Oneiorevenue, valuation & funding

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is juha burghal he is a serial entrepreneur with a wide experience in i.t domain from software development to services and software solutions and sales he's got over 20 years in enterprise service management with an excellent track record of building and leading winning teams his personal goal is to tell business leaders to see information technology as an organic and critical part of their business not just hard to understand expensive techie driven cost centers all right who are you ready to take us to the top yeah all right so the company is somebody's company's called 1io.cloud help us understand what the company does maybe name a customer and how they use you um basically what we are doing we automate enterprise integration delivery and management jobs typical customer is an enterprise who is um outsourcing their id or is a managed service provider providing different kind of business services to enterprise customers so we help them to integrate tools and processes okay so name a customer and tell us how that customer specifically is using you uh for instance enterprise customers would be in adidas or uh sixth schindler so how are you guys like tell us about adidas yeah tell us about how they use you um they utilize one i o uh from internal use case when it comes to integrating uh for instance salesforce for customer service requests uh regarding uh tdpr for instance going to from customer service to it so that the i.t guys can uh automate the process between the customer service and themselves and then uh external use cases integrating their external suppliers to their centralized i.t okay so should we thank you kind of like a meal soft or a zapier or enterprise version of those um well those guys is definitely a enterprise grades integration platform uh typically used on the business applications like erp and logistics banking transaction based like enterprise wide whereas one io sits and it's kind of positions to the more like a business support functions like it hr financials guys like that who don't have the budget uh resource to really build set up the enterprise credit integration so we automate this thing for them okay now as last time we came on the show was back in december of 2018 man it's been it's been a while has anything changed regarding uh the average price folks are paying you you told us acv last time was about 50 000 per year on average uh i think it went a little bit up at the moment we are actually following up arpa um revenue per account so we are somewhere in 40 45 000 usd per year on average um per uh average average revenue per account per year not though per not per month right yeah uh per year yeah okay and uh founded the company in 2011 correct yeah and so what have you done i mean how are you finding these customers is it enterprise model or field sales model how are you landing new folks um well that's the thing that we changed last year since we had a quite extensive channel model uh quite traditional enterprise sales through the channel reach out for those large enterprises and do the certain changes over there we change to the direct model and start building productive growth strategy so um at the moment um the main channel that we are building it's it's a digital channel so we strongly believe that that's the way to sell to the to the individuals in the enterprises so um at the moment it's kind of a hybrid still so we have the the channel we have direct direct sales and the channel um depending a little bit on the region okay and so how many customers have you scaled to now uh we have 65 customers 65 customers okay uh so can i mean can i take 65 times that 45 thousand dollar ac that put you about 250 000 a month on average in revenue um it's around that yeah okay so in the in the usd the mrr is uh was last year december 2 30. two third okay okay that's pretty good yeah it's pretty good so you so you have just recently passed a three million dollar run rate we are getting there yeah okay very good now help us understand a little bit uh how the team composition has changed since the last time we spoke so last time you had about 15 folks on the team how many today uh 32 and what's the breakdown how many engineers engineers um i think now the engineering and r d something like 15 to 20 20 pips over there and rest is then the support customer success uh sales marketing um we also have now the central european re we study up operations over there so we have a couple of couple of guys in in central europe and uh now also in the us how many uh on the team how many sales reps do you have that actually carry a quota six six okay and who's leading that i mean this is something at your scale that a lot of founders they struggle with they're not sure how to get their their sales team motion going yeah i i can feel that uh i have really really good vp sales at the moment he is leading he is leading the show show so um i've been able to take that burden a bit on my from my soldiers to him so well that's obviously a nice nice luxury to have uh was there are there any mistakes you guys made early with your sales team that you've since figured out and fixed um i think the not maybe not in the sales team but it's related to the channel model i think we we try to try to you know stay in control over the channel but the most of the channel partners where they are quite big in the prices like fujitsu for instance and um of course um it's our relationship and our stake for their business is quite relatively small so um those were the mistakes i think we learned that uh in order to us to deliver the full value for the customers we need to to stay in control we need to lead the cases and then utilize the channel feed the channel rather than us you know uh hoping that the channel guys are doing their best for us yeah what do you pay the channels do you pay my kickback or affiliate fee yeah the same thing still um 30 for the first year's mr arr and then uh 10 for the next uh next couple of years okay well discount discount from there sorry when you say 30 year one and then 10 for the next couple years how many years is that 10 uh two years so three year max i see i see okay i mean it's a nice little nice incentive and have you raised additional capital or still about 1.4 million raised that's still the case we are actually now in the middle of uh quite a fast series a round discussions and um we also got this grant from um eu innovation fund which is it was really nice one 1.1 million euros in total as a grant that helped us to to boost up a bit non-diluted which is nice yeah definitely definitely yeah what so what is it like i mean we're in the middle of this virus stock markets around the world are down 30 40 percent uh you know there was tons of vc money flowing like crazy as recently as three weeks ago what are you hearing you're trying to raise right now yeah well this is interesting since um as you know vc's they have the money already so they have to fund so they have to figure out what they do with the money since the stock market collapsed they need to find ways to to invest still and um for some reason for back in the days 2008 actually the vc events investments didn't you know die off just like that of course there are things that people maybe hesitate at the moment when it comes to timing and that's of course a bad thing but the at the moment the discussions are still going on with us for instance and nobody has said that okay we will we will postpone or something like that so how much are you looking to raise well at the moment we are looking for in a ratio for five to six million um euros which is then something six six plus uh usd million and and what i mean how much of the company do you think you can get away with selling for six i mean can you get like five percent ten percent who you think if it's like 20 percent let me just share the illusion yeah like how much of the company do you think you have to sell to raise six million um that's a good question always before this uh virus thing going on i think that the um we were looking for 20 to 25 million free money valuation what do you think after edit it too hard to say well i mean you i mean you must be having these conversations right what are you hearing yeah but it's really like most of the most of the discussions that we are having at the moment they are quite early stage still i see i see okay so you want to raise six million we don't have a lead yet or anything like that just conversations yep now are you burning are you burning capital right now are you guys profitable uh we are burning last year for instance the burn rate was around 80 80k usd total oh a month month okay and you're still burning about that today yeah okay that's not not horrible have you given yourself though enough runway i mean you have enough runway in the bank where you can last six seven eight ten months if you need to of course cash flow is cash is the key and the king this at this time so we will we we are following up the cash flow very really really like on daily basis almost yeah um so the run rates we are estimating for the six six uh for the five months at the moment okay so what you have like 300 400 000 in the bank right now cash yeah and then of course the outstanding invoices and stuff like that yeah that's good now obviously churn is critical in any sas company what's your guys's churn look like um calculated germ um net mr arjun around 2.5 minus 2.5 last year okay and logo journey calculative five around five percent um let's ignore logos for a second just focus on revenue churn uh net it sounds like that's a good number 102 net revenue retention which is the same as negative two percent uh net revenue churn if you look at the gross number though the gross revenue churn do you know what that was last year no that number i don't have here no no problem in terms of getting new customers when you're not using a channel partner which you pay a 30 kick pack for are there any other channels that you're leveraging and if so with your fully weighted cac to get a new 40 000 of your customer any other general assuming yeah i'm just curious what's your fully weighted customer acquisition cost if it's not through a value-added reseller um at the moment or last year in average i think we calculated in total of customer acquisition cost around uh 67 000 okay a customer okay so you get paid back in 14 15 months something like that something like that yes yeah these are good good good economics here well to be the divided by khakis three was 3.9 last year in average yep that's good that's good stuff uh very good well look obviously you're you gotta it looks like you're literally on the road right now uh talking talking to vcs uh trying to figure out are you can you raise money do you not raise money now well let me ask you a tough question right if this virus thing doesn't turn around and you guys only have you know four to six months of runway in your bank i mean you have to make some tough decisions what do you cut what i mean what do you cut well that's a that's a really good question of course we've been doing a lot of um this traditional kind of trade shows as well they are now cut off easy no need to decide over there then uh traveling flying all that which was quite quite big last year that will be automatically cut then of course um especially since most of the folks are in finland and the legislation and when it comes to you know layoffs and stuff like that it's not that flexible yeah so it's gonna take weeks months to to start getting savings from employees and salaries and stuff like that so then of course we are discussing with our current investor and they are they are still happy to help so there are option options over there as well yeah who is your current investor it's a nordic company called inventure okay but there are vc firm or or a company very good all right let's wrap up here with the famous five number one favorite business book um that's all places tricky one you told me uh anatomy of winning last time oh yeah that was so again i cannot use it anymore so i'm still reading it actually i like the the book by bess bush the guy who are setting up kind of the blg product guy yeah product product yeah number two number two is there a ceo you're following or studying um not myself then um you can say none no no none number three what's your favorite online tool for building your company i still like hubspot like last time number four how many hours of sleep to eat every night still seven okay and uh married single kiddos what's your situation still married two kids that's good and how old are you 43 44 uh turning uh 44 44. very good last question what do you wish your 20 year old self knew well maybe will hit the fan at some point so i think that's something keep some money in the bank yep there you guys have it uh 1.80 founder again helping automate integration development and management jobs it just passed 200 oh almost 3 million dollars in arr they've got about 300 grand in the bank burning eighty thousand dollars per month looking to go raise six million on a 20 25 pre that was pre kind of virus stuff he's now literally on the road trying to figure out what do we do next can we still raise do we have to cut some costs what do we do there at 65 customers right now founded back in 2011 uh they've raised 1.4 million to date 32 folks team 15 engineers as they look to scale yeah thank you for taking us to the top pleasure these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now