Mindee Revenue & Funding (2024)

[00:00] Hey, folks. My guest today is Jonathan Grandperrin. He's the co founder and CEO at mindee, an entrepreneur with a keen eye for technology disruption and addressing real world enterprise challenges. He has a decade of tech experience on his shoulders, having held the CTO title for thank you and ECTOR prior to joining mindee. Jonathan, are you ready to take us to the top? [00:16] >> Yeah. [00:17] Alright. So just to be clear, you said joining mindee. Are you a co [00:20] founder or you came in later? [00:21] >> Co founder. [00:22] Co founder. Okay. And what year was that? When did you guys get going? [00:25] >> Sorry? [00:27] When what year was that? When did you guys get going? [00:29] >> Oh, we started working on mindee, like, in early in twenty eighteen with two of my co founders, and everything really started in 2019. [00:38] Yeah. What do you mean by restarted? [00:41] >> Actually, at the beginning for the first year, we have been kind of trying to discover how the market works and what were the needs in terms of document processing in companies. And when we figured out there was a specific need on this area, we started working on the product in 2019. [00:57] I see. Okay. So tell us yeah. Tell us what the product does and and who you're selling to. Who are the customers? [01:02] >> Yeah. So basically, we help software companies build document processing automation features in their software. So our users are mainly software developers in general and also product people like product managers or CPO or VP products. And we give them the technological layer so that they can build very easily document processing features for their users. [01:26] Got it. And what are they paying on average per month to use your technology? [01:30] >> That's very depending because we have large enterprise as well as very young companies, but it's between a few €100 to to 10 to 12 k monthly. [01:39] Okay. But what that's a huge range. What would you say sort of your sweet spot is? Like, $500 a month or more like 5,000 a month? [01:45] >> Oh, between 1 to 3. I don't have the exact yeah. [01:49] The reason I'm asking that, now I can be specific. If someone's paying you 3,000, you know, US dollars per month, what are they getting for that? Is it based off number of API calls or something else? [01:58] >> Yeah. Based on the API calls as almost all the API companies. But, yeah, one page is 10¢ on the first pricing grid. And then the more you consume, the more you use the API, the less the marginal price will get. [02:12] >> So [02:13] at What do mean by one page is 10¢? Is that if I upload a document that's 10 pages long and I need that signed? [02:18] >> Yeah. One page of a document, like if you have a PDF of 10 pages, it's going to be 10 pages price. So 10 times 10¢, $1. [02:27] I see. I see. But you obviously care more about moving everyone to the API model. That probably is more effective. [02:32] >> Yeah. But the value, the unit of value of our product is the page, actually. So it's kind of really related to the number of API calls in the end because on average, a document is like one to two pages more maximum. [02:48] I just think about driving usage. It's it's it's a tricky thing to tie your upsell metric based off the thing you need found, like people to do to get value, which is the page. Because for example, if DocuSign charge per page, every time I did it, I'd feel a little bit negative because I'm going, do I really need to spend 10¢ to get this signed right now? And slowly, I'd look for alternatives and eventually I would [03:08] probably churn. How do you guys balance that? [03:11] >> For now, we we are not churn at all. So I don't think this is a problem for us today. In general, like [03:18] Well, what do mean no churn at all? How do you how do you measure that? [03:21] >> We have no we have no logo churn and very strong retention rates. So people are more using more and more the API over time than just dropping because of that. I don't think the pricing is a problem for us in the adoption actually just because of this digressive pricing grid. You know, if you make 10 ks calls monthly, it's going to cost you $800 If you have a volume of 25 k, it's going to be less [03:49] >> than that, like 6¢ per document. So we want to help our client grow and build the best user experience. [03:58] Yeah. I mean, you're talking about you're talking about retention, right? I mean, you have churn and there's expansion and there's net dollar retention. And usually API businesses like this, you look at Snowflake, you look at Twilio, look at SendGrid, they have really high net dollar retention of way above 100. Where are you guys at? [04:12] >> It's between 200 to 250% after So one it's that's great. That's the now something very good for our business. [04:22] So yeah. So the average a year a year one customer doubles their what they pay you in year two. More than doubles. No. Okay. But when you look at your full base, so you look at the last twelve months across your whole base, gross churn plus expansion, net dollar retention is what? [04:37] >> Yeah. We don't have churn at all in terms of usage. [04:41] So this is Jonathan, to be clear, when you say you have no the reason I push you on this, I find it very unless you only have, like, one customer, but I find it very hard to believe that there are zero customers that use you who last month signed 10 pages, and this month no one went down lower than 10 pages? In other words, your churn will be measured by a little downgrade in usage month to [05:01] month. You're saying no one ever uses less this month than the last month. [05:07] >> Okay. It happens, of course. Like, during the summer, for example, we have obviously lower usage, but people are how to say that? The extension is so much higher than [05:23] >> the slow of their usage. [05:26] The contraction. It's contraction and expansion. Yep. Yeah. That's what I'm trying to measure. Right? So contract like, you you might have 10% contraction, but expansion is so big. Expansion could be 90%. So your net dollar retention is still 180%. That's what I'm trying to understand. [05:43] >> Yeah. The net retention rate of 250% I was talking about is including the contraction also of the usage. Do I maybe I don't understand your question well. [05:52] Yeah, because you're giving me that net dollar retention of 250% based off first year contracts, which is easy. Someone go from a dollar to $4 and that's 400% expansion. The better way in how publicly traded companies track net retention is you look at your full base, your full installed revenue base a year ago compared to today. That's what I'm trying to get to, not just your first year customers. [06:13] >> I think it's the same. Like, we compute our costs monthly. So quarterly, sorry. So all the customers we had like one year ago and we signed during the last year quarter. [06:24] Yeah. It's okay. We can skip over. It's not important. I think the I think you give us a good lesson, which is you're pricing off number of API calls. Usage is going up. Some people use it a little less, but the expansion is so big it doesn't matter. So you have really healthy economics. [06:35] >> That's the key point. Yeah. [06:36] Yeah. Alright. Let's get let's move on from that. Let's get more of your backstory here. So you guys started writing the code in 2018. How many co founders are there? [06:45] >> Three co founders and one late founder. [06:47] Three co founders and one what? [06:49] >> Late co founder as well. Like, he joined us in, early in 2019. [06:54] I see. Did you guys just split 25% each? No. How did you have that conversation? Every founder has to go through that. It's a tricky situation. [07:02] >> It was actually very natural because I don't know. I don't even remember when we had this conversation. It was kind of natural to make the split. Like we came with a plan very easily and there was no discussion at all on this. So I'm not going to give you the figures on how this is distributed in terms of capital between the funders. But at the very, very beginning, we started with Mohammed, my chief of science, and [07:30] >> the split was done between the two of us. And then Olivier joined us the first month and he's the co founder as well, of course. And, yeah, yeah, everything is supernatural, yeah, between us. [07:41] Mhmm. But what I'm trying to dig at here is every cofounder team has to have this conversation. Right? So somebody owns more. Is it because they brought more capital, more experience, more like, take me into that conversation a little bit. Okay. No. I think we Just focus on you and Mohamed. Just the two of you at the start. [07:57] >> Thinking differently. Like, it was not my first experience as a co founder of a startup. So maybe it was important in the discussion at this moment, at this point in time. And just because of the role as well, maybe it's important as well, like the the CEO owns a bit more than the the other account from those, for example. [08:18] I see. Got it. Okay. So you know maybe a little bit more than everyone else because of these things? [08:22] >> Yep. [08:23] Okay. So you guys [08:24] get gone in 2018. Tell me about your first customer. [08:26] >> Do you [08:26] remember who it was and how you found them? [08:27] >> Oh, sure. An HRAS company HRAS, sorry, in France, one of the leader. They have approximately 1,000,000 users, I think, or maybe more. They're called Lucca, L U C C A. And they add an expense management solution, an expense management mobile application, and they wanted to improve the user experience when passing receipts. And we are using a company called ABBYY. I don't know the the English pronunciation for that, A B B Y Y. And and [08:59] >> they were not okay with their performances in terms of response time and accuracy as well. So we built our first prototype with this client and the benchmark, the solution we are proposing to them against the ABBYY solution. And it was our first client, like deployed in beta version maybe in March or May 2019. We have been yeah. They are great and fantastic customers and happy customers, I think. [09:24] Mhmm. So zero revenue your first year in 2018. The first year revenue was 2019. [09:29] >> No. We have been doing revenue because we we were selling, like, algorithm perception missions to make revenue. I wanted to bootstrap the company and not to raise too early. And that's what [09:42] So you're doing consulting basically to get to get cash early? [09:45] >> Yeah. And we decided to stop completely the consulting in Q4 twenty eighteen. [09:51] How much consulting revenue were you able to do to help bootstrap I the [09:55] >> don't remember. Like, a few 100 k maybe. [09:57] Okay. That's impressive. Yeah. That's impressive. Okay. So are you tell me more about funding now today. Are you bootstrapped from that or have you raised? [10:04] >> No. We raised 14,000,000 series a in in q two, q three this year. And we raised also a seed round in May 28 2019, sorry, of about $3,000,000. Mhmm. [10:21] And talk take me back to that $3,000,000 raise. Why did you need to raise that capital? [10:25] >> The seed round, you mean? The seed. Yeah. To build a product, like, have a very strong expectation in terms of product and building an API that can scale like everywhere in the in terms of r and d as well. We raised to hire people and and start selling and start start figuring out trying to figure out how to how to sell this to the rest of the world and to reach the product market fit. [10:51] Okay. So your first customer, obviously, you get consulting revenue $400,000 to $500,000 in 2018 to fund the business. 2019, you land your first customer, this expense management tool that you won in the sort of the bake off. How many customers are you now serving today? [11:03] >> Today, I don't have the exact number, but it's about 70, I think. [11:09] Seven zero? Yeah. Yep. Okay. And you told us earlier sort of the average ARPU might be like $2,000 to $3,000 per month. So that would put you right now, MRR wise, about 150,000 a month. Is that about right? [11:20] >> No. I think it's no. We don't we don't talk about the the actual revenues. So depending on the phase of the clients, we are are in the kind of the standards of a a series a company in terms of revenue, and it's less than that, I think. I don't know exactly. [11:39] When can you break a 150,000 a month in revenue? Will that be next year? [11:43] >> No. It's going to be very soon. [11:45] But Do you think there's sixty there's forty five days left in this or there's fifty days left in this year. Do think you can break it by the [11:50] >> end of We have a nice growth, man. Like, we are growing 15% monthly only with organic growth. So, yeah, that's not a We have a very strong fundamental in general and yeah. [12:04] Well, so if you're on track to maybe think, you know, break 150 a month, you know, pretty soon and you're growing, you said, 15% month over month, that means about a year ago. Like, how much MRR were you doing about a year ago? [12:16] >> I don't remember. And that no. I'm not willing to to to communicate about the the revenue, like, part. We decided not to talk about this. [12:25] So Well, Jonathan, just to be just to be clear, I'm multiplying numbers you So already gave you said earlier, 2,000 to 3,000 per month was an average customer and that you have 70 customers. We can just multiply numbers you've already given us to get revenue. So that's that's why I'm pushing here. [12:38] >> Yes. But you you don't have the growth of the customer, and most of our customers start with a very low revenue because they they just don't want to try to to go the solution and they are integrating it and then they expand over time. Like, it's a land and expand strategy we have, like, overall. [12:55] No. I understand. I completely understand that. But my question to you earlier was what's the average customer paying per month today? And you said 2 to $3,000. That's why I multiplied. Small [13:04] >> two. Yeah. Okay. That's a [13:07] what you're saying is the average is under that because the first year customers are paying much less before they expand. Yep. Makes perfect sense. Makes perfect sense. So you you do the 3,000,000 seed back in 2019. Why I mean, every time you do this raise, you're diluting the company. Right? So why go take 14,000,000 series a? Why do you need that capital? [13:27] >> The the main reason is expanding in in The US. We have flipped the company to US company in May. We were in the Y Combinator batch of winter twenty twenty one, and we are going to we are growing the sales team and the operation the operating team in general. So, yeah, it's time for us to expand and to go faster. And we are also specific needs in terms of R and D and technical teams as well. [13:54] >> So just hiring more people and expanding the teams. And it's a huge market in the end, so we need people to staff on any type of like part of the company, finance, sales, etcetera. [14:06] How many people are on the team today? [14:10] >> 27. 27. [14:11] How many engineers? [14:13] >> 20. [14:14] Yeah. Oh, wow. So very heavy engineering. [14:16] >> Yeah. We are developer too. Like, it's in our DNA. Everyone is kind of very passionate about developer and software development and data science. [14:24] Yep. That makes a lot of sense to me. And then how are you at so these 70 customers, how many of them you know, lot of people say they go YC. It's great because a lot of YC customers will sign up as your first customer. So of these 70, how many are YC companies? [14:36] >> Zero. [14:38] Why aren't any YC companies using you if you went through a batch together with them? [14:42] >> Yeah. Because I don't know. We are not really prospecting in this in this batch. That's a good question. Like, we we haven't been prospecting in the in the YC batch. We have more [14:55] >> yeah. I don't know what to tell you. It's [15:00] >> maybe the one that that many companies doing what we are the best in, like fintechs and neobanks and HRIS. I don't know. [15:08] Mhmm. Got it. Makes sense. So 70 now do you have any concentration in the of those 70? Is it, you know, government, tech or anyone else, or is it all over the place? [15:17] >> Financial services in general, like [15:19] I see. Yeah. I see. Interesting. Okay. Very cool. Talk to me more about your organic growth. How are you getting the organic growth? [15:26] >> Mostly inbound today with many different channels, but we how to say that? Referrable works well. We have built some kind of local presence in Europe and mainly in France as well. [15:46] >> Yeah, I don't know exactly. It's not we have many different channels like paid, outbound and inbound referral, word-of-mouth in general works well as well. And we are building a content also to to get more visibility into the Internet. And we want to be there when peep when developers are looking for the solution. So it's something that we have created very recently. We hired the director of developer relations, for example, which is responsible for building this content [16:15] >> and spreading the word out for about mindee in general. But, yeah, today it's inbound and word. Mass is the the best [16:24] Are you able to are you able to quantify those costs so you know how to invest this 14,000,000? Do you know what, like, fully weighted CAC is to get a $2,000 a month customer? [16:32] >> Not yet. We're too early for that, I guess. [16:34] Mhmm. How do you start experimenting around that and try and get visibility there? [16:38] >> Can you rephrase? [16:40] How do you how do you try and sort of mature there and try and figure out what that CAC is? [16:46] >> We have tried paid search. And as we we have kind of very long sales cycle, not long sales cycle because it's kind of low touch. But between the moment people are testing out the product and the moment they deploy for production, it can be like three, six months. And we need at least one year of visibility to try to compute those cost of acquisition, for example. And we tried something on the paid search acquisition channel that [17:12] >> we started in Q2 Q3, sorry, this year. So we don't have enough data to be able to measure that. I'm not able to tell you any cost of acquisition today. [17:23] Mhmm. I mean, I would argue that a lot of your cost of acquisition is tied up in the development team building things like this live test feature you guys have built. It's a great tool, high utility value. You send traffic here, people convert. Right? Yep. Do you have any other tools like this you're looking at building right now just to attract in more users? [17:41] >> No. I think it's it's really about contents. Like, we have you know, with the platform, you have very strong capabilities, and we can work on any type of document related use case. So I think it's about content and showing people that they can pass birth certificates, certificate of incorporation, bank checks, bank details, but like a lot tons of different documents. And, yeah, building those contents to have a visibility, more visibility when someone is looking for this [18:10] >> type of solution is the key for us, and that's what we are working on. [18:13] Yeah. Well, very cool. Hey. I wanna congratulate you. It sounds like this year was the year you guys broke that million dollar run rate as you look to keep scaling. And on that note, I hope you guys grow a ton next year as well. But let's wrap up, Jonathan, with the famous five. Number one, what's your favorite business book? [18:28] >> The Hard Thing About Hard Things, I guess. Yeah. [18:30] Number two, is there a CEO you're following or studying? [18:34] >> Jeff Lawson. [18:35] >> Yep. [18:36] You're not in any acquisition talks with those guys, are you? [18:39] >> No. [18:40] Alright. Number three, what's your favorite online tool for building mindee? [18:44] >> I don't have the answer for that. I think Salesforce has been something really important for us. [18:49] Number four, how many hours of sleep do get every night? [18:52] >> Between, yeah, seven to eight. [18:54] Seven. And what's your situation, Jonathan? Married, single, kids? [18:57] >> Married. No kids. Beautiful cats. That's important. [19:00] >> Cats. [19:01] And how old are you? [19:02] >> 32. 32. Last question. [19:03] What's something you wish you knew when you were 20? [19:08] >> Well, [19:11] >> no. I've never asked this question. I don't know. That I was going to build a great company, and I should be more self confident at this moment in time, maybe. [19:20] Guys, there you have it. Mindee.com. Called an API for understanding receipt data, other forms of data, document signing, charged 10¢ per page signed, or you move up and start paying per API call as you start to scale. They've got over 70 customers on the platform. They've scaled past a million dollar run rate, growing 15% month over month, just close to 14,000,000 series A this year as they look to scale with their team at 27. Heavy engineering, [19:41] 20 engineers. Jonathan, thanks for taking us to the top. [19:44] >> Thank you. [19:46] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 one [20:11] p. M. Central. 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