How Legasisservices CEO Suhas Tuljapurkar grew Legasisservices to $5M revenue and 500 customers in 2018.

hello everybody my guest today is jaideep aquila romani he is the ceo of a legacist a market leader in legal and compliance solutions he's an executive program graduate from stanford university and repatriated to india in 2012. he has 21 years of experience and has held leadership positions with organizations like thompson reuters he holds a patent in ai and is a hobby macro economist jaideep are you ready to take us to the top yes nathan let's get it going all right so tell us about the company what does legacist services do and how do you make money it's pretty simple legacy services offers solutions in the compliance management space to companies that would want a sophisticated and a system to manage all their compliances right from [Music] regulatory compliances to internal compliances and we offer a software that allows them to track all the compliances that they have to adhere to as one part we kind of go in and help them with the regulatory mapping it could be across three thousand laws not now that all laws are applicable to every business and then our software allows them to track it on a regular basis with the right kind of intervals and the notifications and then we continue our services with regular updates on any regulatory changes so that the business doesn't have to worry about new educations or new updates on the law so we offer them a full package and we charge them on a one-time basis or on a subscription basis we've got two billing models so when you look at your revenue over the past 12 months what percent is from pure sas versus one time so at this stage the markets that we operate in are primarily uh operating on a one-time model and we are witnessing a significant shift towards the sas based model as uh the new economic companies are embracing our solutions so in the last 12 months i would say the breakup is roughly between 85 percent one time and 15 sas but the number is going to shift towards the sas model in the coming years got it and and so let's just talk about the sas model for the rest of the show just because that's what my audience is really focused on um when we just look at the sas company what are people paying on average per month to access this technology the software that you've built so we've kept the model uh very simple um roughly about say nine dollars per user per month and we do not distinguish between the type of users so whether you're a general counsel or a company secretary or a regular compliance user or someone who's just kind of reporting the compliance of the system it doesn't matter it's a it's one price across all user types per user per and when did you launch the company what year so uh legacies as a business uh has been around for the last 12 years but last year we acquired this sas based company which is called comply global and that's been around for two years now and i'm the ceo for both legacies and the company that we acquired okay so since 2016 again just the sas side of the business how many folks are now paying for that service or that software we've got about a dozen clients and on an average each client would have a user base of say 20 users depending on the size and the nature of the business that they have okay so 12 organizations using you with 20 seats each of which they pay nine dollars per seat that would put you at about two thousand dollars per month right now in revenue just on that software business is that accurate that is getting okay and that's 15 of your total revenue so you can multiply that times about seven to get your full kind of services plus sas revenue of about call it fifteen thousand bucks a month or annualized about 180 grand is that accurate uh well no because the one-time fee also follows up with our annual maintenance contracts so that's the component that's not in your maths and when we add all of that up the revenue is significantly higher than what you have because the that the traditional business that we've had has accumulated a lot of annual maintenance contract over the years so that has become a substantive part of the revenue okay when you told me 15 earlier is pure sas did you you did not include the services the annual renewal services and that [Music] i know um i answered that question from a sales perspective so we still have the amc business sitting on top of that got it so when you add your recurring revenues whether it's a maintenance contract that renews annually or the so they're paying for your software platform you know we know the software is 2 000 bucks a month add it all up though what's the total recurring revenue uh well i could give you a range um we are somewhere between five to six million dollars all put together each year okay and that just to be clear i don't want to include any one-time licenses not not that revenue but if that license you then upsell a recurring annual fee i'm what i'm trying to understand is how much of the revenue is actually recurring so if you're telling me you're doing about five you know north of five million bucks a year that would mean that you know monthly you're doing about four hundred thousand dollars in recurring revenue between the sas platform and the annual maintenance agreements is that accurate yeah that number would be accurate okay so you have significant kind of uh uh maintenance contract revenue then okay you know four or five million yeah okay and and what are you servicing there so what are people if you have kind of call it you know you said you had 20 customers right so if you have 20 customers uh and and again that kind of revenue per month that means they're each paying you maybe like 15 20 grand a month for maintenance what kind of maintenance are you doing no no um so we have a very wide customer base our solutions are not that expensive uh when it comes to the one-time fee uh the annual maintenance could be something about 20 to 30 percent of the one time fee but uh we have a wide customer base that we've acquired over a period of years so that kind of adds up but you have 20 very cost effective solutions you said you have 20 customers though right on the sas solution okay all put together we have about 500 customers in in india which is the primary market we serve today and we are we also serve customers in 44 other countries but they have strong links back to india as their primary market i see okay so 20 pure sas that line does about 2 000 bucks a month but then you have another call it 480 500 customers where they have all paid one-time fees but they have a very strong recurring component of maintenance contracts and that act which is about you know 5 million a year or 400 grand a month 400 grand a month divided by the 500 customers they're each paying you about 800 900 bucks a month for maintenance not 20 grand a month right i see okay very good all right more about your back story so you launched it in 20 well you acquired the company in 2016. were you also running the prior company as well so i joined this business uh about three months ago uh in fact it's exactly 100 days today congratulations thank you um prior to that i was associated with this business as a client and prior to that as a partner so i've been familiar with legacy since its inception and comply global the company that we acquired we kind of knew about them uh even during their inception stage i mean the market in the compliance solution space and the emerging economies is uh very very small so there aren't too many players most of the most of the players kind of set them up self as a niche player so we kind of know each other so we knew comply global from the time they kind of conceived it and when we felt the movement was right to kind of have a conversation [Music] we kind of sat across the table and it was a very easy one we had the domain expertise and they had the sas platform so it was easy management what does growth look like so if you're doing 400 000 a month today which is about a 5 million run rate where were you exactly a year ago so um we were more or less in the same zone a year ago because the indian economy had some strong headwinds in terms of regulatory changes especially on the taxation side i don't know if you've been following that market very well but the country just went through a massive tax reform where we kind of abolished a dozen types of taxes and just replaced it with one tax so most of the businesses were busy with that transformation so the compliance budgets kind of took a little bit of a back seat and we now coming out of those headwinds we are looking at strong double-digit growths uh starting 2019. that's great and have you guys raised capital are you bootstrapped so um the initial capital that was raised uh was when legacy was initially formed and since then there has been very little capital addition but now in 2019 we will look at a significant fundraise well how much total capital raised to date though including the little stuff early on i think all put together i mean not be correct with my numbers because it was many many years ago i suspect in the range of say two million dollars or so okay that was equity though right they're all on the cap table right yeah okay and when you say you want to do a big round coming up like how much do you want to raise so we've set our sights on about five million as a bridge round before we go in for bigger rays and we would like to use that capital for funding some of the product development and sales expansion and just...