How Oases Technovations (Emgage) Reached $240K ARR and 130 Customers in 2023 (Interview with CEO Surendra Varma)

Introduction and Company Overview

Nathan Latka

00:00Guys, engage. Work is your full suite HR tool, especially if you're based in India. Surendra is growing quickly, $8,000 a month in revenue a year ago, now $20,000 a month in revenue. He's been very capital efficient, just a $100,000 in a pre seed round raised where he sold 20% to angels. His team is 44 today, 15 engineers, five quota carrying sales reps as they look to scale to be your, again, full applicant tracking system, payroll management,

00:23the full life cycle of your employees, he'll help you manage it. Hey, folks. My guest today is Surendra Varma. He's an HR professional with twenty years of experience in the field. He's worked extensively in HR policy design, automation, strategic HR, business partnering, and all sorts of roles. He's now building emgage. Work. That's the URL. It's a smart virtual HR management platform. Alright. Surendra, you ready to take us to the top?

Surendra Varma

00:46>> Oh, yes. Yes, Nathan. Thank you.

What Emgage Does: Virtual HR Manager Explained

Nathan Latka

00:48So should we think of you like an applicant tracking system?

Surendra Varma

00:52>> No. It's not an application tracking system. So it's a virtual smart manager, virtual manager, which basically does anything or everything post recruitment. So, it primarily takes care of things right from onboarding till the separation piece. Primarily something which an HR operation guide us right from, say, helping you to onboard people, getting the induction done, managing leave attendance, employee health desk, query management, payroll, confirmation processes, appraisal coordination, and the separation management is something

Nathan Latka

01:27So you're more like remote.com then. It's your full stack, start to finish.

Surendra Varma

01:31>> Correct. Correct. Correct.

Nathan Latka

01:32I see. Okay. Give me the backstory. When did you launch the company? What year?

Surendra Varma

01:36>> So I've been into entrepreneurship for almost ten years now. I started with a recruitment firm, which was primarily a services firm. Emgage started in 2018 because my first half of career has been working with a lot of corporates, know, mid sized building organization. And being a Founder as well as being HR, I realized that there are common problems that every organization goes through, specifically all the startups and MSMEs, right? Most of these companies, either 70% of

02:07>> MSMEs do not have their own HR department, right?

Founding Story and Launch Year

Nathan Latka

02:10Well, Surendra, I just want to let me just stay focused on your story for a second. So you have a service, you have a surface consulting company, you launched the software in 2018, fast forward to today, what's the average customer paying you per month or per year to use the technology?

Surendra Varma

02:26>> If I talk about you know, INR, it is 1.2 lakh per per annum. And if we convert that into USD, it's it's something around around $1,213,000 dollars per annum.

Nathan Latka

02:45So if someone's paying you $13,000 per year, how many employees are they managing on your platform?

Surendra Varma

02:52>> Yeah. So currently, are managing more than 12,000 employees.

Nathan Latka

02:55Across how many companies?

Surendra Varma

02:57>> This is across 130 customer.

Nathan Latka

03:00Wow. Okay. And and walk me through, go back to 2018. Did you also get your first paying customer in 2018 or did it take you a year or two?

Surendra Varma

03:10>> So we got we launched our product in 2018 beginning and we got our first paying customer in mid of two thousand eighteen.

Nathan Latka

03:18How did you get that customer? Tell me that story.

Pricing Model and Average Contract Value

Surendra Varma

03:21>> So it was it was basically a friend who was facing a challenge that, you know, the person the the friend didn't have he was running an IT company and he didn't have an HR department. And he knew me because we were working together in the last organised meetup. He said, I mean, why don't you help us in terms of managing the HR department. I really don't want to hire someone full time to manage because I really

03:41>> don't need someone to be full time. And that's how the whole story began.

Nathan Latka

03:46Yep. That makes sense. Okay. So you you onboard him. And then is your only pricing model charging per number of employees managed on the system or is there some other metric you charge on?

Surendra Varma

03:57>> No. It is it is per employee per month. The number of employees that we manage on the platform. Yeah.

Nathan Latka

04:02Okay. So 12,000 employees across a 113 customers that pay on average $13,000 per year, that would mean your monthly recurring revenue today is about a $135,000 per month. Is that about right?

Surendra Varma

04:17>> So I'm saying, you know, 13,000 per annum. Okay?

04:22>> Yep. So

Nathan Latka

04:23So a 113 customers times $13,000 per year would be 1,600,000 annually divided by 12 would be a $135,000 per month. Is that accurate?

Surendra Varma

04:35>> Not really. So we probably in terms of when I talk about our MRR is is around 20,000 USD per per month.

Nathan Latka

04:43Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

05:06your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:31get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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

05:53not 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, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

06:18going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, We're gonna go back to the YouTube video here in a second, but

Customer Count and Employees Managed

Nathan Latka

06:40if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into

07:06the interview. Okay. So which of the which of the metrics are wrong? Either your average ACV is wrong or your customer count is wrong?

Surendra Varma

07:15>> No. So I I assume that, you know, the per annum revenue in USD is calculated wrong. So,

07:28>> so if I go back and check it out, so it's going to be it's not 13,000, it is going to be 1,300, 1,400.

07:34I see.

07:34>> USD. Yeah. USD per annum.

Nathan Latka

07:37That makes sense. So you have a 113 customers paying something more like a $150 per month or $1,300 per year.

Surendra Varma

07:45>> Right. Right.

Nathan Latka

07:46Okay. That makes sense. So if you're at $20,000 a month today in revenue, where were you exactly one year ago? Do you remember?

Surendra Varma

07:53>> So we were we were almost 8,000 USD per month, twelve months back.

Growth Channels: Content and LinkedIn Outreach

Nathan Latka

08:00That's great. So where's the growth coming from today? You told us about your first customer. How did you get how are you getting customers today? What's your growth channel?

Surendra Varma

08:08>> So our GTM is primarily focused in terms of talking to founders, right? And, you know, we have an inbound. So we do a lot of content marketing. We publish a lot of knowledge articles around the HR challenges faced by startups founders in MSME. And that's how we primarily try to kind of, you know, give a lot of insight about how HR needs to get managed. So a lot of LinkedIn marketing, lot of email campaigns. We reach

08:39>> out to a lot of founders.

Nathan Latka

08:40What's your favorite LinkedIn tool for LinkedIn marketing?

Surendra Varma

08:43>> So it's a sales navigator, primarily to reach out to the right people.

Nathan Latka

08:48Yep. That makes sense. And how many folks are full time today on your team?

Team Size and Structure

Surendra Varma

08:51>> So we are close to 44 people team.

Nathan Latka

08:5444 people. Okay. Wow. And are you only servicing like, I know with remote.com, they actually have legal entities in every country, and then they're they're and they employ a record, but that's a lot of work. Are you only working with companies that are hiring employees in India, or can someone use you if they're hiring and paying employees in Canada and London and all over the world?

Surendra Varma

09:15>> Right. So we have customer base. So primarily it is focused on India, but we do have couple of customers. I would say 3% of our customers having an office in multiple, you know, geographies or multiple countries.

Nathan Latka

09:26And what's your model? Are you the EIR, the employer of record?

Surendra Varma

09:32>> Yeah. So we it's like so if if you understand PEO, which is Professional Employer Organization market, right? So we we kind of give you the platform and we also give you a virtual HR manager who is going to kind of ensure that your entire HR gets managed by that particular dedicated virtual HR manager. Of course, everything happens on the platform.

Employer of Record Clarification

Nathan Latka

09:52But Surendra, this is like a very it's a very direct and it's a very legal question. When when when if I'm using you and I hire an employee, are they signing an employee contract with emgage as the employee on record or are they signing it with me and you're just helping me manage payroll?

Surendra Varma

10:08>> So so we are an extended HR department. They have they signed the employee agreement with the the customer directly.

Nathan Latka

10:15Okay. So you're not an EOO. You're not an employer of record then?

Surendra Varma

10:18>> No. We are not. We are not.

Funding: Pre-Seed Round and Angel Investors

Nathan Latka

10:20Okay, understood. Understood. And talk to me about how you've capitalized the business to date. Are you bootstrapped or have you raised capital?

Surendra Varma

10:26>> So we have angels on board. Right? And these are the people who are my ex CEOs from my last organization. So there are two angels that I have on board. They've been recently been onboarded. It's been it's been a year and from the time that they've joined in

Nathan Latka

10:40So they invested last year?

10:42>> Last year.

10:42Yes. How much do they invest?

Surendra Varma

10:45>> So they invested almost 100 k.

Nathan Latka

10:47Okay. And most folks in their pre seed round are selling, you know, 20% of the company. Is that kind of what you gave them?

Surendra Varma

10:54>> Yeah. Yeah. Absolutely.

Nathan Latka

10:55Okay. Interesting. So you value the business at something like $500,000 a year ago?

Surendra Varma

10:59>> Right. Right.

Nathan Latka

11:00Was that the right move?

Surendra Varma

11:03>> Yeah. I mean, the the idea was not to get an investment, but idea was to get people they are not just an investor, but they are they are adviser on board. So so these folks have a background of of of creating a company and running it to taking it to almost $200,000,000 revenue in ten years. And I have worked very closely with them, where they were business heads and I was part of HR team. And I

11:29>> knew that this, you know, I need their experience to kind of help me scale up. So a lot of mistakes that I was doing probably with they coming on board, you know, if you see the surge in the in the monthly recurring revenue from $8,000 to $20,000 today, it's it's, you know, credit goes to these two folks. Yeah.

Sales Rep Quotas and Closing Activity

Nathan Latka

11:49That that makes sense. And how is your team structured? 44 full time. How many are engineers?

Surendra Varma

11:54>> So my tech team is around 15 people.

Nathan Latka

11:57Yep. Where are they all based? At Bangalore, Chennai, somewhere else?

Surendra Varma

12:01>> They are in Ahmedabad, which is so the the the state is Gujarat, which is near to Mumbai.

Nathan Latka

12:09Mumbai. Okay. Near Mumbai. Great. And do you have any quota carrying sales reps or no?

Surendra Varma

12:14>> No. We do have we do have full time five sales representatives.

Nathan Latka

12:19How do you set their quota?

Surendra Varma

12:21>> Yeah, so the quota is again, you know, bringing the monthly return revenue. So they'll have to ensure that, you know, there is a minimum commitment that every customer that they're bringing at least twelve months minimum commitment. And then the rest, when we onboard the customer, after that it is primarily the service delivery team which has to ensure that the lifetime value of a customer moves beyond twelve months too. So our average lifetime value for a customer

12:49>> is around two and a half, three years minimum.

Nathan Latka

12:52But you haven't been around for three years. You're just multiplying your churn by ARPU. I mean, that's it can that can be a we'll see if that turns out and pans out to be right. But I guess my question I'm asking is what quota? What actual dollar figure quota do you give your sales reps?

Famous Five: Books, Tools, and Personal Life

Surendra Varma

13:07>> So currently, you know, what we do is we we ask them to kind of add up anywhere around, you know, 7 to $8,000 PO, which is spread across twelve months. Mhmm. That's what primarily we we give them the quota.

Nathan Latka

13:25And you want them to do that once per month?

Surendra Varma

13:28>> Once per month. Yeah. Every month they'll bring this new. Yeah.

Nathan Latka

13:30So you want your five quota carrying reps to close one new $8,000 per year customer per month.

13:38>> Yeah.

13:38Okay. And how many of your sales reps last month hit that quota?

Surendra Varma

13:43>> So we had four people hitting that. So last month, we we kind of closed it almost, you know, 20,000,

13:55>> you know, PO.

Nathan Latka

13:58Yeah. So, like, three contracts at $8 a pop, something like $24,000 in new new new annualized business. Right. Very cool. Well, listen, we're rooting for your Surendra. We're out of time though for today. Let's wrap up with the famous five. Number one, what's the last business book that you read?

Surendra Varma

14:13>> I didn't get you, Nathan.

Nathan Latka

14:14The last business book that you read?

Surendra Varma

14:17>> I read the book in which I am currently holding is Multipliers.

Nathan Latka

14:22Yeah. That's a good one. Number two, is there a CEO you're following or studying?

Surendra Varma

14:27>> I follow Steve Jobs.

Nathan Latka

14:31Number three, what's your favorite online tool for building emgage?

Surendra Varma

14:36>> My favorite online tool that I like is there's a product called HiBob, which I follow. And there's something called Bambi, Bambi HR in in US.

Nathan Latka

14:46Number four. How many hours of sleep do you get every night?

Surendra Varma

14:50>> I ensure that I have at least seven hours sleep.

Nathan Latka

14:53Okay. That's good. And situation, married, single, kids?

Surendra Varma

14:57>> I'm married and I have two daughters.

Nathan Latka

14:58Two kids. And how old are you?

Surendra Varma

15:01>> Oh, the the elder one is around

Nathan Latka

15:03No. No. You. How old are you?

Surendra Varma

15:05>> I am 41.

15:07>> 41.

Nathan Latka

15:08Last question. What's something you wish you knew when you were 20 years old?

Surendra Varma

15:11>> I always wanted to be an entrepreneur.

Nathan Latka

15:14To start a company faster, Yep.

Surendra Varma

15:17>> Yeah. I did it when I was 31.

Closing Recap

Nathan Latka

15:19Yep. Guys, engage. Work is your full suite HR tool, especially if you're based in India. Surendra is growing quickly, $8,000 a month in revenue a year ago, now $20,000 a month in revenue. He's been very capital efficient, just a $100,000 in a pre seed round raise where he sold 20% to two angels. His team is 44 today, 15 engineers, five quota carrying sales reps as they look to scale to be your, again, full applicant tracking system,

15:42payroll management, the full life cycle of your employees, he'll help you manage it. Surendra, thanks for taking us to the top.

Surendra Varma

15:48>> Thank you, Nathan. Thanks for having me here.

Nathan Latka

15:50One 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 1PM

16:15Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big

16:38fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS 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

17:00for that @nathanlatka.comslashslack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And 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 got

17:19to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. All right. I'll be in the comments. See you.