Keito Revenue, Valuation & Funding (2024)

[00:00] Hey folks, my guest today is Amal P. S. [00:01] >> He's a former Infosys and EdgeVerve product manager. He's been part of the leadership of two small sized businesses, enabled scale during his tenure with over 200% increase in revenue and better visibility. He's now a pro athlete, passionate about fitness, new ideas and designs, and is building tech to connect people and new age technologies at keito.works. Alright. Amal, you ready to take us to the top? [00:21] Yeah. Sure, Nathan. Happy to be here. Thank you for hosting. [00:24] >> Athlete. Which sport? [00:27] Kickboxing and fitness. Yeah. Shot put, javelin. [00:32] >> Alright. Tell us what you're selling at keito. It's keito.works. What's the business? [00:39] So we are having a no code automation platform, primarily focused on data automation and workflow automation for enterprise businesses. [00:48] >> Mhmm. And what are these businesses paying on average per month to use the technology? [00:52] So they pay on transaction. Per month, it would be around $5,000 to $10,000 for usage. [00:59] >> Okay. And that's pretty expensive for a no code tool. You're targeting the enterprise. What enables you to sell at such a high price point? [01:05] It would be the kind of return which we can bring to the enterprises, mostly focused on the productivity, accuracy and the lowest exception rate which you could see in the market. [01:16] >> The lowest what rate? [01:17] Exception rates. So, of the enterprise automation tools have a very high exception rates which are hidden in the system, which means that even after implementing you would have to spend quite a lot of money on managing your exceptions, right? Whatever does not work in automation, so called you will have to handle with humans in between, which means it's no longer a true automation solution. So we look at having a real automation case for our businesses. I [01:42] think that what ensures us to have a high price in the market. [01:46] >> Okay. Interesting. And then tell me about some of your customers. Right? Are are these like, you know, enterprise accounts? I mean, you have Thomas Cookless on your site. You have the government of India, United States service. What are they using you for? [01:58] So they are looking using primarily for the information extraction and information automation side. So we have the product dealing with information in two layers. One is with respect to fetching information from different sources, whether it is your textual or document or image sources, are able to fetch information. Second is to ideally process those information and pass it on to any of the business ops, right? Whether it is processing your loans or whether it is validating the [02:26] KYC or whether it is you have to perform certain number of action based on the data that is available. I think all of these actions could be triggered within our platform. [02:34] >> Are you selling mostly to fintech firms? You mentioned KYC processing. [02:38] Yeah. Fintech is definitely one of our customers, BFSI sector. Yeah. [02:43] >> That's your largest sector is fintech? [02:46] Not largest, but we are primarily this is one of the growing sectors, would say. And it shows quite promising and we are also launching a new vertical SaaS application in the same sector. [02:57] >> Interesting. Okay. So we'll get more of your backstory here in a second, but how many customers are you serving today? [03:03] More than 10 enterprise customers. [03:05] >> Okay. And so can we take the 10 times $5,000 a month minimum, you're doing like $50,000 $60,000 a month in revenue right now? [03:12] No, we are slightly above that. So we do have a lot of production contracts in place right now. So we have completed a lot of POCs, paid POCs with the customers, enterprise customers as you have, as you already know right enterprise customers takes good amount of lead time to ideally start implementing because of the kind of security measures and the kind of contracting process it is involved. So ours is not a conventional SaaS solution. It is [03:38] more or less an enterprise licensing model is also involved in place. Right? Your contracting process is slightly lengthier than an average business. [03:46] >> Understood. But in terms of average, like actually onboarded licenses, you're doing what $70,000, $80,000 a month right now in revenue? [03:54] So we have crossed around 200 ks plus in a year. That's what where we stand now. [04:01] >> Okay. That doesn't answer my question, though. So in November, in terms of recurring revenue, how much did you last month in total revenue? [04:07] So we crossed $15,000 across. [04:10] >> One five? Yes. Okay. Got it. So so you're doing about $15,000 a month in revenue. And if you're doing that today, where were you exactly a year ago? [04:19] A year ago, we would be slightly around zero, near to zero. [04:24] >> Did you have any revenue a year ago? [04:26] No. We were having a very near to zero revenue. Thousand, thousand, two thousand dollars is where we're we're standing. [04:32] >> Okay. Got it. So you you were a thousand bucks a month a year ago, now $15,000 a month. So so you're scaling here. And now if you're doing $15,000 a month and you have 10 enterprise customers, they're not paying $5,000 or $10,000 a month each. They're paying like 1,000 a month each or 2,000 a month each. [04:45] Correct. So we do have two kinds of customers. A couple of the customers who have converted from a paid POC to productions, a couple of customers who are in production. So, we are at a stage where we have closed a lot of customers, moved from the POC stage, the proof of concept stage to the production stage. That's where we are in. I think in the coming two years we would cross a million dollar ARR. Right? So [05:07] that's where we could see. [05:08] >> I understand where you could go, Amal, but in terms of where you are right now, again, customers are paying on average like 1,500 a month for $15,000 a month in total revenue. Correct? [05:18] Not every customer, Nathan. So we have couple of customers, two or three customers who are paying the total license fees. So other customers have just moved from a POC to the production environment. Yeah. So they are in the process of ideally onboarding into us in terms of full scale licensing. [05:35] >> Averages, we're just dividing two numbers. If you're doing $15,000 a month in revenue, which is what you just said, and you have 10 customers, we can divide. Right? So each customer on average is about $1,500 per month. [05:46] Yeah. So that would become the average size of the customer who is paying today, but it consists of two kind of revenue numbers, right? One is from the license fee, second is from your paid POC cost. So paid POC cost drastically drops down the average billing of a customer. [06:03] >> And how much how much are the paid POCs typically? [06:06] It costs from around 2,000 to $5,000 per customer. [06:09] >> One time or monthly? [06:10] It's a one time cost, Nathan. [06:13] >> I see. And and and how what enables you to move someone from paying $3,000 one time to 4 or $5,000 per month after the POC? [06:22] So during the POC, customer validates whether the platform could handle the workflow. It could handle the information extraction. That's what the customer looks at. Once that is stable, the customers looks at moving a large volume of data. Right? So here during the POC, it might be a minimal size of data. So there is one mortgage customer where we have made them live, where they are processing around 100,000 plus documents transacted every month. So that means the [06:47] volume increases and your license cost also increases. So the license cost is directly proportional to the volume of data processed in the platform. [06:55] >> I see, makes sense. Tell me more about how you funded the business. Are you guys bootstrapped or have you raised? [07:00] So we were bootstrapped in the early ages. Later we had a couple of angel rounds. We raised around $400,000 until then. [07:07] >> And what year? [07:09] 2019, 2020. So two years back to back. [07:13] >> And and 400,000 on a safe, I assume? [07:16] 400,000 on equity. [07:19] >> On a 20,000,000 valuation? [07:21] No. Not 20,000,000 valuation either. So currently, are in the process of raising another round. So that would become our first institutional round. [07:29] >> Sorry. Yeah. When you raised the 400,000, what valuation did you raise at? [07:33] Yeah. So I I wouldn't be able to comment on the valuation as current current rounds are ongoing. [07:38] >> Well, anyone that's looking at your current round is going to ask for a cap table and they're going to see what the valuation was in your seed round. [07:44] Yeah, it was at 4,300,000. [07:46] >> Okay, got it. So you sold about 10% of the business? [07:49] Yes, not 10%. I think over a period 20% of the business. So we had two rounds in the past. So the most recent round was at $4,300,000 pre-money. [08:01] >> Okay. So you've sold right now investors own 20% of the business. Correct, Nathan. And how much do you still own? [08:08] I own almost 70% of the business. [08:10] >> Okay, so you're the major shareholder here. So why go raise more capital? Obviously, you get diluted. Where do you think you'll invest that to drive growth? [08:17] So first, I think we were trying to identify the product market fit and where we need to spend the money. So so today, we know where we can spend the money, and that's when we started raising our institutional capital now. [08:28] >> How much are you looking to raise? [08:30] 1.2 mil, and half of that is already subscribed. [08:34] >> Oh, great. What valuation? [08:36] So we would be raising at around 10 mil valuation. [08:39] >> Does that feel high or low to you? [08:41] No. It's actually a emotional feeling. Right? It's not something bound to what do we feel. I think collectively, we feel fine with the valuation and it's completely a win win for both of us. [08:54] >> And if investors currently own 20% and you own 70%, where's the other 10%? [09:00] So we have ESOP's employee shares. A lot of the employees, early employees on a good chunk of the company. [09:06] >> I see. I see. Tell me more about that. What's the team size today? [09:10] So we have 14 people in the team. We have six interns working full time. So that's the total team. [09:16] >> I see. And how many engineers, Amal? [09:19] Primary engineers, and nine people are engineering. [09:22] >> Oh, wow. Are you an engineer? [09:24] Yeah. I am an engineer. [09:26] >> Very cool. Where is the team based? [09:28] Team is based out of Pune, India. [09:30] >> Something special. [09:32] Yeah. We have a scattered team. We have couple of them in Bangalore, which is a non place in India for startups, and we have couple of them in Delhi. [09:40] >> Amazing. Something special is happening in Chennai, Bangalore, Pune. There's so many great SaaS companies coming out of that region right now. So nice work on the growth. Are you raising the 1,200,000, are you is there a healthy angel ecosystem there in Pune and India or are you having to look elsewhere to find capital? [09:55] I think in India currently have a healthy ecosystem, but at the same time, people are looking at US investors where their market is primarily US. [10:06] >> Makes a lot of sense. Talk to me about churn. These enterprise customers that are now paying per month, $2,000, $3,000, $4,000, $5,000 a month, do they churn? [10:14] So mostly for us, we have not reached the stage where we could measure a lot of churn because most of the customers are going into contracting for us. So we do not know whether how much is the churn rate. Because most of the enterprise contracts are for two, three years kind of a timeline. [10:29] >> Yep, yep, yep. Talk to me about you mentioned you know where to spend money to drive growth. What does it cost to get a new, you know, 3,000 POC? [10:36] The cost to get a $3,000 POC is around $3,000 to $3,500 for us today. Okay. [10:41] >> Okay. So you get a sort of instant payback on that, which means your only upside is if they convert and do a monthly plan after the POC. Correct? [10:49] Correct. The cost involved primarily is in terms of getting the enterprise onboarded with us. Right? So we have an instant maybe breakeven, you could say operational breakeven of the cost spend. [11:01] >> Very cool, Amal. Let's wrap up here with the famous five. Number one, favorite business book? [11:06] Hard Things About Hard Things and Shoe Dog, Phil Knight. [11:09] >> Number two, is there a CEO you're following or studying? Yeah. Steve Jobs for many long years. Number three, what's your favorite online tool for building Keito? [11:20] There are many top of the mind whimsical, ClickUp, Nordship. [11:25] >> Yep. ClickUp's good. Why do you use ClickUp? [11:29] Project management, easy to use, simple tracking, any team member can understand, no need of any handholding. [11:38] >> And and you're building this in in Pune, so your whole team in India uses ClickUp? [11:42] Yes. Correct. [11:43] >> You switch with someone else like Trello or Jira or Asana, or did you always use ClickUp? [11:48] No. We we have been quite savvy as a team. So we have used most of these tools even at an early stage. Basecamp, Trello, Asana, Jira. So whichever is the latest tool which adapts to the pace at which we are going, we we jump onto that and try to understand fit in our, yeah, that's what we do. [12:07] >> So what do you like about ClickUp over Trello? [12:11] I think Trello is a combination of Evernote, Notion, and click and other tools which are available Jira. Right? So it's it's convenient. It could be used by any of the team. So I think that's the most flexible thing. Trello becomes something which is available at a higher level. You cannot go into the minute details of items. So Trello, you could have a good quarterly plan or a yearly plan, but once you go down to execution, it's [12:34] very difficult to track in Trello. It becomes [12:36] really easy. [12:36] >> Because you can plan and execute inside of ClickUp versus Trello is more for planning. [12:41] Correct. [12:42] >> Very cool. Alright. Number four, how many hours of sleep do get every night? Six. Six hours. And what's your situation? Married, single, kids? [12:51] Married. [12:52] >> Any kiddos? No. Okay. And how old are you, Amal? [12:56] So I'm 29. [12:58] >> 29. Last question. Something you wish you knew when you were 20. [13:02] So I wish I could I could have read a lot more books early on, maybe onboard and mentor so that I could learn what I could do next in my life. [13:14] >> Guys, Keito, a true tool to help you automate your data automation needs and scale. They've got 10 enterprise accounts right now, about a thousand bucks a month in revenue a year ago, now $10,000 $15,000 a month as they look to scale. They raised a capital. They raised $400,000 in a seed round, sold about 20% to investors, now raising a 1,200,000 series. They had a 10,000,000 valuation. Team of 14 mainly based in Pune, India as they [13:38] >> look to scale. Amal, thanks for taking us to the top. [13:41] Thank you. Thank you, Nathan. Thank you for your time. [13:45] 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 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 [14:10] Central. 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 [14:32] fundraise, a big sale, a big profitability statement or 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 [14:54] 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 [15:14] 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.