How PinMeTo Reached $5.2M Revenue with 550 Customers and 3% Gross Churn (Interview with CEO Daniel Melkersson)

Introduction to PinMeTo and the Platform

Nathan Latka

00:00Hey folks, my guest today is Daniel Melkersson. He is the CEO and founder of a company called PinMeTo. It's a SaaS platform that connects multi location brands with the biggest search map and social media platforms, letting them keep their business information up to date everywhere, manage reviews, and maximize their social reach all from one place. Daniel, you ready to take us to the top?

Daniel Melkersson

00:18>> Yeah, sure.

What PinMeTo Does for Multi-Location Brands

Nathan Latka

00:19This is great. So like if I own a little restaurant in Austin, Texas, and I need my Google place thing updated and my search results updated and my, you know, my whatever Yelp thing updated. I can basically manage all the metadata on PinMeTo.

Daniel Melkersson

00:30>> Yeah. Exactly. So you we we we got one platform to handle all all sorts of listing networks around the world. Could be a search network, could be map services, GPS services in cars, and social media services.

COVID Impact and How PinMeTo Responded

Nathan Latka

00:44Now when you last came on back in 2019, this was pre COVID, which is sort of interesting. I remember you saying, I I believe you had, let's see, about 200 customers. You were selling it for about $800 a month, and so you were doing right around a $2,000,000 run rate. How did COVID impact you?

Daniel Melkersson

00:59>> We got really scared in March last year, but but we what we did then was that actually we we contacted the customers we had in in in hospitality industry and just said, okay, let's pause your payments for the upcoming three months and see what happens with COVID. And then after four months, everyone was back and paying again. So I think that was a good thing that we actually reached out. But and we've been keeping growing pretty

01:28>> okay, very, very low churn. Still, we're very focused on location based businesses. A lot of them got hurt during COVID, but on the other hand, a lot of the retailers needed our tool to, you know, say this store is closed now because of COVID, or they want to go out and say, hey, all these stores in, for example, in Shanghai needs to be closed now, but we open up soon again, and so so it's been good

01:52>> for us. And we also switched focus when it comes to the verticals we sell to. So we focused a lot on on the verticals that are, you know, still alive and and kicking during COVID. So I think we we did good. Yeah.

Current Customer Count and Top Verticals

Nathan Latka

02:04And so how many paying customers do you have today, and what verticals are your top three?

Daniel Melkersson

02:09>> So we have around five fifty paying customers today. The top three verticals are still retail,

02:18>> also EV charging and gas stations. It kind of goes hand in hand today. Gas stations needs to pivot into EV chargings as well, so that's the two biggest, I guess, and then then I would say hospitality still. Yeah.

Pricing and ARPU

Nathan Latka

02:36Hospitality. Interesting. And are you still is the average customer still paying you about $800 a month?

Daniel Melkersson

02:42>> Yeah. Around 800. A little bit above 800. I would say 900 today.

Nathan Latka

02:46And dig into your pricing a bit for my audience here. What's the difference between someone paying you 200 a month versus 10,000 a month? In other words, what do you upsell against?

Upsell Model and Largest Customer

Daniel Melkersson

02:55>> So we upsell against the number of locations because they're location based businesses, multi location businesses. For example, one of the customers we work with, H and M, they have stores all around the world, so they pay per per store. So we upsell with the number of locations if they grow by locations, and then we cross sell with other products on the platform.

Nathan Latka

03:17I see. Okay. Location based upselling, feature based upselling, that's both great. Help me understand. Don't name the customer, obviously, but what's your largest customer account? What are they paying you per year?

Daniel Melkersson

03:27>> They're paying us $300,000

Nathan Latka

03:33Okay. That's getting up there. And you're probably getting I mean, you generally moving upstream or downstream?

Daniel Melkersson

03:38>> We're really trying to move upstream, and I think we are, but we kinda have the same kind of average deal size the last two years. And I think we we're doing really good there. So

Nathan Latka

03:54Hey. If it works, there's a model for everyone, right? If it's working, it's working, right? And from what I hear you say is you had 200 customers two years ago, you have five fifty now. That sounds like pretty good growth to me.

Daniel Melkersson

04:03>> Yeah, I would say not super big enterprises is our sweet spot, but large multi location businesses. Yep. That's sweet spot.

Nathan Latka

04:10You shared last time you did not bootstrap this. You raised 25 k seed round in 2014. You raised, I think, 580,000 venture round in 2017, and you raised, I think, 2,300,000 series A in 2018. Are those correct?

Daniel Melkersson

04:22>> Yes. Yes.

Nathan Latka

04:23Have you raised since then or no?

Daniel Melkersson

04:25>> Yes. Yes. The small round with the the investors we already had on board almost a year ago now, but we haven't used the money yet. So that's that's a good thing. We kind of did it just because of could. It was a good opportunity.

Nathan Latka

04:40Yeah. So as an insider around, we talking like a million or like 10,000,000?

Daniel Melkersson

04:44>> No. No. It's a small it's it's $2,000,000.

Nathan Latka

04:48About 2,000,000. Okay. Yeah. So then to date, you've raised total something like $5,000,000.

Daniel Melkersson

04:53>> Yeah.

Nathan Latka

04:54Interesting. And and and so were

04:57you just nervous about co because obviously you got diluted raising another 2,000,000 from insiders about a year ago, but you're also probably nervous about COVID. Cash cushion probably feels good. Why'd you do it?

Cash Position and Team Size

Daniel Melkersson

05:05>> Yeah. We we did it because of growth to to hire more people, open new new offices, especially sales offices. But we we kind of had a good year when it comes to sales. So we we we have done what we wanted this year without using the money we we took in the last round. That's right. We thought we're really gonna try to use them next year. But as long as we can grow with the with the

05:33>> customer's money, that's that's a great thing, you know.

Nathan Latka

05:36So you have more than 2,000,000 cash in the bank today?

Daniel Melkersson

05:38>> Yes.

Nathan Latka

05:39That's great. So, yeah, nice cushion. You can use it for hiring, acquiring, whatever you want. How many folks on the team today?

Daniel Melkersson

05:46>> Almost 80. Think 78.

Nathan Latka

05:4878. Wow. Okay. Very cool. Now talk to me a little bit more about what you think like next moves are here, right? How do you go, I'm guessing here, if you have five fifty customers at $800 a month, you're doing about 5,200,000 in terms of run rate right now.

Path to $10M to $20M in Revenue

Daniel Melkersson

06:00>> Yeah.

Nathan Latka

06:01How do you go from 5.2 up to, like, you know, 10 or $20,000,000 in revenue?

Daniel Melkersson

06:08>> The our the focus we have, we are very sales oriented company, so very much sales excellence. We're opening new hubs around the world, working very locally when it comes to the culture of the salespeople. So for example but we're trying to keep the costs down. So for example, I can give you an example. In Europe, it's very different from country to country, the cost of living and the cost of, you know, having employees and so on.

06:37>> So but in sales, you know, it's all about, you know, feeling the other person comfortable that the person is selling you has the same culture as you and so on. So for example, we have quite a lot of people born and raised in The UK living in Poland today for different reasons, and we have them selling to The UK, which for us is way, way cheaper to have people hired in Poland. But still, they sell in

07:03>> UK and and the customers in The UK and the leads we talk to, they they experience them as, you know, a UK office.

Sales Team Structure and Quotas

Nathan Latka

07:10And I'm just So how many how many sales reps do you have then today that have a quota?

Daniel Melkersson

07:15>> Around 40. 35, 40.

Nathan Latka

07:18That's a massive sale. They all carry a quota?

Daniel Melkersson

07:21>> They 35 carry a quota for sure.

Nathan Latka

07:24Wow. Okay. So the total sales seems like 40 and then quota carrying is 35.

Daniel Melkersson

07:28>> Yeah. And we that is we hire what we hired this year was salespeople. So Wow. We didn't go into this What's their quota, Daniel?

Nathan Latka

07:36What if I if I joined let's say you hired me this year, what would you tell me my first year quota is?

Daniel Melkersson

07:41>> It depends on what what what market you're you're selling to. Because we always see that the first six months is is, like, just getting getting started, make sure you have enough quotes out, and then you start closing deals. So the first thing six months, I wouldn't say you have any quota, but you need to have a lot of momentum

08:03>> and make sure you have a lot of quotes out, a lot of meetings. And from that on, I would say in in US dollars per month, around 10,000. That's it for the first year, and then you will ramp it up.

Nathan Latka

08:21So I should be closing 10,000 of new monthly recurring revenue per month as a sales rep?

Daniel Melkersson

08:28>> Yeah. After a year.

Nathan Latka

08:30After a year? Yeah.

Daniel Melkersson

08:31>> After a year.

Nathan Latka

08:31Yeah. Yeah. So if it's 10 k a month of new MRR and I do that as a sales rep for you for twelve months, I'm basically each sales rep should be adding about a $120,000 of new monthly recurring revenue annually. Yeah. Now, obviously, your whole sales team is not ramped up yet because if you did that with 35 people, you'd be doing thirty, forty, fifty million bucks in revenue.

Daniel Melkersson

08:50>> We're not we we were only not even half of those people when we went into 2021.

Nathan Latka

08:55Wow. Yeah. So, so many of them are still in that six month period where you're still ramping them up.

Daniel Melkersson

08:59>> Yes. Exactly. Yeah.

Nathan Latka

09:01Very interesting. And do you follow toward a sort of standard here? In other words, ignore the ramp up period. Once the sales rep's fully onboarded, are they making, you know, $200,000 on target earnings if they hit their million dollar quota? Is that sort of the range?

Daniel Melkersson

09:14>> Yeah, it is. I would say you're quite right there.

Nathan Latka

09:17Yeah. Yeah. I mean, there's a pretty standard playbook there, so I only want to ask more questions if you're deviating from the playbook for any reason.

Daniel Melkersson

09:23>> No, we're boring.

Nathan Latka

09:26I don't think you're boring. I think you're doing the right you're doing the right things.

Daniel Melkersson

09:29>> No, no. Yeah. But I think the playbook you're talking about, I think that's the one most people should go by. It's it's it's a good one.

Engineering Team and Hiring Philosophy

Nathan Latka

09:37And how many engineers are on the team?

Daniel Melkersson

09:40>> It's around 12. Yeah. I think,

Nathan Latka

09:44Okay.

Daniel Melkersson

09:44>> Cool. We're trying to ramp that up, but it's hard. It's hard.

Nathan Latka

09:48What makes it hard?

Daniel Melkersson

09:50>> It's hard to hire it's not hard to hire developers if you can go whatever, but we also want really specialized in what we do, that are familiar, you know. We're used to work with the with the big tech companies and the technologies they use and so on. So we're quite picky when it comes to the developers we want, and we also try to keep them quite close. So we have done a lot of people that actually

10:13>> moved to Sweden for a different reason, from US, from China, from all over the world, to work close by. So we try to keep the team really close. And and and maybe this is against what everyone says today. We we really like them actually to have the possibility to physically meet up because r and d works better that way. That's just the way I see things. Faster. Not bad. Maybe not better, but faster.

Churn and Expansion Revenue

Nathan Latka

10:37Yep. And talk to me a bit about churn here at this price point. What's gross churn? What's expansion? What's net dollar retention?

Daniel Melkersson

10:45>> Oh, I don't have all the numbers. Sorry. In my head, but we have a gross churn around 3%.

Nathan Latka

10:52Annually or monthly?

Daniel Melkersson

10:53>> Annually on revenue.

Nathan Latka

10:54Okay. Yep. You told me two years ago your expansion was about 20%. Do you feel like you're doing a better job expanding today than you were then?

Daniel Melkersson

11:02>> I think we're doing pretty much the same. We have a lot more to to do here. We have been so focused on, you know, go get new customers in. So we we really this year is the first year we're really focused on up sales and cross sales.

Nathan Latka

11:17So Daniel, how do you how does PinMeTo fit into, like, how you think about your personal net worth and your personal well-being? Like and can you think can you be sort of greedy here? Are you the sole founder?

Founder Equity and Personal Perspective

Daniel Melkersson

11:28>> No. No. We we are three founders Okay. And a few investors. Yep. So Did you

Nathan Latka

11:34guys split the three founders? Did you guys split it evenly back in 2014 or 2013?

Daniel Melkersson

11:38>> Yes.

Nathan Latka

11:39Oh, interesting. Okay. Got it. So 33, 33, 33. You've brought on some of these investors. How do you I mean, you just raised the 2,000,000 inside around. Usually, that's you're selling like, what, 10 to 15% of the business doing that?

Daniel Melkersson

11:53>> Nope. Well, it was actually less.

Nathan Latka

11:56Oh, wow. Okay. Oh, that's well, that's a big deal. That's great. I mean, that's great. Anytime I hear something that's not standard, I want to understand why. So how were you able to get away with raising 2,000,000 and selling less than 10%?

Daniel Melkersson

12:05>> All the investors that were already on board was quite happy with what they already have, and also could see that with the money now we can really, really grow and make more value of

12:20>> ownership they already had.

Nathan Latka

12:21Okay.

Daniel Melkersson

12:22>> So there wasn't that bad, that dilution in that round.

Nathan Latka

12:25Yeah. I mean, what? I mean, was it less than 5%? I won't push you harder than that.

Daniel Melkersson

12:28>> It was pretty much in the middle of five and ten.

Nathan Latka

12:32Okay. Got it. Got it.

Daniel Melkersson

12:33>> Got it.

Nathan Latka

12:33Yeah. So you were raising the I mean, that was basically at a what is that? A $28,000,000 pre money valuation, something like that?

Daniel Melkersson

12:39>> Something like that. I'm not allowed to say.

Nathan Latka

12:41So so so, Daniel, I would argue that's actually a fairly low multiple. If you're doing $5,400,000 in revenue when you did that deal, That's basically a five x multiple. But I've seen deals where, I mean, these are, ten, twenty, 30 x multiples. Why didn't you run a formal process and try and get some more competition?

Daniel Melkersson

12:56>> To focus on the business.

Nathan Latka

12:58Yeah. So this was a quick round.

Daniel Melkersson

12:59>> That's it.

Nathan Latka

13:00Was you to get money quick. It wasn't a long process.

Daniel Melkersson

13:02>> Yeah. Yeah. Yeah. And just make everyone happy, you know, that we have really good owners and investors. So yes. Okay. Let's let's just do this. Yeah. And keep working with the business.

Nathan Latka

13:14And is my math right? If you're doing about $440,000 a month today in revenue, you were doing about 350,000 exactly a year ago?

Daniel Melkersson

13:22>> Yeah, a little bit less, actually.

Nathan Latka

13:24A little less. Okay. Yes. I mean, is great. This is a good growth story. Now, it's been a year since that last raise. You know, co world's coming out of COVID. You guys have great momentum. Are you looking at raising right now?

Daniel Melkersson

13:34>> No. No. Nope. I'm not 100% sure we we will do that. There's there's so many good other solutions today. I know you have one, for example, and so on for businesses like

Nathan Latka

13:46I love to work. We we've got a $100,000,000 we have to put to work, so I would love to work with you.

Daniel Melkersson

13:52>> Yeah. So we probably look at that kind of structure instead of maybe racing in in, you know, the usual way of racing.

Nathan Latka

13:58Yeah. I love that. I love the alternative approach. Now, what is that approach like in Sweden? I mean, do you have a lot of options or is it hard? I mean, you probably have government programs and you're insiders. What about what's the rest the ecosystem like?

Daniel Melkersson

14:09>> There's more and more,

14:13>> you know, solutions for lending. I've just there's a new we just started a new company doing this, a new fund doing this. People, you know, have been working with the larger banks that got tired of, you know, they saw the opportunity and started their own funds now. Yep. So there's more and more of that coming in Sweden and in this part of Europe as well.

Nathan Latka

14:38After dilution, again, you raised, you know, through a series A now, I'm gonna maybe guess you still own like 15% to 20% of the company personally. So let's say like, the reason I'm asking this is a lot of founders at your stage, they look at their equity value and they go, man, I really wanna go buy a house or have some kids or start a family, but all my net worth is tied in my SaaS company.

14:56You ever have that feeling? And what are your options to, like, potentially diversify?

Daniel Melkersson

15:02>> I already have the kids. I already done the whole thing. I've done the kids. I've done the divorce.

Nathan Latka

15:09So so You're past your life MVP.

Daniel Melkersson

15:12>> I'm past. I I've already peaked. So everything is a bonus from here. I love that. Not really. Not really. I'm quite happy where I am right now. I have a really good co CEO now. I I can do a lot of things within the company that I love to do where I really see that I I put still put a lot of value into the company. So no stress at all on the on the private side.

Nathan Latka

15:38What what if someone like, if an investor listening and came and offered each of you three co founders, 1,000,000 each, so 3,000,000 total for 15%, but you guys could take it all personally as secondary. Do you I mean, is that something that early stage founders I mean, does that get you excited or no?

Daniel Melkersson

15:53>> I'm not excited, but I cannot talk for my other two co-founders.

Nathan Latka

15:56What about your is that your wife behind you that just walked by?

Daniel Melkersson

15:59>> No. It was actually my son. He has just got long hair.

Nathan Latka

16:02Oh my gosh. Sorry about that. He has that's a that's like my brother. He has, super long hair. He, like, plays guitar in the woods all day. He's great. Alright. I apologize for that.

Daniel Melkersson

16:10>> That that that same kind of guy, like, just popped by behind me.

Favorite Tools and Rapid-Fire Questions

Nathan Latka

16:14I love that. Alright. Very cool. Let's wrap up here, Daniel. Number one, what's your favorite business book?

Daniel Melkersson

16:20>> Oh, let's see. I'm actually reading Scaling Up right now.

Nathan Latka

16:25It's a good one. Number two, is there a CEO you're following or studying?

Daniel Melkersson

16:29>> I always like Gary Vaynerchuk because he's the way he is.

16:33>> Yep.

Nathan Latka

16:34Number three, what's your favorite online tool for scaling PinMeTo?

Daniel Melkersson

16:37>> I would say Planhat and Younium, both Swedish. Planhat What do you use success.

Nathan Latka

16:46What do you use to manage all your remote employees? Like, to pay them out, like payroll, taxes, all that kind of stuff?

Daniel Melkersson

16:51>> We're using a Swedish company called Fortnox. Fortnox.

Nathan Latka

16:54Interesting. Yeah. Yeah.

Daniel Melkersson

16:55>> It's it's a Swedish, yeah, company. They're all Younium is a Swedish company to do invoices for SaaS. Really interesting company if you want to talk to another Swedish interesting company.

Nathan Latka

17:07I'd love to. I want to feature more Swedish founders, now I would love that intro. That'd be great.

Daniel Melkersson

17:10>> And then then the other one is Plan Hat for customer success. Also really good too.

Nathan Latka

17:15Number four, how many hours of sleep are you getting every night?

Daniel Melkersson

17:18>> Between six and eight.

Nathan Latka

17:21Okay. And situation married single. Did you remarry?

Daniel Melkersson

17:24>> No.

Nathan Latka

17:25Okay. So single. So divorced. How many kiddos?

Daniel Melkersson

17:27>> Two.

Nathan Latka

17:28Two kids. Okay. And how old are you, Daniel?

Daniel Melkersson

17:32>> I'm 45.

17:33>> 45. Last question.

Nathan Latka

17:34Something you wish you knew when you were 20.

Daniel Melkersson

17:39>> That I did exactly what I did when I was 20. Enjoy life. You can do other things later on.

Closing Summary

Nathan Latka

17:46Guys, you have it. PinMeTo helps five fifty customers like gas stations or EV charging stations, restaurants manage their metadata across Google search, reviews, Yelp, etcetera. They're doing about $800 per month per customer. So they're doing about 440,000 a month, up from 340,000 or 320,000 about a year ago. Healthy growth. They just raised another $2,000,000 and an inside around, they call it like a $28,000,000 valuation, but very, very capital efficient. They have less money raised than their

18:13total revenue run rate today, which we love. Daniel, thanks for taking us to the top.

Daniel Melkersson

18:17>> Thank you.

Nathan Latka

18:20One 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

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19:55See you.