Kudoway Revenue & Funding (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 brazilian satellite a brazilian telecom company sending satellite space in the us and trying to sell their space so we had like a uh days of meetings of uh portuguese and english uh how did that lead come in did you find them or do they reach out to you or what we saw basically this is all reaching out to us uh on the right how did they find you uh we are very active on social media on linkedin and i think we we also connect with a lot of connection within our team to users of multilingual meetings okay what do you mean active on linkedin so we we use uh basically we have a lot of followers on linkedin our personal contacts and a network and uh and also again we have from the previous businesses we have 2000 um enterprise clients already in our contact list so we send newsletters we make announcement about the new solution that we have what happened to that last company that had the 2000 folks on the newsletter list did you sell it or shut it down or what no no no actually uh the company is in business and it's it's it's growing it's called media vision and it's active how did you make sure to carve out the rights to email that list when you left well i i didn't technically leave i'm still owner of that company oh i see okay got it so you're a majority shareholder in that company so they're essentially two assets you're bringing together exactly got it okay very good all right what about churn has anyone started paying and stopped uh no no i cannot think of any and has anyone started on like a subscription price of a thousand a month then actually expanded just call it twelve hundred dollars a month or you guys too young to look at that yet we're too young to look at that okay and what's team size today how many folks so we have uh four people on our executive team and we have about ten people uh out of these ten people eight of us are uh programmed basically uh technical team coders so hold on fortnite start with the start with everybody so what's the total team size 14 people and then eight are technical uh eight of our technical yes eight of eight of eight of us are developers basically very cool okay now obviously you're growing the company i'm curious how aggressive you're being to drive growth are you talking i assume you're burning capital are you burning call it 10 grand a month or 100 a month or a million a month how aggressive are you being oh we're we're burning about a hundred a month now okay and i mean does that make you are you comfortable there can you sleep okay at night or does it make you nervous or what i've done this a few times before uh this is first time actually i'm doing just anything in software or sas so it's been brand new experience for me and i love it right but the opportunity is so enormous compared to the hardware approach at the same time there is more risks that you take but but this is this is my third third business that i'm starting so i feel very comfortable uh there are a lot of interests from investors to to join join our journey we have a very unique vision bringing our experience from what's being unique and only available to diplomats and governments and kings and queens and so on making this affordable and accessible for businesses you know by the way i think everyone will understand the product that's not the question i mean i think that's i think it's a great vision um help me understand cac so i mean to get a new 2500 a month customer what are you willing to spend to get them yeah so uh you know that's another thing i don't have the answer for it it's too early yeah yeah yeah okay all right let's wrap up here with the famous five number one what's your favorite business book actually i'm i'm uh reading a book right now about uh uh sas sales model so uh i i just started it is it like predictable revenue no no no it's a i just started i can't recall the name sorry that's okay sas sales model number two is there a ceo you're following or studying uh a few few months definitely i'm i'm following uh of course i'm following mark zuckerberg i did by the way his first keynote in 15 languages for the first time for the fa conference so that's one of our very facebook a customer yes so we did the first time mark zuckerberg keynote speaker for fa conference in april of this year live into 15 languages very cool all right number three what's your favorite online tool for building your company uh online two for building my company as far as well i'm i'm i'm using uh slack all the time so if that's considered online first number four how many hours of sleep to get every night i get eight hours good night that is good and what's your situation married single kids married two young kids and how are you uh how old are they you how are you oh i am 45 years old last question what do you wish your 20 year old self knew i am very happy with back when i look back with my 20 years old so it's not about is there something you regret it's just something a piece of information you wish you knew i wish i could start getting into software quicker earlier guys kudo think of it like zoom meets the imf so easily give online presentations across multiple languages all at once they've got 30 customers right now about 30 000 a month in revenue scaling up from nothing a year ago because they just launched they spent about a million dollars on their mvp today 1.6 million raised burning 100 000 per month a team of 14 people hopefully raising right now looking to raise 4 million on a 15 million cap we'll see how that turns out in the meantime for dodd thank you for taking us to the top thank you so much