KFactory Revenue, Valuation & Funding (2023)

hey folks my guest today is vlad kazan he's the co-founder of k-factory a growing startup in the first industry 4.0 platform funded by an investment fund in romania he's turning factories into smart factories vlad are you ready to take us to the top thank you for the opportunity to discuss about k factory and how we can um digitalize production lines in order to improve performance and productivity so who's buying this kind of technology is it amazon or walmart people with a lot of warehouses our customers are factories okay manufacturing companies which are willing to increase the performance and productivity of the production line so we are b2b uh platform and our customers are manufacturing companies can you name a couple of them that we might know um most of the customers are from automotive industry but we have a few customers here in romania but most probably you will know the name because they are not like big names which are producing i don't know phones or so uh i can name understand customers so you're in automotive textiles printing plastics footwear apparel machine producers food and beverage all these kind of folks that run warehouses now what will one of these customers pay you on average per month or per year to use your technology and we have multiple modules so each module is having a subscription feed having a more pricing depends on how many equipments you are monitoring depends how many users so there is no uh let's say average can be from thousands to 10 000 a month or or more but depends in some cases the average what is important to say is that we are charging us small money comparing with benefits but the benefits are huge and the the subscription fees uh but most customers that are paying you something like two or three thousand dollars per month yeah we can say like and put this on a timeline for me when did you launch the business what year do you remember we have started five years ago and uh in 2020 we succeeded to close our first investment round this year we succeeded to close the second investment round so we are doing this for uh for five years already okay so you launched in 2017 you launched your first round of financing last year how much uh the first round was uh 2025 k euro and that's right sorry vlad sorry what you raised and you raised in 2021 was your first round right yeah and how much 225 thousand 200 225 000 euros so about 270 000 united states dollars that was your pre-seed round and then you raised more this year yes 600 um thousand uh euros so in total almost one million yeah in total almost 1 million u.s dollars raised until now and most most founders in their seed round right are selling 10 to 20 percent of the business what valuation did you raise at last year do you remember usually this is not the public usually we are right um the average is the first the first round is bigger because and the second round and the third round is lower so the idea is to to go in third round uh with more than 60 percent of the company owned by the co-founders this is the so today today the co-founders own 60 percent more more than this well how much that's what i'm asking how much have you guys been able to keep with two rounds of funding because funding means delusion yeah this is i'm i'm telling you this is confidential usually we are not disclosing this oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're gonna 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 is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations 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 all right let's jump back into the interview okay but it's more than 60 percent vlad yes got it more than 60 more than 60 the reason i asked this question is because delusion is a very real thing right and over time if you lose control of business you're screwed or you can be screwed so that's why we ask the question the more you can share the more my audience learns so i appreciate you being as open as you can um so got it so you've scaled now um when did you sign your first customer was it back in 2017 yes we have started with our first customer but this is how we started the the k factory so we are not on standard startup or having an idea going in front of investors and so on we have started with one customer and we build it uh together with our customers the platform and how many customers do you work with now today we have 12 customers and 400 more than 400 equipments monitored in real time industrial equipments say that last part i don't understand we have more than 400 industrial equipments monitored in this moment in our platform connected to our platform where individual warehouses we are not dealing with warehouses we are monitoring production lines our production lines inside of warehouses inside of factories factories warehouses yeah um we have a production line in a factory and then we have warehouses raw material warehouses and finished goods warehouses we are dealing with production lines which is between raw material warehouses and the finished goods warehouses so you are in warehouses you are in finished goods warehouses i'm just using i'm repeating literally what you just said to me back to you so point being is how many individual i guess buildings or warehouses or production facilities are you currently installed in today we have installed the platform in 12 factories not warehouses oh sorry so you've only installed this in 12 physical buildings i thought 12 was your number of customers every customer has only used you in one factory one factory yeah it's in one physical building but why aren't customers if they love your product why aren't they installing you in all of their buildings and multiple buildings multiple factories this is what is happening with the current customers we have started with one factory and now we are extending the the solution to other factories outside romania so we are dealing with we are working multinational companies which are heavy we started with one plant and then we are extending to to other plants this is where we are now of your 12 customers today how many have you installed in more than one plant uh none yet we have now uh contracts signed with few customers to roll out in other plans so most probably we'll have uh during the summer the rollout why not i mean you've been building this for five years if it's working these people should have you installed in all of their factories all of their plants why are you just now five years in expanding into more than one plant per customer usually when you are building a product or a platform like egg factory you cannot burn faces so in order to to be able to extend to um to other plants or to to other locations we we have you have to be prepared and this is the moment we are prepared to do this until now we we've been focused on raising the number of customers this is the most important for startup and to increase the monthly recurring revenue monthly recurring revenue we can take 12 customers times 2 000 a month average you told me earlier you're doing about 25 26 000 a month in revenue yeah in this moment yes and if that's what you're doing today what were you doing exactly one year ago do you remember uh five times less so you're doing about five thousand dollars per month a year ago less than yeah so my question is you you said you launched in 2017 and revenue was just five grand a month last year in 2021 how are you paying your people for three years where you basically were doing no revenue investing um our money and investors money so this was the the idea we started the platform then we we looked for an investor we found first investor in 2021 until then of course we're paying for from our money i'm asking that's 2017 2018 2019 2020 that's four years so you guys were just invested you've personally put in a lot of money basically to just pay yourself over those four years yeah how much have you personally invested in the business we didn't calculated exactly but i think around five 500 000 us dollars at least does that make you nervous is that like a lot of money for you or a little bit of money for you no um when it's a lot of effort a lot of time and of course money so if you are prepared to to do this to invest effort time money you can start to let's say you're building a startup otherwise after one year you can be bankrupt and you go but there's a lot of founders listening right now though that don't have five hundred thousand dollars sitting in the bank right and they're building fine startups they don't have to put in half a million bucks of their own money my question for you is where did you get that money from did you have a company before this that you sold or are you rich where did you get this money from no i'm not rich but as i told you when i'm saying investment it means also effort so it's a opportunity cost and of course if i'm having my question was how much money did you put in the business not how much opportunity cost did you put in the business how much money did you put in you said 500 000 is that not accurate this is not money this is not cash money investment doesn't mean only money okay i'm asking you though how much money you put in personally as a founder we don't know we didn't calculate it so my question is how where who was paying salaries for four years before you raised money last year this simple we didn't have salaries so how are you putting food on the table for your family um wait again if you have money if you have some some money and you can live two or three years without having revenue then okay you can start to build a startup otherwise you saved up so you saved up a bunch of money from a former job or whatever and you went without pay for three or four years while you were building yeah exactly you can do this and was it we were you the sole founder or how many people are on the team we are two co-founders and now we are seven uh full-time employees okay got it so and you guys as co-founders did you split equity evenly at the beginning 50 50. yeah usually this is the the model well i know usually it is that's why i asked i'm asking what you did though the interview is about you did you guys split equity 5050 yeah of course okay interesting um very cool what's next as we wrap up here what's next on the product roadmap you're trying to expand into new factories new product lines now what do you what's the next product release uh we are working on these virtual engineers which is a unique concept worldwide so we have already a few customers and uh we are building now we are working on this on this one virtual engineers very cool let's wrap up here vlad what's the famous five number one what's your favorite book the life of steve jobs number two is there a ceo you're following or studying yeah steve jobs and also um the guy from microsoft sai nadella number three what's your favorite online tool for building k factory rg tool yep but we are not using online tools only on sales for example we are using hubspot i i like hot spots number four how many hours of sleep do you get every night oh i'm trying to sleep at least six seven hours and what's your and what's your situation married single kids married with kids how many kids one one daughter and how congrats about and how old are you i'm 41 41 last question something you wish you knew when you were 20. uh no hard to say i i cannot respond well think about it something you wish you knew when you were 20. really it's a good question i don't know to respond right now maybe to to have some uh some knowledge about how to build a business uh and to to have in school some uh some knowledge transfer regarding this from from real entrepreneurs guys k factory is helping manufacturers product lines et cetera digitize their warehouses and factories about 12 customers today they're doing 24 000 a monthly recurring revenue up from 5 000 a month just a year ago they raised about a million dollars to date the co-founders still owned more than 60 percent of the business they split at 50 50 at the start looking to scale now they've gone from two people to seven people as they get ready for their next product line release which is digitizing these engineers and workers lad thanks for taking us to the top thank you one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something 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 sas 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 that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 got to push them away click the thumbs up below to counter them and know that i appreciate your guys support all right i'll be in the comments see ya