Keeper Security Revenue & Funding (2024)

hello everyone my guest today is darren guccione he is the ceo and co-founder of keeper security the creator of keeper the world's most popular past form password manager and secure digital vault and keeper chat the world's most secure messaging app for all your devices the software is used globally by millions of people and thousands of businesses all right darren are you ready to take us to the top yes i am all right popular's a big word and my audience expects me to ask about it so when you use the word popular defend that why are you the most popular well we have millions of users in over 100 countries so we you know we grow rapidly we thousands of users a day are being added to the platform globally it's it's fantastic okay so like i mean do you know for sure you have more users or customers and like a lastpass or other people in your space um we don't really compare to others but i can say we have you know millions uh we don't really know what you know other privately held companies have or don't have but we know what we have and so but in order to be popular you have to be higher than somebody else right so that's why i asked the question more define your market for me right that's really what i'm asking is define your market sure so we sell to individuals and businesses we've got over 15 million people globally using our application we have you know thousands of companies using our product we began selling the business product about two years ago and have amassed you know thousands just several thousand over the past couple of years we're traditionally private so we don't um typically disclose the exact number that we have but i will tell you that um based on what we see in terms of app store you know data and app store reviews we have really the highest level of customer satisfaction highest consumer ratings in ios for example we're a 4.9 out of five which is very rare for a security application and we really let the customers you know speak on our behalf in terms of how they evangelize the product and speak about you know their satisfaction and compliance with the product in terms of having it you know safeguard their most sensitive digital information so darren who is actually paying you is it a company and then they force all their employees to use you or does one employee start paying you and before you know it the whole company's using you well on the consumer side you know we sell to individuals at app stores through the website as well but um so we have individuals paying us just for their personal lives um and then we have employees that pay us and also expense it through their company and third we have the actual company that buys it for the benefit of their employees so it can take its form in different ways there's you know multitude of ways to access the product so you can buy it for yourself or the company can purchase it for you or like i said we see employees purchase it and because their their company doesn't really sponsor it sometimes they'll just pay for it themselves or they'll expense you know that through a report and send it to the company for reimbursable okay well just for the sake of really understanding what you do let's just stay then at the actual individual user level and and just i will understand that that user can be by themselves part of a team or part of a team where this the company actually sponsors it but we'll just talk at that level for the interview for just so everyone can understand so if someone listening right now wants this product and goes to the app store um what are they going to pay to download it from apple or android or wherever you're at so thirty dollars per year and it covers unlimited devices okay got it 30 bucks per year unlimited devices and then i assume if you have a sales process where you're selling directly to cus to companies if they buy you know a thousand seats you'll maybe obviously wiggle down on that 30 price point for volume discounts yeah so we'll start at 30 for you know really smbs and then if you need more advanced provisioning tools you know things like active directory more sophisticated architectures we'll pay 45 per user per year and so uh yeah it can escalate we also sell a family plan we sell add-ons like secure digital file storage or something new called breach watch which is a fantastic solution that protects you from the dark web and then we also sell things like you know i mentioned secure digital file storage and then we have something called keeper chat which is an encrypted messaging application so it starts with password management and then we layer in additional security solutions that are all really focused around preventing a data breach yeah and do those additional obviously product lines allow you to drive revenue from 30 bucks a year to 35 to 40 to 50 over time yeah so we you know typically people start at 30 and then they start adding to the solution so they can layer in additional services that they find a benefit to them but we try to really price at value so that the product is highly affordable um you know you're protecting sometimes millions of dollars in digital assets right because it's your identity it's your bank account social media email etc and we try to price it very reasonably so that again millions of people can you know access the system and the software for themselves or their companies put this on a timeline for us when did you launch company 2011 2011 and and give let us in your personal life a little bit i mean where were you did you just leave corporate or yeah i mean where were you at i've been a serial entrepreneur most of my life so um you know started my first company in my 20s with my partner craig lurie that was acquired by cnet networks and and just you know just bringing us fast forward it's uh our third technology company hope you get better at it as you go along but uh that's our third one yeah and it's it's been the best uh the ride's been amazing um but i have an interesting background you know my background is really like a bean counter smash with an engineer so i'm a cpa i've got an undergrad in industrial mechanical engineering and typically that's so different than you know going into software but i've been running and building software companies really most of my professional life and for about 15 years i took a break and focused on really real estate development real estate development yeah i did um real estate finance and development for like high-end residential resort hotel uh properties and did that for about 15 years as well as a lot of tax structure and tax planning and then i got back into technology about just about 11 years ago full time so i've been doing um this is my latest venture uh which is key for security with my partner craig lurie and uh you know it's our third company together and we think it's you know the greatest thing that we've done really since the start of our technology career so fill the team out for us so it's you and craig and how many others today um today it's about 140 okay so we've grown a lot you know in the past couple of years we've really almost quintupled the size of our business we were roughly 35 people and we decided to launch our b2b enterprise business and that has really driven a lot of the growth and just expanding the whole cyber security offering with our individual users as well you know getting into other things aside from just password management really focused on the problem with um preventing a data breach so where are all the different things and tools that you should be using to really you know protect yourselves whether it be from the dark web or with passwords or secure file storage or encrypted messaging if a hacker gets their hands on your smartphone tablet or computer you really want to make sure that you have a multitude of different tools that are protecting you and safeguarding you against an attack and daryn have you guys built this up uh kind of the harder but more respectable bootstrapped way or did you guys go out and raise capital yeah we haven't reached any outside investment capital yet so this was bootstrapped and i seed funded the company and never looked back it's been a blessing you know we've taken a lot of the profits and we continue to reinvest in our growth so you're breaking then you operate basically a break even today then no no we're uh we make um really high profits yeah we're a profitable business well my point is though if you if you bring i'm gonna make this up if you bring 10 monthly to the bottom line you're probably going to reinvest that next month to drive growth right or are you paying out like dividends or rev shares to employees yeah so we have um we do really what we call a discretionary bonus pool at the end of every year so yeah so we pay out to our team members and we'd like to think that we're pretty generous company in that regard and so uh yeah it's privately held uh majority owned by my partner and i but we have you know stock options we've got the discretionary bonus pool so we like to make sure we take care of our team and also leave you know ample working capital on the balance sheet to you know fuel the investment in our team and our growth yeah um i'd love to see and there are a lot of people thinking about this mad wire jb kellogg just came on they just passed about 104 million bucks in arr and he's doing this model where it's essentially right you know they don't want ipo they're hugely powerful they just basically do rev share across their whole base and everyone kind of models it differently some people it's just you know the founders there's a pool of i'm making this up 10 million bucks at the end of the year you figure out on a 101 basis who to give what to i mean do you have a system for how to distribute this capital to your teammates at the end of the year or is it really just pull it out of your head no we you know the board meets we figure out where our bonus pool is going to be and then you know craig and i really allocate we lay out the entire employee roster and just you know go team member by team member and look at you know maybe what they did last year in terms of bonus and we really lay it out methodically and go through you know each and every person on the team and say okay you know what we want this person to receive and um there's a lot of checks and balances with that we take great care and making sure that each separate person is taken care of first and then you know my partner and i um are last in line so we make sure that we take care of our team you know they always come first and and whatever's left you know we'll um we'll take it from there how do you how do you avoid the inevitable conversation before everyone leaves on christmas break but after you've put out the bonuses where joe talks to sam and joe realizes he got paid less than sam but joe thinks he's smarter than sam yeah you know we haven't had that problem you know i think people there's always a thing where you know sometimes people are going to discuss what others have received but you know we try to let people know that you know what what what a person gets versus b we don't disclose that to anybody we're not open like that you know um an individual employees you know compensation to us is private and with them we hope that they keep it private um we've never really had a situation where someone comes in and says oh my god that person got a bonus that was higher than me i'm upset about it yeah we just we've never had that happen that's great very good um churn in the spaces you know can be difficult we've had lastpass we've had dashlane with a lot of your competitors on what is your turn today and how do you manage it our churn is pretty low i mean on the consume side our churn is right around eight percent okay that's logo term per month no so we we charge uh annual recurring subscription so we do not do monthly subscription plans we'd only do annual so we have about a 90 to 92 percent you know retention on our subscription plans which is pretty high and we see about the same uh in the smb channel as well so you know 90 plus percent renewal rates okay so across your entire complaint across your entire customer base really 90 plus retention rates annually meaning you'll churn up to 10 of the revenue each year yeah okay that's not horrible now do you have an expansion machine where you know like expansion is 20 or 30 year-over-year or not really um expansion yeah so we we have you know pretty strong expansion metrics um you know we don't disclose what those are but i will tell you that uh we're really we're really i think capable in terms of what we do with expanding you know rpoo which is the metric that we look at on consumer and then in terms of asp on the enterprise side and the count sizes within the first six months we see significant expansion especially in the b2b product what's significant i mean are we taking 120 180 no no i'm saying you know if you look at uh it would be i'll say it's over 50 of the accounts that you sign up will start expanding adding more employees to the platform or buying additional services so it's uh it's great to see that you know companies are taking cyber security seriously and they're addressing it more pervasively yeah so you know before it used to be you know most mainly for the it department now we're seeing more enterprise-wide deployments yep darren we're running out of time here but last few questions um when you do sign up a team typically in that first year i mean are you signing up 10 of their employees or a thousand or a million i just want to get a sense of kind of where you're playing yeah we don't uh we don't disclose the average number of employees per plan but typically um the buyer in our business will be in it and then it'll expand either from the i.t department out or you know maybe it's hr accounting finance yeah but i'm sorry i just all i'm trying to do so i just gave a massive range i said 10 employees or a million i mean you can give me some range here i'm trying to understand if you're kind of a small mid or enterprise kind of sales um eighty-five percent of our business is to smb yeah but i i know i see smb is a label i'm trying to understand how you actually define that so are you talking 10 employees or less 100 employees or less 500 or less yeah so smb for us is under a thousand okay good okay good so 80 of your new signups are teams that are less than a thousand correct okay that's great and is that usually um coming from um bottom up or it's the iot guy finds you and signs up all a thousand at once when you say bottom up can you please explain sure bottom up means one of the people on the iot team installed you at their when they were on vacation with their family one day they went back and told their boss we all need to use this and then before you know it you're moving to a thousand person plan it's been both so we we you know we see upstream deals like that where individualizer who used this for you know three years decides to go to his company and say well we should really consider this for the entire organization we also market that way you know more of an upstream approach which we call grassroots so we'll market to the existing individual user base and then additionally um you know we'll do a lot of you know digital marketing uh we have a lot of inbound legion that comes in where people have never used the application so we see both and and we handle it that way and then last question here so you said and correct me this is wrong he's at the top of the show you have about 15 million total free and paid users on the account on the platform yes okay and uh and of those 15 million over that yeah okay over 15 million of those 15 or over those 15 million how many are actually on a paid plan yeah we don't disclose that okay to the public i i i is are you generally you know others have disclosed it so i know kind of what's average or would you say you're generally above average or would you say you're generally above average or below average um we're leading yeah but see how do you you you can't know if you're leading or not if you don't i do know how do you know i just well i know because i know what the metrics are with the other businesses but how many paying how many paying customers does lastpass have why why do you want me to disclose that well i have them on i know the number the only way that you would know if you're leading yeah i'm not gonna look i'm not gonna get into a debate with you about it i'm not going to darren i don't want just to be clear i'm not pushing you to disclose but when someone comes on no no don't okay i'm telling you now don't disclose but what i'm going to say is you can't come on and say you're the best or have the top when you don't know whatever i'm not saying i'm the best you just said you're the top you said most popular i'm not saying i'm the best i'm not saying i'm the best i can say you can go to the app store and look at our rating and you can compare our rating with one of the other competitors more than welcome to do that okay but that's different saying you have the best rating is saying your rating is the highest is very different than saying you have the most users or the most paying customers i don't know what you're asking me you said you asked me if we're the best i'm just giving you a metric no no i'm i'm i'm asking questions based off what you tell me and what you said was you asked me you asked me how many paid users do we have and you said no and i moved on i'm saying we don't disclose that and then what did you say right after that i have no idea i don't i don't know you said i'm just answering your questions no no i'm going off what you tell me darren and what you said right after that was you're at the top you said you know you're the best and i said how do you know that what's last past customer account and you said well i'm not telling you that i know what they are and the only way you know if you're at the top or the best on that metric is if you knew those data so what i can say and i don't know this is on my phone in front of me but what you're saying is you have the highest rating on all these platforms where people can download is that accurate that i've seen i mean it's uh it's a it's it's highly rated it's 4.9 out of 5. i think that's pretty high if you look at go to the app store and just pull it up yourself um look at our ranking versus the other products i mean i'm not here to like bash i'm just here to answer questions no no darren i like i like data not not not when you say things like popular or top or best or most downloaded i like data there's no antidotes but you have to understand something we're privately held we're somewhat guarded in the terms of the data you've asked me about compensation you asked me how i pay my employees you've asked me how many customers we have you asked me how much you know how many are paid i didn't realize that the interview was going to be you know a data harvesting session on our company have you listened have you listened have you listened to any other episodes i have not okay so that's your fault right because we've done 3000 interviews so we've done we've done three thousand interviews no my point is my point is i'm gonna be respectful of data points that you say you don't want to share i'm not pushing you on customer count i asked you said no and i moved on thank you but but when you but then when you use verbs and adjectives like top best or most popular i'm going to quantify those i can't let you just run away with that without understanding what you mean so what i'm saying what i'm hearing you say and make sure i get this right is you're the highest ranked on the on these pla these downloaded platforms and that's what you were intending to say is that accurate well that what i intended to say it's what i said is it true are you the kind of facts you have the highest rating than last you have a highest rating than lastpass and dashlane on the app store on the ios app store yes great awesome let's wrap up here with much easier questions famous five number one what's your favorite business book i don't have a fit i don't have a i would say my favorite there's several but i do like the art of worldly wisdom by balthazar gracian art of wisdom you said art of worldly wisdom worldly wisdom okay great number two is there a ceo you're following or studying several i would say i like larry ellison i've read steve jobs the book uh number three what's your favorite what's your favorite online tool for building your business for building our business uh i'd say the one that we use the most is probably workflow products from atlassian number four how many hours of sleep to get every night [Music] let's see you cut out how many six six great and what's your situation mary okay yep married single kiddos married with kids oh very good and uh how old are you 49 49 last question darren take us back 29 years what do you wish your 20 year old self knew i don't really think about it like that my 20 year old self was i'd say a lot different i was uh the lead singer of a rock band at 20. anything you wish you knew anything you wish you knew back then i would say i think the most important thing is really treat time is the most precious thing that you have don't waste time guys don't waste time it is precious keeper security launched back in 2011 after an 11 year hiatus in the tech industry he's back in it now he's got about 15 million users on his product uh he's got thousands of logos using it um 80 percent of the revenue coming from what he defines as smbs less than a thousand employees on those teams they charge 30 bucks per year for the platform they churn about eight to ten percent of their revenue each year so healthy economics there as i look to scale with our team of 140 folks darren thanks for taking us to the top thank you