How Pepperi CEO Ofer Yourvexel grew Pepperi to $18.1M revenue with a 88 person team in 2024.

hello everyone my guest today is offer jorvexel he's the co-founder and ceo of papuri the b2b sales platform for brands and wholesalers before founding the business he spent over 20 years in executive leadership positions with enterprise technology companies including amdoc chicata enigma and tefen all right off are you ready to take to the top sure okay so the website is pe the website is p-e-p-p-e-r-i dot com what's the company doing how do you make money uh we sell a sales platform for for businesses who are selling physical goods typically consumer goods products okay what is that so what does that mean what are they typically paying you per month to use the tax uh they're paying us annually uh we are the pure sas platform they typically pay us for two main uh three main products one of them is the b2b e-commerce this is the main one then we have all the different sales applications for reps in the field typically these are three types of reps uh reps taking orders in the field reps doing merchandising jobs in the field and drivers doing sales drop shipping dsd route accounting so these are two products the third one is uh is our integration platform ipass as a service typically uh our system is integrated to the erp and we are doing it that through our own proprietary ipas so these are the three products now is this exclusively is this exclusively for e-commerce brands uh no it's for uh any type of sales of physical goods uh whether it's uh face-to-face or through an e-commerce website or through uh so beauty healthcare jewelry fashion eyewear or anything like that yes but we are focusing on uh mainly on the fast-moving ones as well as eyewear these are the main industries that we are very successful with and what are these brands paying you per month on average to use this technology it can vary from the minimum of around 12k up per month sorry it can vary from a minimum of uh 1k uh for the very smaller one small ones and it can go up to uh around the 60 70k the largest one per month per month yeah got it so your largest customer is you know paying you 850 thousand dollars a year something like that yep and it's more if you take even more if you take services into account one-time services so when you look at your revenue from 2020 what percent was services versus sas i lost you on that can you repeat your question when you look at 2020 total revenue what percent was services versus sas 90 10 90 sas 10 services one-time services and last time you came on in 2019 it was the beginning of 2019 you shared you'd passed about a thousand customers where are you today uh about the same number we have we had a tough year last year because of the covet uh however uh one of the things we did is uh we concentrated on specific industries that are more successful during this period and generally speaking those are the industry i just mentioned as opposed to slow moving item types industries and we focused on larger customers doing these two we did not drop revenues we just dropped number of customers so a thousand customers paying about a thousand bucks a month so is your mrr about a million dollars right now i prefer at this point not to talk about my mri okay but i can multiply the thousand customers times the minimum of a thousand in rpu and that gives you a minimum of a million a month in revenue yeah i just say that we have uh a bit less than thousand now we have less customer but bigger customers i see when do you think you get them way bigger when do you think just on the sas ice i mean when do you think you can pass a million dollars a month in revenue this year i don't think so million dollars yeah yeah a million dollars uh sure yeah and walk me through why you've made the decision to move you know aggressively enterprise less customers higher price points it is quite complex and because it requires integration it cannot stand alone then it's not so simple to implement it as a standalone product and i mean for novice non-i.t people and and for that reason it's much easier for us to work with companies that that have some it infrastructure and typically those companies are companies that are mid market and above also our product is very scalable and it's enterprise level so uh doing a project uh sometimes uh it's the same project uh the same uh level of effort to bring uh 100 i mean one thousand mr or to bring uh 10 000 ml and you always have uh limitation on your capacity on your resources so if you can focus on the largest one and they also can have a much bigger potential for growth implementation to full-blown implementation of our entire system so offer when you look at driving expansion revenue you want to look at obviously your sales team to look at upsell opportunities how many people are on your sales team right now with a quota uh we have uh six people on with a quarter one of the nicer things that happened to us in 2020 is that the up sales were amazing especially in the us and we sold the the upsell in the us were more than the new sales during the clothing uh so when you look when you look at the full when you look at the full business offer i hate to keep i don't mean to keep cutting you off but it's limited time and i want to keep learning here fast so when you say expansion revenue was great can you quantify that across the whole customer base what was expansion revenue over the past 12 months a couple of million sorry on a percentage basis around twenty percent okay and with that would that would that put your net revenue retention at something like 110 120 obviously that it's driven by your churn uh i had a negative churn all in all you know when you take up sales versus churns gross uh churn uh only knowledge grew very little last year because of this corona because we lost a lot of uh customers that actually shut down their business yeah so six quota carrying sales reps how many people are on total on the sales team that's it six oh so you don't have any bdrs or customer success reps with no quota no i have uh customer success customer success do not do not carry quota yeah so with the total team size of the sales people including ones that don't carry quota okay nine got it and how many engineers about 30. they're oh wow 30 that's much bigger than the last time we spoke yeah i'm talking pure engineers for r d not for implementation and such yes yeah and what's the total team size around 100 100. now i was really impressed last time we chatted you've done all this bootstrapped are you still bootstrapped uh yes uh we are profitable this is the beauty of it we don't need investors i love that i love that how have you resisted i'm sure they reach out to you all the time do you just say no thank you no i do not say that i uh i like chatting with them but generally speaking uh we told them that this is not a good timing especially because the business results are not great as i explained what points of growth if you do get back to a growth trajectory this year would you consider raising capital in capital for the rice bright price yeah not for any price but for the right price sure and if you did go down and raise obviously valuation is what you mean by price but how much would you look at raising if you did do it uh actually i don't need a lot it depends if it's just for organic growth it depends on the strategy if it will be for organic growth then i don't need more than five to ten million uh if we're talking about uh fast expansion with acquisitions then there's no limitation to that but it depends on the plan and uh what kind of companies would you go acquire if a private equity firm gave you 100 million dollars to spend on a roll-up b2c can you name companies uh no why not come on i want to know i wonder who you'd go after no i don't want that i don't want to provide that when you say b2c what do you mean by that we are a b2b platform i'll be happy to complement the platform to b2b2c so so describe what that platform would do a b2b2c platform in your space uh yeah so our customers today are customers that are selling uh to businesses typically we are talking about retail store or websites that are selling their products and typically we are talking about manufacturer uh as you as as i'm sure you know uh people are moving more and more toward e-com sales and it became much easier to sell b2c and there's huge pressure on my customer to go direct and we so many of our customers moving from pure b to b to b to b to c meaning opening their own website in some cases opening their own stores but in the most case opening their own b2c websites and no longer doing it uh behind the scene because before that we we also knew they were some of them were doing it behind the scene with different names uh so now which is what is called today direct to consumer new businesses in many cases are doing it from the get-go but many traditional businesses are adding that to their business lines got it um go ahead sorry but wrap up here because we're out of time what would you like to do uh what we would like to do is to serve those customers a to z meaning b to b to c and not and to not uh tell them as we are telling them today go and find the b2c solution and we'll integrate to it all right let's wrap up here with the famous five quick answers number one what's your favorite business book...