How Klooks Structures Unstructured Financial Data for Banks and PE Funds (Interview with CEO Alexandre Abu-Jamra)

Introduction and Company Overview

Nathan Latka

00:00Klooks.com.br now doing over $50,000 a month in revenue, up from $25,000 a month just a year ago. They have three business models that is selling all kinds of financial data to banks. They have a data as a service, which is 60% of their revenue, SaaS, which is 20% of their revenue, and service, which is another 20% their revenue. They've got a team today of about 35 folks, 26 of which are in engineering and data cleaning. They

00:22help these private equity firms clean up, you know, balance sheets, profit and loss, cash flow statements, then also aggregate publicly traded data off the Internet via scrapers and sell it back to the big PE funds or the banks of the world. Hey, folks. My guest today is Alex Abu-Jamra. He is he's worked in m and a advisory for the start of his career and was a CFO of a manufacturing company prior to being the CEO of

00:41Klooks. At Klooks, he's developed routines of structuring unstructured financial data, integrating with OCR's automatic data classification, quality assurance, and also acted as a sales closer in their main contracts with large Brazilian banks and international financial data aggregators. Alex, are you ready to take us to the top?

Alexandre Abu-Jamra

01:00>> Yeah. Sure.

Nathan Latka

01:01Alright. This is a really tough space. We rely on Plaid data, for example, or Teller or Codat, and so many of them mislabel transaction data in banks. There doesn't seem to be a good source of truth for this sort of thing. Is this the problem you're trying to solve?

The Problem: Structuring Financial Data from PDFs

Alexandre Abu-Jamra

01:16>> Yes. It is in this environment, but are specialized on structuring data out of PDF files, which is a pretty difficult task. It's quite a mess to get financial data out of PDF files and put it into, let's say, tables or SQL or any other sort of data format. And we do that usually for for banks, and and we what what we structure is is our financial statements. We get financial statements from companies, and we turn those

01:53>> those numbers, which are pretty messy and confusing, into something that credit analysts, investment analysts can use to make decisions.

Nathan Latka

02:05So for example, if I run a large structured credit fund doing $10,000,000 debt deals into software companies, and they're all giving me different formatted QuickBooks exports of their of their QuickBooks files, and they all have different labels, I might just send them all to you and you will translate the labels the founder used with the internal labels that we use to triangulate the profit and loss of the balance sheet with the cash flow statement, something like

02:28that.

Product Explained: QuickBooks, PDFs, and Bank Standards

Alexandre Abu-Jamra

02:29>> Perfect. That's that's exactly what we do. Amazing. And that would be could be a QuickBooks file, could be a PDF file out of any accounting system. We get that into a structured format and then we classify it into the bank standards. We do that for banks and insurance companies, but we also do that with public financial statements. We have crawlers in the web getting financial statements that are public and structuring that into our database, and that's

SaaS vs. Service vs. Data-as-a-Service Revenue Split

Alexandre Abu-Jamra

03:01>> what we sell to to international data aggregators.

Nathan Latka

03:05Interesting. Okay. So are you would you say you're a SaaS company or you're, say, more of a service company?

Alexandre Abu-Jamra

03:10>> It's a it's a bit of of both. We have a a SaaS service, which is a platform you can log in online with a password and you can navigate into our public financial statements universe, and that's our SaaS. But for banks, we what we do is is service. We we we

Nathan Latka

03:33So over the last twelve months, what was the split would you say percentage wise between service and SaaS?

Alexandre Abu-Jamra

03:41>> It's There's a third category, which is like data to distributors. So we just sell large amounts of data so people could distribute. I would say that 60% would be data in large quantities to distributors and banks like public Twenty data

04:03>> percent would be SaaS, and the other 20% would be service.

Nathan Latka

04:08Interesting. So you really have what we call DaaS. Right? Data as a service is 60% of your business. That's your main business?

Alexandre Abu-Jamra

04:14>> That's our main business, the data as service.

Nathan Latka

04:16Interesting. 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

04:41connect 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

05:05gonna 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

05:27is 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

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06:41the interview. Okay. Very cool. Put this on a time line. Well, actually, I guess before we go there, for the data as a service, the average customer, what are they paying you per month or per year to access this data, the technology?

Pricing: SaaS Tickets and Per-Statement Fees

Alexandre Abu-Jamra

06:54>> When we talk about SaaS, it's the small tickets. It's 1,800 reais, which is roughly, let's say, $300 to $400 monthly.

07:06>> But when you go to the data structuring as a service to banks, we charge it by by unit. We charge it by financial statement that we structure to them. And depending on the on the quantity they hired from us, it goes to from to an expensive unit price to a quite cheap one. And it goes from, let's say, $25 down to $5 per financial statement.

Nathan Latka

07:36Interesting. So if I was gonna give you a profit loss, cash flow statement, a balance sheet, that's dollars, dollars, $5. So $15 total.

Alexandre Abu-Jamra

07:43>> Yeah. That's it.

Nathan Latka

07:44Interesting. Okay. Tell me more about your team. How many folks are full time?

Alexandre Abu-Jamra

07:48>> Sorry. Financial balance sheet and income statements, it's $5, sir. We don't charge per Oh, I see. Per.

Nathan Latka

07:56Okay. Okay. That's great. How many folks are full time at your company today, Klooks?

Alexandre Abu-Jamra

08:01>> 35, more or less.

Nathan Latka

08:03Wow. Okay. How many of them are engineers?

Team Size, Engineers, and Sales Reps

Alexandre Abu-Jamra

08:06>> We have six engineers and

08:11>> more or less 20 people in our data quality assurance, and while the rest is like administrative sales and stuff.

Nathan Latka

08:22How how many sales reps do you have that carry a quota?

Alexandre Abu-Jamra

08:26>> That's three people counting me.

Nathan Latka

08:28Oh, wow. You're the you're the head of the chief sales guy. Right?

Alexandre Abu-Jamra

08:31>> Yeah. That's right.

Nathan Latka

08:33Alright. Very cool. Okay. Let's put this on a timeline. When did you launch the business? What year?

Company Timeline: Founded 2012, Full-Time 2017

Alexandre Abu-Jamra

08:38>> There are different views on that. We started the business in 2012, but it was a side business to all the founders at that point. I turned into full time CEO of the company in 2017. So well, till 2017, the company wasn't really flowing. It started to happen in 2017.

Nathan Latka

08:59And how many founders are at the company? How many co founders?

Alexandre Abu-Jamra

09:03>> We were three co founders, and we have one partner, which is Avastin, our CTO.

Nathan Latka

09:09Interesting. Now did you guys just split equity evenly at the start, or was it different?

Alexandre Abu-Jamra

09:13>> We did equally.

Nathan Latka

09:15Ah, so you guys are friendly. You just said it right? 25 each, 25% each.

Bootstrapped with a Non-Converting Accelerator Grant

Alexandre Abu-Jamra

09:19>> Yeah. Well, thirty three dot three and well, I had 20 thirty three dot four dot four. So one had to have a little bit more, but that's it. We we opted to to do it equally.

Nathan Latka

09:32That's great. Now have you guys bootstrapped today or have you raised capital?

Alexandre Abu-Jamra

09:35>> No. We have bootstrapped all the way long.

Nathan Latka

09:38Oh, I love that. Alright. And tell me about how you got your first customer.

Alexandre Abu-Jamra

09:42>> Oh, actually, we were accelerated and we, at that point, we received like $50,000 or something like that, but we don't count that

Nathan Latka

09:52How much equity at the accelerator? They

Alexandre Abu-Jamra

09:57>> never converted it. It was an accelerator inside a big insurance company in Brazil, and they just phased out the project and didn't convert any startups.

Nathan Latka

10:05Interesting. Yeah.

Alexandre Abu-Jamra

10:06>> They just lost money at that point.

Nathan Latka

10:09Okay. So okay. So bootstrapped today. That's great. Tell me how you got your first customer.

First Customers: Private Equity and Capital IQ

Alexandre Abu-Jamra

10:16>> Our first customer was a private equity that we knew. We were close to them from our city, and they they had the the the pain. That that was the pain that that I that I addressed, specifically to this kind of guys at that point because I worked in m and a and knew that private equity firms needed that that sort of data, financial statements from private companies that were public in the web. And the first the

10:45>> first one was was this private equity company. But we the first real, real customer that what that that maintained the business for for a while was was a large data aggregator. It's it was Capital IQ in 2014. So they they basically didn't have any any data on private Brazilian companies.

Customer Count Across All Segments

Nathan Latka

11:10Capital IQ was your one of your early customers?

Alexandre Abu-Jamra

11:13>> Yeah.

Nathan Latka

11:13Oh, okay. Nice.

Alexandre Abu-Jamra

11:15>> That's right.

Nathan Latka

11:16That's great. Okay. And then fast forward to today, how many customers today?

Alexandre Abu-Jamra

11:20>> Oh, let's counting counting the SaaS might be because we have the SaaS, we have the data as a service, we have the banks. The banks might be like 10 more or less. Our SaaS might be something like 35, 40.

11:42>> Big data aggregators that are four or five. And there are some guys that integrated our data into their systems and they sell that as a module. And if you count those guys, it's like 200 to 300.

Nathan Latka

11:53Interesting. So what does that mean? I mean, you're if I take that times the ARPU, the the average contract values you were talking about earlier, I mean, you're doing like $50,000 to $60,000 a month, something like that?

Alexandre Abu-Jamra

12:05>> Yes. Pretty much that. Pretty much that. It's a And it it's a a good app.

Revenue Growth: 100% Year Over Year

Nathan Latka

12:09You're doing that today, what were you doing exactly one year ago so we can calculate growth?

Alexandre Abu-Jamra

12:14>> Half of it.

Nathan Latka

12:15Oh, wow. So you've grown a 100% year over year?

Alexandre Abu-Jamra

12:18>> Yep.

Nathan Latka

12:19That's great. Okay. So from call it $25,000 a month a year ago to $50,000 plus today, what do you hope you can reach in 2023?

2023 Revenue Target

Alexandre Abu-Jamra

12:28>> Tough question. I think we can go to something like a $100,000 a month.

Nathan Latka

12:35Mhmm. Well, we're certainly rooting for you. I love that you've bootstrapped here. Do you think you're gonna phase out, you know, two of the models and only focus on one? Mean, data as a service, it sounds like it's the majority of your revenue. Why not kill the other stuff?

Alexandre Abu-Jamra

12:48>> That's a nice dilemma we have when talking among founders.

Long-Term Strategy: Keeping SaaS for 2030 and Beyond

Alexandre Abu-Jamra

12:55>> We understand that data will be pretty much structured in the future. So we don't wanna quit SaaS right now. It's a small part of our business, but we understand that in the future, like 2030 plus, it might be the main business that we have because structuring data will become easier with time, but creating intelligence out of it will not be commoditized so so early. That's that's what we understand. So that's why you don't phase out the

13:24>> others because we are looking for 2030 and on.

Famous Five: Books, Tools, and Life Advice

Nathan Latka

13:27Makes a lot of sense. Alright, Alex. Let's wrap up here with the famous five. Number one, favorite book?

Alexandre Abu-Jamra

13:33>> Favorite book? Sapiens.

Nathan Latka

13:37Number two, is there a CEO you're following or studying?

Alexandre Abu-Jamra

13:42>> Wow. I'll be very cliche. It's on Steve Jobs, but, know.

Nathan Latka

13:47Number three, what's your favorite online tool for building Klooks?

Alexandre Abu-Jamra

13:52>> My favorite online tool I'm I'm not the dev. I I'm the guy that that tries stuff, and I I love to do things in Google Sheets, and I prove to the devs that things work. And then, guys, look, I did it on Google Sheets, so please put that in production. It it works more or less like.

Nathan Latka

14:08I love that. Number four, how many hours of sleep do get every night?

Alexandre Abu-Jamra

14:12>> Oh, depends on the time of the year, but might be seven. I'm a good sleeper.

Nathan Latka

14:17Fair. And what's your situation? Married, single, kids?

Alexandre Abu-Jamra

14:21>> I have a kid, but I'm not married.

Nathan Latka

14:23Okay. Not married with one kiddo. And how old are you?

Alexandre Abu-Jamra

14:26>> I'm 37 now.

Nathan Latka

14:2837. Last question. What's something you wish you knew when you were 20?

Alexandre Abu-Jamra

14:35>> I I think that when I was 20, it would be good if I was less afraid of making mistakes, tried stuff harder.

Nathan Latka

14:44Guys, there you have it. Klooks.com. B r, now doing over $50,000 a month in revenue, up from $25,000 a month just a year ago. They have three business models that is selling all kinds of financial data to banks. They have a data as a service, which is 60% of their revenue, SaaS, which is 20% of their revenue, and service, which is another 20% of their revenue. They've got a team today of about 35 folks, 26 of

15:05which are in engineering and data cleaning. They help these private equity firms clean up, you know, balance sheets, profit and loss, cash flow statements, then also aggregate publicly traded data off the Internet via scrapers and sell back to the big PE funds or banks of the world. Anyways, we'll see what happens next. Alex, thanks for taking us to the top.

Alexandre Abu-Jamra

15:21>> Thank you. It was great talking to you.

Nathan Latka

15:24One 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 one

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