MagicBell Revenue, Valuation & Funding (2024)

hey folks my guest today is hannah mohan she's the co-founder of magic bell notifications inbox geared towards app creators before that she found out two other software companies support bee and moozy boo an online music community where she can upload and discuss songs she's a programmer maker transgender woman who speaks openly about her transition was the first openly transgender woman to participate in y combinator all right anna you ready to take us to the top uh i am yes thank you close out the support b story because i remember you coming on being so impressed with how big you grew that bootstrap did you sell it um well we're still running it and i have a team that runs it and i'm uh like not involved in the day-to-day operations but yeah we did in the business as of now okay tell me about magic belt what's it doing what are people paying paying you for so match email was an idea that came out of support be in fact because support we relied heavily on notifications email notifications and mobile notifications and i just spent so much time building notifications in support me that at some point i figured this actually seems like a more interesting problem for me personally because support me is a great business but i am an engineer myself and i always wanted to build an api product and so magic bell is the notification inbox and and then like a complete notification system for your product so within an hour you can have an inbox in your product you can have email notifications text notifications and we'll manage like you know click smart delivery so people don't get it twice or if they mark it red in one place it's red everywhere else uh the the entire kind of like modern notification experience out of the box that's amazing okay and what do you charge an average for this so we do have a pretty generous free plan kind of like plg i guess and uh our paid plans start at 99 a month yeah going all the way up to 1200 and then we also sell some custom contracts enterprise up market wow okay so that's a huge range i mean would you save this sweet spot as sort of 100 bucks a month 200 bucks a month something like that um so we are not very like open with the numbers here because we did raise some money and it's a different trajectory but i'd say the average would be something around like 10 000 a year or something like that and someone who's paying you 10 000 a year what are they getting is it a number of notifications number of seats a feature-based upsell what's the story so we don't think of ourselves as like a delivery provider so we price based more on the number of active users because we think that's how we deliver value to you by improving your retention and engagement within the product and so it's based on the number of monthly active users which is people who are notified or uh log in so the the listed prices are very much kind of you know every subsequent plan is more on monthly active users but i think you know our average revenue is more so because we also sell up market enterprise deals and there are things like infrastructure that's soft to compliant or a data warehouse integration or a support sla things like that as well so if i'm paying you 10 grand a year how many mus do i probably have if you pay us 10 grand a year then you're probably on our you know i would say the the pro plan and you would have about um 30 000 monthly active users so let's say a reasonably sized b2b app btp sas app yeah yep and put all this on a roadmap for me when did you officially like spin the company out of of support b when was like the launch date for magic bell yeah so i actually tried a couple of times really to you know uh separate from support b but i think like you know i got used to a paycheck from support b it was hard but finally we did it in october of 2020 and we launched pretty quickly in november 2020 on product hunt got a few paying customers and we got into yc uh in the winter of 21 and then it's been kind of like that path from there on that's amazing and the yc model is 125k for seven percent right yeah that's what we got yeah and i'm very grateful for it i mean no complaints that we didn't get 500 it's totally okay yeah yeah oh no i didn't know that was an option i was just curious what that was actually yeah yeah that's nice 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 going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to 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 of 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 founder path 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 your first couple customers in november 2020 via product time which is obviously fantastic um how many customers are you scaled up to now today um i would say like um it's about 100 paying customers yeah okay okay and so do you see this longer term you know is this going to be mailchimp it's going to be for millions of people or it's going to be for a thousand people paying 100 grand a year i think it's going to be somewhere in between a braze and a twilio like that's a really good analogy that's a really good analogy so if you i mean by the way maybe we should be toasting champagne right now because if my math is correct you just broke a million dollar run rate um i would rather not comment but thanks as she says with a big smile but for the audience my math is at a 10 000 acv on average that's 830 bucks a month times 100 customers you obviously get that 83 magic 83 000 month number but hannah we understand you can't talk about that since you've raised a little bit that's fine talk to me about funding though you've bootstrapped in the past why decide to fund this one it's just a different kind of problem i think like one of the things i did learn from bootstrapping was um who's driving clearly works but for certain kinds of problems and if you're solving like infrastructure problems or you know you want to upfront invest into building a solution and then get it profitable over the years it's uh it's just better to raise money and for this kind of problem it just made sense yep so what did you decide to raise we raised we ended up raising about 4.5 million last year uh in seed okay 4.5 seed and most people the seed rounds last year were selling 15 to 20 percent of the business were you sort of in that range um to be very honest i think a little bit more because we went through yc and i think it's also worth noting that 2021 was a pretty amazing year for fundraising but uh as women founded it wasn't like quite the same party like i think i was at a party but not quite the same party yeah fair okay fair enough fair enough um god it's going to be selling a little more than 20 but so somewhere between sort of a 10 and 20 million post money valuation though would be selling averaged out i would say yeah yeah yeah and what with that so how what do you think you need to get to in terms of revenue to go raise a competitive series a if you want to go keep raising yeah i think at this point i mean anyone's guess is like as good as mine i have no idea and so we are hoping that we can uh first break even we have a small team of how many um 11 people oh wow how many engineers besides you uh we have four engineers and we paid well so including you no including uh not even including my co-founder okay so six engineers total yeah i don't code anymore you don't you don't miss coding i do miss coding but i don't think i can quite code professionally anymore yeah i see i see okay fair enough so six engineers what are the other four or five people working on we have a marketer we actually do have an operations person because it it really helps i mean one thing i think i realized was like i was so used to half of my time was actually going into operations really in my bootstrap startup and so i figured this time i should create more time for actually building the business uh we have somebody to help us with customer support because we want to provide a different level of kind of service upfront and we have a product designer and we also actually have in the very early days we had a more generalist but brand like kind of brand leaning designer and it's it's actually been one of the contributing decisions that's worked out quite well for us oh my god the website's beautiful it's paying off clearly it's paying off yeah yeah so so what tell me a little bit how you went from three customers from product hunt to 100 customers today what's the go to market strategy here i mean unfortunately unfortunately it's really like uh mostly content and uh you know posting on linkedin things like that uh we've had some referrals but it's uh our product product launch and hacker news launch helped but it's actually largely been content i mean it's the funny thing is like those things really don't change that much yeah like we are like figuring out outbound but it's it's definitely not trivial well we're certainly rooting for you this is a heck of a story which is fun uh in the meantime though here hannah let's wrap up with the famous five number one last business book you read i can't recall actually but um actually built by tony fedele yeah yeah that's a good one number two is there a ceo you're following or studying i actually think uh jeff lawson is a great ceo and then you know launch darkly edit uh she's pretty amazing yeah yeah uh a great great story there too number three how many hours of sleep to get over here sorry what's your favorite online tool for building magic well besides your own um my favorite online tool one that i personally use but not with the team is roam research like it's kind of hell really helped me get more structured uh with the team i would say my team is starting to adopt hugo i don't know if you've heard of it it looks quite useful right now yeah yep number four how many hours of sleep do you get every night i actually aim to get eight i've been very diligent in fact one of those things like since the first couple of years are always so hard i'm trying to now restore my health and i bought this whoop it's a product i love yeah and uh like yeah i'm starting i'm very serious about it i don't always get it but that's what i aspire to that's a good one okay and situation married single kids uh still with my two cats two cats love that okay uh and do you mind me asking how old you are i'm 40. 40. 30 or 40. 40. 4-0 oh wow okay you look 30 so that's good uh last question something you always like that something you wish you knew when you were 20. oh my gosh it's um um well one i wish i knew i was trans like i mean that's just like the honest answer and i also recently got diagnosed with adhd so i wish i knew that actually that's been kind of life changing so really i i wish i had a business the answer but it's really like you know those are the foundational things that we share hey when you're bootstrapped and you run into business personal is business so that makes perfect sense to me guys support b bootstrap she had a lot of success incubated magic bell inside of it before spinning it out in 2020 now nyc raised 4.5 million seeds sold about you know north of 20 of the business to do that but scaling nicely now 100 customers you know these customers are paying 10 000 bucks per year for magic bells all in one notification system they do everything for you she's solving your own pay point scaling faster we'll see what happens next anna thanks for taking us to the top thank you so much 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 fund raise 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 gotta push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya