How Kudoway CEO Fardad Zabetian grew Kudoway to $3.7M revenue and 150 customers in 2024.

hello everyone my guest today is fardad zabedian he is the visionary entrepreneur and founded and placed another two companies among the fastest growing businesses in america over his tenure he's also expanded to key markets over europe and asia he's no stranger to big challenges in 2012 he's part of the design and rollout of a complete makeover of the united nations meeting facilities including general assembly hall in new york he also played a key supporting role as a high-end equipment provider at various iterations of the imf world bank annual meetings and several european institutions with his current company kudo fardad now takes the meeting experience beyond the room to connect business and people in true borderless fashion without language or geographic constraints for dodd you ready to take us to the top i am all right thank you for having me so people are going to hear this and go okay this is zoom how's he gonna how's he gonna take market share from zoom it's zoom meeting united nation so it's a combination of i don't know if you've ever been on a multilingual meetings when you select the language and the magic happens and you listen to a live interpreter in your preferred language so that's what we're bringing into the online meeting space so um what has been doing uh what what i've been doing in the last 18 years mainly for focusing on technology within the room for people to attend the meeting and speak their own languages with kudo we're basically bringing this experience to online space for decentralized meetings for businesses they can pitch their product they can do their meetings in their clients languages so what happened in localization and people started translating their website and so on we think that for live meeting for live session it's as important to communicate with people in their own language and do you charge on a peer play sas model yes so we have a subscription plan and also we have prepaid uh hours uh people they can subscribe depending on their use cases depending on how often they have multilingual meetings and uh get uh the access to the platform we have about 700 um qualified conference interpreters simultaneous interpreters on the platform uh that they're available to support the clients of course we are on the technology side and if the client has their own interpreters they can use their own uh conference how do you pay these 700 translators i assume they're not on your payroll they're not they're not and they're being paid by the client directly or as a package as part of the subscription well why do they wait around if they're not sure when their next call is going to come in they can't obviously do this full time these are uh these are freelance interpreters that they have their basically day-to-day traditional meetings of going on site to a meeting and support those in-person meetings this is an additional opportunity for conference interpreters to support meetings that are not within their geographical kind of outreach by being by being present doing more events on a global stage and supporting events uh that are not within their let's say new york or geneva or brussels okay and on average what are companies or customers paying you per month or per year to use the technology we launched the product uh only in september of last year so most of our uh clients are in the on the prepaid hours of 30 hours or so but on average the clients are paying us about twenty five hundred to three thousand for for for about uh ten fifty ten to twenty hours of usage a month yes okay and then so you launched in 2018 um when did you write the first line of code for the company um so january of 17. okay so it took us about uh 20 months actually to get the product where we wanted to be for launching the product how much did you invest in the product i mean literally how much money had you spend before your first dollar of revenue so um i personally invested about a million dollar myself in the company and then we brought in a small friends and family around uh now we're basically raising seed rounds okay but again same question so you how much of that money did you actually spend to build the mvp oh uh all of it so i spent about a million dollars to get the product ready okay so all the angel money is still in the bank uh no no no this is until september then we raise our friends and family money in september i see uh until now yeah okay so how much total have you raised to date uh about 1.3 million that's not including the million from you correct uh no no sorry uh about 1.6 million okay does that include the one million yes that includes the one million so 600 000 friends and family and you're raising now yes why isn't that why is now the right time to raise um we actually had a lot of tractions in the market so we we have about 30 plus enterprise clients already sign up and we need to bring extend on capital to scale so at this point we are uh raising our seat round um and we're raising four million so we're actually in the midst of uh fundraising at this point okay how many you're raising for and what valuation do you hope to raise at we're raising as a note not as a cap 15 million okay how do you think about that i mean does it really matter or do i mean you have a lead on the four million that agree to these terms we have actually a couple of uh we started this round uh recently so we have a a a very good uh conversations going on but we haven't decided who wants to lead okay there's no lead yet and in terms of skill 30 customers paying 2500 bucks a month that means you're doing 75 000 a month right now on revenue is that right we actually have two different products we have uh kudo for live event and kudo for web conferencing on cuda for live event we're also making more transactions we've generated we generated about 350 000 so far uh um last month what was total revenue recurring revenue i don't have that number right now for last month okay how do you not know that you're in the middle of fundraising i i find it very difficult i have them i have the total revenue 350 as of today since we launched the product but exactly last month i don't have the uh yeah but the whole way a sas company is is valued is based off ar multiples which means you have to have revenue tied to some timing metric which i'm choosing to use months i find it really hard to believe that you're going out trying to raise a 4 million on 15 without knowing what your ar run rate is that's correct but again we're not uh our subscription plan uh through the sas model uh that we're raising money uh it is just launched the whole subscription plan for people to come in and sign up for annual so the sales cycle for people to do a multilingual web conferencing for us they first start with a prepaid hours to try the system to try out so we don't do free pilot tests we always do prepaid hours so these 30 hours 40 hours it takes time for them to get onto subscription plan so as far as aor currently uh we have uh we have about 12 000 a month uh confirmed uh arr okay so just to be clear you have 30 enterprise customers that have bought essentially a number of hours to use on your platform on top of that of those 30 some portion of them have converted to your subscription plan to the tune of about 12 000 per month or 140 40 000 in terms of arr okay so two days across both those revenue streams in 2019 so far to date how much total revenue have you done we've done 2019 about 250 dollars okay and what portion of that is the subscription sas versus buying hours so about uh 220 or so it's uh buying hours and live events yeah so i mean is it when you look at the revenue stream where people are paying for hours is it pretty predictable do they do they pay for you know the same amount of hours every month or a little bit more so the usage increases uh so many of these organizations they have not been exposed to multilingual web conferencing so for them this is brand new solution usually what they do for this all hands meeting or end of quarter meeting they get a webcast but then they provide different phone numbers for people to follow the meetings in different languages but they cannot participate they can only follow the meeting with kudo we give this complete transparency so the ceo can get on a kudo call and everybody can see live follow the video and select the languages of their choosing and also participate in so they can ask a question in spanish french chinese and so on so basically when we position the product the usage we see about five to ten percent increase month over month and then there is many departments then they have education department communication department compliance and training department is all becoming part of a user base within that organization got it so i mean take me back your 30 customers today how did you get your first five um so kudo is my third company they're prior two businesses uh they are also focused on multilingual meetings but from the hardware aspect from a hardware position so we already have a lot of existing contacts within the organization that they're using multilingual meetings but in the room system and mentioned you mentioned earlier during my introduction uh multinational organizations uh united nations imf world bank many many european institutions as well so uh us launching a new solution for them is addressing their needs for okay so you sold you who specifically did you sell to was your first customer our first customer was the uh a meeting of itu in brasilia and the second customer was a satellite company selling spaces for a...