description and 50 comes from uh the commissions uh on an average we make about a thousand dollars per customer combining all the revenue streams uh each month yes okay very good that's very good okay and put this on a timeline for me when you launch the company uh we started the company early 2017 but we did a commercial launch towards november 2017. and how many words how many companies have you been able to scale to today uh we have about 80 customers okay that's very good and i want to learn kind of how you got those first customers it's always the tricky part right but before we do that though help me understand i mean do you measure things like total vo total travel spent through your platform over the past 12 months uh we do but that's not the metric we all go after because that's a very vanity metric uh what we really go after and what our sales team target for example is is how much we made out of that i can really cut down my pricing and get a lot of volume but what's the use if we don't make anything out of it well you're always taking three percent though right it's not it's not three percent there is a lot of flexibility as an early startup you do experiment a lot with uh pricing on an average we make three percent but there are a lot of different models we use okay interesting so so those are still individual negotiations if someone comes to you and says they're gonna put a bunch of volume through you you'll take less than three percent uh that's not really the case we typically do a different model so we say that if you do up to x amount we'll charge a fixed fee right so i see so we change the models the average still ends up being around three percent okay so on average you're making a thousand dollars per month from each customer you have 80 customers so you're doing about 80 000 a month right now and by the way congrats you're almost at that million dollar run right that's a big milestone absolutely weird thank you so much and and help me understand growth where we what were you doing about a year ago about a year ago around this time we were doing about two hundred thousand run rate so we have grown five x in the year yeah that's great so that would have been about eighteen thousand dollars per month yeah so you've you've really grown nicely the first uh the fees first twelve months or so um help me understand how you got those first couple customers the first customers were hard you have to somehow create credibility we use our own backgrounds for so far uh see we both of the founders come from very incredible backgrounds we have worked uh both of us worked in mckinsey and some of the larger companies in india that helped create some credibility then we said that we know this problem as consultants we traveled a lot so we understand this problem so you build credibility on yourself then you build credibility on the idea that this idea logically makes sense why don't you incentivize your employees and then sometimes you use some connections uh to get the first customers it's about getting those customers first few customers you have to make really really successful then you get the next five customers because then you have case studies to prove that but yeah first five customers is whatever works yep and then so you you know you're trying to get your first five customers kind of in 2017 time frame were you totally pre-revenue in 2017 or did you have some amount of revenue by the end of 2017 we have never done a customer without revenue so october 2017 is when we got our first customer very small 50 people company but we were still charging them so you were doing what like 2 000 bucks a month in december 2017. something like that something small and then and then do you remember about six or seven months ago in december of 2018 what you were able to get up to do um so six months ago we were roughly about half of where we are today okay very good yeah so 12 months ago at 18 000 and then six months ago 40 000 announced today 80 000 i mean i mean that's a super healthy growth rate where are your customers coming from today have you started to build kind of a scalable sales motion uh absolutely that's where we have so focus on the last three to four months that's what we are trying to do how do we make it scalable uh it's mostly out wrong sales we still don't do a lot of marketing we don't uh we generate leads through a small inside sales team we have which generate email marketing some cold calling and a bunch of references from our current customers how many are on the inside sales team uh three people okay and break down how they work are those all like kind of executives or is there an sdr and an ae and a customer success rep there's no there's no uh so the sales team is suited in two parts there are three people in the inside sales team and there are field sales team the outbound would go and meet the customer and close that team as of today is about 10 people that's one which we are growing pretty fast and then there is a head of got it so there's what like 14 people total just on the sales team very interesting okay what's your total by the way uh i have joined in the last three four months most of these 14. okay got it so what's what's the total team size the total team right now is about 80 people how many eight zero eight zero we have a pretty large support and operations team because what we are into is travel and whatever technology you build at the end you still have to support the customer when they are at the airport and they are about to miss their flight yeah so we have a four cross seven support team which works in ships and have you bootstrapped the company today or have you raised oh we have raised two rounds of peppermint okay how much in the company total uh close to five million dollars we raised our series a recently okay and and why did you need that money like what made this difficult to scale without raising capital so one we could have done it without capital it would have been much slower it's just the speed second this is a very technology heavy company and either you can do it with two people yeah well where and so where are you spending most that money i assume it's probably on head count uh absolutely so engineering and sales account yeah yeah so can you give me a general sensible of kind of how aggressive you're being every month how much are you burning in cash each month right now uh the bone is pretty low still the burn is still converted to that is less than a thousand dollars oh okay so your bank is going down less than a thousand dollars each month yeah yeah so the five million is basically still so actually not thousand dollars so i'm just trying to convert in my head to dollars because we're talking rude please what is it it's okay what is it what are there what's the rupee number the rupee number is about 50 lakhs about five five million rupees so that would be about seventy thousand us dollars yeah yeah okay really wrong but yeah seven thousand dollars yeah so we do have a very long runway from that because we do want to make it more aggressive on the hiring side uh so the investment has not yet gone and as i said we recently raised the raise around yeah where are you i mean so when you look at your inside sales team plus any kind of paid spend you're doing or things like that what's your fully weighted cost to get a new thousand dollar a month customer do you know roughly about three thousand dollars for customers that's still pretty healthy i mean that means your payback's three months absolutely yeah can you those channels you're currently using can you continue to pour more money into them or will you hit diminishing returns pretty quickly uh we need to start many more channels uh we have done as i said zero marketing we almost do no paid so paid marketing events these are the channels we want to open up we have just experimented with them also the channels we do right now which is email marketing cold calls we can scale them pretty quite a lot so most of your cac right now is from team and head count over and not paid marketing spent on google and facebook ads absolutely got it what about do you have enough data to get to understand how sticky your product is for these folks do you know what your gross churn is annually uh we have almost zero char as i said we spend a lot of time in the one and a half year we have lost two customers and also those because those companies are no longer yeah we have not lost otherwise so maybe like two percent churn annually or something very small one of the smaller customers so the revenue churn is much lower yeah otherwise yeah have you been able to uh identify ways to drive expansion revenue and if so what do you what do you think a customer expands to from year one to year two on average uh so not really there is organic expansion as the customer expands their spend increases and so we make more yeah uh a different product line or different service we haven't focused on that yet yeah yeah that makes a lot of sense you're kind of in hustle mode still in the early days which i it's a beautiful place to be um okay mike very good let's uh let's wrap up here with the famous five number one what's your favorite business book uh it's not really a business book but shoe dog uh by phil knight number two is there a ceo you're following or studying not really a ceo jason lemkin i read the streets that's what my twitter is for number three what's your favorite online tool for building your company personally for me it is evernote and for the company it's slack number four how many hours you sleep to eat every night five to six hours that's pretty good in which situation married single kids oh married no kids no kids and how old are you 34 last question what do you wish your 20 year old self knew um more patience uh we have to understand that things things this is a marathon the career is a marathon i always wanted results quickly in the job in the startup you have to be more patient although you hustle but results take time guys italite.com helping companies manage their travel spend by incentivizing employees to save money 80 customers right now each customer pays about a thousand dollars per month so almost a million dollars in terms of run rate right now they make money by taking about three percent of the travel spend plus the commission from hotels and trips and airlines and places they book for these companies they've grown from 18 000 a month in revenue just a year ago so we're 344 year-over-year growth churning almost no one burning seventy thousand dollars per month right now in uh in uh in money but they've raised five million dollars so plenty of runaway team of 80 people as my looks to scale my young thank you for taking us to the top thank you so much