Mopinion Revenue & Valuation (2021)

hello everybody my guest today is udesh janna ningsing he is the uh ceo and founder of a company called mopinion after finishing his master in business at the university of amsterdam he worked as a consultant in the digital space he's got a strong track record in digital marketing with a focus on customer experience before launching the company his co-founders and himself had their own web and app development agency the lack of qualitative website data inspired them to create in opinion before 2017 it was 50 consultancy and 50 software and then in 2017 they went pure sas and launched the first ai platform for digital feedback and a new version of the platform and business model was actually ready to take us to the top yeah of course go ahead all right so so first off help us understand when you guys are all in the when you're in the agency kind of work in and you're doing kind of one-off retainers one-off projects you have to sell every month right to actually have revenue there's no pure sas stuff when did you when was the moment where you said ah there's an opportunity to build a sas product yeah so before 2017 we were just selling like uh consultancy stuff so yeah like you say um our rates and all of that stuff of course in combination with uh with the license revenue but it wasn't like 100 sure pure sass so what we saw happening was that one of our competitors they uh were offering uh a product but we thought hey we can do this better because they only focus on one part of the whole feedback spectrum only data collection we were like well it makes sense if we can come up with a platform that can actually turn that feedback data into useful insights so we started developing uh the current platform and launched that in 2017 uh sas platform right yeah this house platform and that's why we switched the whole business uh from uh what it was to what it is today so um selling uh uh subscriptions uh yeah the whole sas thing basically so a lot of people that are building an agency have issues switching to peer play sas because they have to essentially give up the agency revenue to focus their time on the sas help us understand i mean how large did you grow the agency to or was it actually fairly small i mean was it doing more than a million bucks a month on the agency before you switched or what no i was below a mill and also because we were already doing uh 50 technology so we had the knowledge of software and that was also of course what we liked most um and i guess we invested quite a lot of money in redeveloping the platform from scratch so we also had a race like an early stage around in 2016 and everything was just focused and centered around uh relaunching the business so how much have you raised to date um so so far we uh up to date we just did a small early stage round of half a mil and this year we'll go for a series a round so we're actually working on that now so total raise to date is how much uh half a mil oh it's just that okay half a million got it and then yeah and then take okay so take us back 2017 you launch and then what are customers paying for this on average per month yeah so average deal size is uh i would say between three and 4k uh annual and uh of course you have like the the the the the depends on a couple of uh variables so the more uh bigger customers they pay up to seven to 10k annual and then the smaller ones they pay anything between three and uh uh let's say two and five k yeah um and also in 2017 we launched something new so basically the monthly subscription plan before that we were only offering annual uh contracts and we were still doing uh consultancy um but in order to generate more leads we said well let's also uh come up with a monthly plan and see how that works and that's actually working uh working quite well in terms of uh so how many how many customers are yet today so currently we have i think around 220 uh paying customers worldwide so we're not only focusing on the netherlands of course and actually uh 60 of the revenue is coming from countries outside of the netherlands okay that's quite an interesting thing so if i take 120 of those customers times a 3 000 kind of acv on the low end that's 250 bucks a month you're doing what about 30 grand a month right now um in terms of uh mrr so i think um or you can annualize it annualized it's 360. yeah so so this year also we started focusing on some um well basically half of 2018 started focusing on launching some large enterprise deals so those are like the bigger the bigger deals and actually that is uh adding a lot of uh meat to uh to our our ar so the pro the forecast for this year is well it's not the forecast what i just want to understand the baseline where you're at today so you're if you have 120 customers at a 3000 ac today that means you're doing about 30 grand a month so we have um the 120 customers i think uh i think i think let's say 10 10 or that are enterprise clients and they pay you more and um so you could we can solve this really easily so what's a what's run rate today run rate today well i guess what we're doing at what we're working on focusing on this year is hitting the two mil you know what are you at today and that's what we're heading at so that's that's quite a yeah and for us ambitious ambitious focus but uh i'm pretty convinced that we get there and now we're up to uh 1890k in the mr and um so i guess on average you could say it was growing on i think 80 percent something like that and ar yeah yeah so just do this just to be clear so you're doing about 90 000 a month today across 120 customers that pay somewhere between 2 000 and 10 000 a year in terms of acv and you're hoping to basically double that or up to 2 million an ar by the end of the year yeah that's the challenge that we have for this year so in terms of in order to get that we also uh of course expanding the team raising another round and focusing a lot on uh uh yeah the whole lead uh bottom and top of the funnel so yeah it's quite exciting times that we're in now yeah just to be clear though i wanna i wanna i wanna pinpoint this down i mean you're not really doing these smaller two to three thousand dollar acv deals most your deals are nine or ten thousand dollars a year well that's something interesting that we just found out that actually the would attract a lot of small companies but actually we also see that our users are mostly at the bigger companies and then we attract them with a with a smaller price plan once they are in we are doing the upsell and that seems to work really well and um i think also now the whole feedback market has gained a lot of interest because recently um one of the qualtrics they got acquired they're not like a direct competitor of ours but they're definitely uh doing some things in the space that we are in and a lot uh and more things but because of that acquisition they got we have now a lot of interest in this in this market so more companies now are actually looking for tools such as opinion so um and that's also the strategy for this year to have more uh sorry just i don't mean but to be clear i mean he's doing they're doing a quarter of a billion in arr and they'd raise about 400 million i mean they do so many things any there are thousands of companies ceos that can say yeah we're in the space of qualtrics and the eight billion dollar acquisition is going to help us too i think what they're doing uh because of that the whole customer feedback and customer uh analytics market has gained a lot of uh interest so yeah i think i think i think that's fair i think that's fair um me understand growth today so if you're at 90 grand a month today in terms of in terms of monthly recurring revenue where were you exactly a year ago um well 2017 we we launched it no just just a year ago so today it's january 2019 and january 2018 what were you doing per month um we were around i think uh so we grew this year 80 so was that like 20 30 and uh our i think we were like uh yeah around four or five hundred in uh in our and then we doubled it this year sorry that was really complicated just to be clear if you said you grew 80 over the last 12 months you're at 90 000 a month today that would mean you write about 50 000 a month a year ago january 2018 is that accurate some something around that yeah okay i guess so okay well what do you mean you guess so what'd you grow it over the past 12 months yeah i'm just converting the whole euro dollar thing but i guess we also got it yeah we're right now we're pretty close in terms of the exchange rate not a huge difference yeah i guess oh yeah yeah so we still have a lot of uh uh uh uh challenges ahead of course what's up what's the team size today uh team size now currently i think we're running with a team of uh 17 peeps in total and remote or is everyone in person in person yeah where uh so we headquarters in rotterdam and we in source so we have people from uh uh england france and us because we basically try to run everything um from rotterdam so we don't have off well we have office in london as well but we run everything from uh from here basically and let's let's kind of back here i want to understand the breakdown on the team how many of them are engineers versus marketing sales and onboarding um engineers uh i think now six and then we have a sales team of uh five we have some support uh customer success and then we have like uh support roles like uh office management okay and uh and marketing tree as well that's interesting so about so about 30 of your team is actually sales that's interesting um walkway through churn today what's churn so actually the uh interesting thing that we've seen is that because we just recently started with the whole subscription model um it's still not really clear what wait what do you mean recent you launched in 2017 right 2017 yes i mean you have all of 2017 all of 2018 and a month and twenty i mean that's you have 26 months of data yeah so i guess uh if you look at the absolute size of absolute number of customers that switch less so i think uh the percentage would be just around just uh around one percent um that's one percent logo churn per month yes because you do a lot of annual annually sorry just to be clear before you keep going i need to understand the numbers it's one percent logo churn per month no annual okay you have one percent logo churn [Music] that's annually lot of annual contracts and also a lot of the contracts that we start doing now annually they're also for like uh two years or three years it all all later paid up if someone signs a three-year deal with you do they pay all the three years up front we offer them a discount of course but they keep paying annual yeah so they pay one year up front so over so how many customers have you lost over the past year um so currently we are uh one i think uh five or six so okay so six customers lost and you have about 100 120 customers i mean insurance closer maybe five or six percent not one percent five yeah um do you track did you track these metrics udesh yeah yeah we keep track of them the difficult thing now is because we came from a consultancy business so we still had some customers coming in from that business and uh so and and they are still with us but um i'm still figuring out how we uh how we how we do that so if you look solely at the new business uh just this i'm only interested in the sas so just let me make sure this is clear the 90 000 a month you're doing today that's just the sas business correct yeah yeah that's uh that's just a sales business but basically all the customers we have now are all stars because all the consultancy customers we had not many i think it was like 10 or 15 we converted them all to uh solely licenses before they were also paying for uh for uh uh service fees and all that kind of stuff if everyone's on sas now when i why when i ask you churn does it seem like you have to think about it and roll around a little bit yeah because you're still figuring out how we how we uh uh keep track of that because the difficulty thing with us is that we don't have a linear sales model so what happened um uh in november for instance we had two two customers saying hey we're going to cancel a contract and then you come back in january saying oh no you know what we still want to keep using it so it really fluctuates so we're still figuring out okay so what exactly does that do to our churn if they say we're gonna sign off for uh uh november but then they come back in jan how does it work so that's the difficult thing and the challenge that we are at now like okay how can we really keep good track of those uh of those numbers and when is it exactly when is it exactly churned is it germany say hey we're going to uh uh a cancel uh but what happens when they uh come back do we count them as new business or is it existing business so those are interesting things that we are looking at now and that's also of course one of the things that we have to you know uh do really well now to keep track of those uh numbers we're running out of time tell me about your fully weighted customer acquisition cost to get a new five seven ten thousand dollar your customer what are you paying to get them oh that's uh that's a difficult one for me to answer wait wait come on you have to answer that if you have a five person sales team you have to know that because that's a big chunk of your monthly expenses yeah yeah so if you look at the total cost then um total cost for marketing sales uh would be around uh uh 20k so we look at it 20k a month 20k a month more yeah is that including the head count or just the direct paid spend no everything okay so everything and how many new customers you have of course we hardly have any costs for adwords and advertising because we have uh everything is uh running on uh on content and blogging etc so how many new customers are you adding per month um yeah like i said that's uh it's not linear so the one month we could be adding 10 customers and then uh so this one generally we added 10 new customers but february then it could be that we add one or maybe zero like i said it's not a linear uh um that's fine but how do you get in your fully weighted cac it would be really stupid for you to hire five sales people and not know what quota they have to hit to make them be profitable yeah well we look of course at the uh at the cost and we know what we need to head to uh uh uh to grow basically we said to ourselves we want to grow uh eight percent each month in mrr so what's their quota what do you put a salesperson quota at how much new ar do i have to close every month [Music] um yeah so eight and eight percent would uh represent uh 80k let's say in in new sales so basically we need to close as a team and we don't have individual quota we work as a team we would have to sell uh uh 80 uh say correct the goal is for this year new business so that's around 70k each month that we have to have to sell in new ar yeah yeah yeah so across five people that would mean each one's closing about fourteen thousand bucks in new york everybody has we have two uh lead qualifiers and then we have two uh uh two closers and um back to my original question though just because we're running out of time coming can you give me a direct answer here what is your full weighted cac to get a new five thousand dollar your customer sorry what is your fully weighted cac to get a new five thousand dollar a year customer do you know um um yeah so that data i don't have accurate right now okay because you're still figuring out exactly um um yeah it's correct it's interesting to me that you're spending 20 000 bucks a month on sales and marketing you don't know what cac is i mean that to me is a bit shocking yeah i know we know we know what cac is but what's going on yeah customer equipment because of course but you know what what is cap that's what i'm asking you you're spending 20 grand a month and you don't know what your cac is that to me is shocking your new business divided by uh uh your uh uh uh your new business course you find about a month every month yeah so you said in a good month you're gonna add 10 customers and your full weighted cost are twenty thousand bucks so twenty thousand bucks a month divided by ten new logos 2k yeah well for us i find it a bit difficult to work with uh uh uh crack frost because not sometimes we uh uh we have the pipeline and then it takes a couple like five six months to add yeah everything every sas company every you're not unique every sas company has that exact problem so like i don't understand why you're using that as an excuse every sas company has this exact same issue and people still know their cac i mean so look we're running out of time here and i'm clearly not going to be able to get you it's something you're still working on so on a good month you're saying you're spending 20 grand a month right all in marketing and sales in a good month you'll add 10 new customers right so that is essentially 10 divided into twenty thousand bucks your minimum cack is two thousand bucks and it sounds like in a month where you might be only add one customer your max might be twenty thousand bucks to get a customer exactly it really fluctuates so that's why it's a bit difficult to say what is the exact amount so that's why we look at it monthly well yeah but you don't look at a month because i keep asking you what it is and you can't give me an answer on what your full weighted calc is yeah because of course it's yeah all right let's let's let's let's move on um talk to me um talk to me in terms of the raise you're wanting to do you're saying you want to raise more capital how much are you trying to raise um so we're now looking for a round of between 1 and 1.5 mil and all of that basically is of course investing in the top of the funnel and uh uh improving the onboarding and what what valuation do you hope to raise that at considering you're doing about a million bucks an ar right now yeah that's a bit for me now i won't answer that because we're still in that round so don't tell me what you actually have don't actually tell me what's on the term sheet i'm talking you personally what would you hope to raise that pre-money valuation we don't hope to of course dilute more than like around 15 uh 20 max but yeah that's uh that's what how we how we are okay so that would be a 7.5 free money evaluation if you want to sell 20 of them 15 to 20 of the company and you're raising 1.5 yeah okay so you think you're at 7.5 million pre-money on a 1.5 raise and you're doing a million ar so you're looking at like eight or nine x do you think you can convince investors to do that let's see let's hope so it all depends of course on the growth that we uh showed this year all right are you profitable today or break even uh not yet okay like how much are you burning per month like 10 grand 20 grand um we're building up uh around i think uh uh 50 60 uh okay or so okay got it yeah all right very good let's wrap up with the famous five number one what's your favorite business book um my favorite business book uh well the last one that i read was uh uh oh good question okay so you can skip it no no number two is there a ceo you're following or studying um yeah many are you know elon musk richard branson the usual suspects right number three what's your favorite online tool favorite online tool uh currently at the moment i use salesforce quite often and that's giving me a lot of interesting insights number four how many hours i sleep to eat every night not many okay how many hours six okay and uh talk to me how old are you 39 and what's your situation married single kiddos both get married two kids and and uh last question here what do you wish your 20 year old self knew what do you wish your 20 year old self knew what do you wish was your 20 or uh okay yeah what are you wishing when you were 20 don't wait too long with uh launching your products just get out there and sell even if you just have powerpoint guys don't wait too long again mo opinion lunch in 2017 now 120 customers paying caught 700 800 bucks a month doing 90 grand a month in revenue up from 50 grand a month just a year ago they raised 500 000 bucks team of 17 in the netherlands burning about 50 000 per month that's net burn hoping to raise 1.5 million bucks on a 7 or 8 million dollar pre right now five percent low return annually as they look to scale all right thank you so much for taking us to the taboo dash all right nathan take care