How Knak CEO Pierce Ujjainwalla grew Knak to $18.3M revenue and 750 customers in 2024.

hey folks my guest today is pierce eugene wallace he's a career marketer who's lived in the marketing trenches of companies like ibm sap and marketo he launched knack that's knak in 2015 as a platform designed to help marketers simplify email creation he's also the founder of revenue plus a marketing operations consultancy pierce you ready to take us to the top let's do it all right so you came on back in december last year so about a year ago and told me that knack had passed about 600 customers tell me more about growth today are you adding more customers or expanding the historical ones yeah we have continued to grow our our business at you know over a hundred percent year over year we're just named one of canada's top growing companies where we posted over five hundred percent revenue growth over the last three years and so yeah we're growing within new accounts within our existing accounts we see a lot where we'll get into an account with you know one team there and it grows globally across an enterprise so lots of exciting stuff happening and for the those folks that don't know knack or mr horst interview together what are these customers paying you for describe your product a bit yeah so knack is a a a codeless enterprise uh campaign creation platform and so for everyone out there you know you all receive these beautiful marketing emails with the banners and buttons well somebody is coding those most of the time and an average marketing email is like 800 lines of code and so marketers well they're not developers they're marketers and so what that means is that historically they've had to work with developers they're really expensive and slow agencies to get this done and with knack while we're giving them the power back to be able to do all of this themselves and really unlock the creativity that they got into marketing to do in the first place and it sounds like again folks are using it you said 100 year over year growth is that true of the customer bases well so 600 customers a year ago means about what 1200 now [Music] yeah so we don't disclose how many customers we have but we do have hundreds of customers thousands of users all over the world and yeah i mean that we are replacing the status quo 95 of the time and so yeah when customers what changed man i get before you raise your bootstrap you come on you show your customer account now what your board says pierce gotta be you gotta be more conservative be less fun on interviews no more no more customer numbers no i think you had a speculated our customer number i did a long time ago but we've had a lot of changes with our business model you know initially like any founder we went out let's get as many customers as easily as possible so it's 99 a month credit card no sales calls now we've we've really shifted and when we're working with these large enterprise customers they want us to they want to talk to a sales person they want to get comfortable we have to go through procurement security all that fun stuff that you get to do with enterprise companies well last question on customer stuff so i mean when you say hundreds uh and then thousands of users so i mean do you think you break a thousand actual paid customers next year over the next 12 months so we're we are continuing to grow you know triple digit every year um we're really focused on helping all the marketers out there that's why i'm so excited about our race you know so pierce if you go 100 over the next 12 months you're basically saying if you keep on that growth directory you'll you'll break a thousand paying customers next year so we're we're all about getting every marketer to be able to to unlock that creativity that they have within them and that's why we're raising to be able to get to as many customers you're raising you're raising again or you're talking about the raise you just completed no no the one that we just did yep so so you and and so let's jump into that then right so you raised how much capital and is this your first tranche or have you raised prior yeah so we are proudly bootstrapped right up until our series a we didn't raise any money before then um and we just announced the 25 million dollar series a with insight partners why'd you do it pierce i mean you give up a lot i mean you just give up a lot right you're going from bootstrap to raise and this wasn't a little raise this was like you're definitely on the vc track now you have to make it work yeah you know like i said we're proudly bootstrapped up into the race and we had our year-end in the summer time this year and we looked at hey what do we want to do to continue growing the business and grow it as fast as we can i'm a very conservative person by nature and you know i think that's how we got here bootstrapping we didn't have to raise but we we identified about 50 people that we wanted to hire on our team to accelerate growth and if we continued to bootstrap and do it that way it would have taken a lot longer and we all know with technology time is of the essence and we felt like hey you know the capital markets are great right now it's very founder friendly and we're able to find a great partner like insight who can give us a lot more than just the capital they have a huge network great centers of excellence around scaling out software teams that are our size and it felt like a great opportunity that we can say no to what's team size today pierce we are currently 45 people 45 great which sounds like some aggressive hiring plans now most founders especially going out doing like a first raise like this at this size like this pattern if you're picking insight many founders will pick insight because insight many times will let founders take secondaries especially if the founders or early employees or early investors angels etc uh you know i've been slicking away at it for a long time you guys were launched i believe in 2015 right so you've been at it for you know six seven years um was all that 25 million going directly on the balance sheet or were you able to create some liquidity for early employees you know founders etc yeah we definitely took out some secondary i think to your point you know we we proved that we could build a good profitable business and it felt like a good opportunity to take some of the chips off the table not just me but i also felt like it was important and fair to let everybody in the company who had vested options the opportunity to sell as much as they wanted to i have to say it was a pretty emotional moment for me when like the majority of our team didn't sell anything because they believe so much in our mission and what we can do in our future here at knack did you recommend they take some off the table to do things like buy a home buy a car start a family pay off student debt like life stuff uh i i definitely encourage them to do that i i told them that i'm gonna personally be doing that and that you know it's fully their decision and i think yeah that was something that that really did get me emotional was just that you know they had the opportunity to to really take chips off the table and make a good amount of money but you know they're in it for the long haul and i think they see the potential that we have ahead of us how much of the 25 million would you and insight you would have been comfortable letting go to secondary obviously it didn't all do that because people chose not to sell but what was the maximum that you guys were comfortable with that i i that's something that i i can't disclose but i will say that in talking to a lot of investors and i think this is where we're you know other founders who are out there thinking about this the market has changed right it's no longer that secondary is kind of like looked down upon for us it was something we always wanted to go into this deal with it wasn't an option we put that on the table to every investor and none of them had any issues with what we're looking at what did you say when you were kicking off the process did you phrase out of something like um we want to take at least five million off the table or we want at least 10 percent of the round to be secondary did you phrase it as a flat number or a percentage like how did you set the early expectations for this yeah we had a percentage and a number okay so what if only one of those things hit so what if what if you said 10 but then the round was only 10 million so you only had a million for secondary versus you know five you know if you want to take five million well they were like they were together like yeah it was it was a number that was the percentage that we're looking for okay got it so so by default when you put those two things together you can back into what the round size would need to be in order to hit both the percentage and the flat number yeah was insight the highest valuation or did you not optimize for evaluation listen i think there's a lot of companies out there right now a lot of firms that i will give you the highest valuation but what we found is that those firms are really just about the capital right they don't come with all of the resources that an insight does so of course valuation is important and and insight was close to the top but we looked at the full package right like i said before we're looking to me like half of...