How PinMeTo Reached $5M ARR and 700 Paying Customers With an 85-Person Team (Interview with Founder Daniel Melkersson)

Introduction to PinMeTo and Daniel Melkersson

Nathan Latka

00:00Hey, folks. My guest today is Daniel Melkersson. He is building pinmeto, which offers a SaaS platform for managing business information and online conversations of large, multi location organizations across thousands of online services, apps, and other directories. They do this to boost brand management and drive foot traffic and increase sales. Daniel, you ready to take us to the top?

Daniel Melkersson

00:21>> Yes.

Nathan Latka

00:22Alright. So when we last spoke actually, we spoke a couple times, but you you communicated your your

Last Funding Round: $2M Series A in December 2020

Nathan Latka

00:27sort of last round of funding was back in December 2020. I think a 2,000,000 series a, correct?

Daniel Melkersson

00:34>> Yeah. Yeah.

Nathan Latka

00:35And so we're gonna bridge back to how you funded the business since then if you raise any extra capital if you're planning to. But first, for people that missed our first episode together, who's paying for the pinmeto platform?

Who Are PinMeTo's Customers

Daniel Melkersson

00:47>> Our end customers? That's the question.

Nathan Latka

00:50No. I I mean, obviously, Daniel, I know that. But who who are the customers? Who's paying for your technology?

Daniel Melkersson

00:55>> Yeah. Yeah. Sure. Our customers are large, multi location brands. It can be anything from retailers like H and M to to car dealerships like Volvo. So yeah.

Nathan Latka

01:06And so Volvo would use you across a 100 or so dealerships in a certain geography or or something like that, and and they would use you to drive traffic to those dealerships?

Daniel Melkersson

01:15>> Yes. Exactly. Same thing with H and M, but for their stores.

Nathan Latka

01:19Okay. And so how many customers are you working with now today?

Daniel Melkersson

01:22>> It's around 500.

Nathan Latka

01:24Okay. Around five so you said five fifty last time. Are you above five fifty now? Have you been have you decreased a little?

Customer Count: 500 Enterprise and 700 Total

Daniel Melkersson

01:29>> No. I've done it. It's around 500. I think it's if it was five fifty six, I am not 100% sure. It depends on how we calculate it because we usually, we don't calculate SMBs, which is which we call customers under 50 locations. But if I bring them in as well, it's over 700. So it's it's large companies. It's it's around 500. But if we calculate the few SMBs we have as well, it's over 700.

Nathan Latka

01:54Okay. Okay. It makes sense. You obviously just split those into cohorts, but just to be clear, all 700 are paying at least a dollar per month. They're all paying customers.

02:01>> Yes. Yeah.

02:01Okay. Very cool. So how have you how have you been signing these folks up? Right? What's your go to market look like in terms of growth?

Go-to-Market: Outbound B2B Sales

Daniel Melkersson

02:08>> It's been we're doing b to b outbound sales mostly. Of course, we have a communication and a marketing department, but they are heavily focused on helping our SDRs to book more meetings and getting more in balance. Mhmm. Sales approach.

Sales Team Structure: 25 Quota-Carrying Reps

Nathan Latka

02:25And how how many quota carrying reps do you have today?

Daniel Melkersson

02:29>> Quota carrying, I would say 25.

Nathan Latka

02:31About 25. And are you and what percent, I guess, of your total team do they make up? What's the total team size today?

Daniel Melkersson

02:39>> Of the whole company or the sales team?

Nathan Latka

02:40Whole company.

Daniel Melkersson

02:42>> 85.

Nathan Latka

02:4385. So teach us a little bit about sales. A lot of founders are trying to scale their sales teams. You have a large chunk of your team dedicated to sales. Did you make any mistakes in your first couple sales hires?

Daniel Melkersson

02:53>> Yes. Yes. A lot of them. I think that the biggest mistake or in the beginning, you're trying to do everything. You're the you're the startup. You're the founder. You're the sales guy. And then you hire a few salespeople that can do let's say, you can imitate yourself doing everything in sales. You book the meetings. You you you have the meetings. You close the deals. I would say, I'm gonna do this again, I'm gonna make sure to

03:17>> to hire sales developers or to book the meetings and then sales managers to to handle the the quota carrying parts.

Nathan Latka

03:26So what what's the ratio now? How many SDRs per AE?

Daniel Melkersson

03:31>> It's something we we should be better at. I would say it's one to one at the moment. So we have one SDR for one sales manager. We would like to see two s one SDR to two sales managers, but still, it's quite big deals. It's not super small deals. So the SDRs is doing quite complicated outreach and very, very, very qualitative outreaches. So maybe the ratio is good. I don't know, maybe your data can tell me

03:58>> something more about that, I don't know.

Nathan Latka

04:00Oh, 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

04:23your 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

04:48get 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

05:09not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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

05:35going 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

05:57if 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

06:23the interview. Take me into the life of a pinmeto account executive. Right? In a given week, how many demo calls are they probably doing?

AE Quota and Top Performer Performance

Daniel Melkersson

06:33>> Anything between, I would say, twelve and five.

Nathan Latka

06:37I see. And then in a given month, what what quota do you expect them to hit?

Daniel Melkersson

06:43>> In a given month, I don't see. I only have it in in in year and instead

06:47Oh, year is fine.

06:47>> Yeah.

06:49>> Around 2,000,000. So 200,000.

Nathan Latka

06:52Okay. So you 200,000. So you expect them to close to about 2,400,000 of new ARR each year?

Daniel Melkersson

06:58>> Yeah.

Nathan Latka

06:59Okay. That's a that's a lot. Do you have reps that are hitting that quota?

Daniel Melkersson

07:03>> Yes.

Nathan Latka

07:04Wow. Okay. That's impressive. I mean, most folks, you know, know, it's a million dollar quota target. How have you been able to get your reps to perform at such a high level?

Daniel Melkersson

07:13>> I would say so it's maybe five out of the twenties hitting that target, but what they've done is they've been here a few years, between two to five two to four years, and they've built up quite a big number of leads they are working on. So it's everything between, you know, large companies and enterprise deals. So they have a few enterprise deals that they close every year, and then quite a lot of smaller ones. I think

07:39>> that's So

Nathan Latka

07:40do those AEs that have been with you for many years, do they get to keep the customers they signed three years ago and they count all the expansion revenue into their quota target?

Daniel Melkersson

07:48>> No. They leave they leave that when we leave it to the onboarding team in CES to take over.

Nathan Latka

07:54And why do believe it's an advantage that reps that have been with you for a longer period of time are hitting higher quota? I mean, you just said it was relationships years ago, right?

Daniel Melkersson

08:02>> Yeah. They built up more relationships and some enterprise deals takes years. So

Nathan Latka

08:07Mhmm. Mhmm. Okay. Interesting. So, when you say, you know, deal prices are pretty big, mean, what's the average customer paying you per month or per year?

Average Revenue Per Enterprise Customer: $1,500 per Month

Daniel Melkersson

08:16>> I just need to do it.

08:19>> 1,500.

Nathan Latka

08:21Per month or year?

Daniel Melkersson

08:23>> Per month.

Nathan Latka

08:24Per month. Okay. Got it. So, I mean, can can I take 1,500 per month times 700 customers? You're doing about 1,000,000 a month in revenue right now?

Daniel Melkersson

08:35>> That should be more. Sorry.

Nathan Latka

08:37You're doing you're doing more than 1,000,000 a month in revenue?

Daniel Melkersson

08:41>> No. We're not. A little bit under. Yeah.

Nathan Latka

08:45Okay. Okay. Well, yeah, because remember, you told me the 700 customer number. You said you also included your small SMBs in that. So maybe they're not Yeah.

Daniel Melkersson

08:51>> Yeah. That's why that's why we're not I'm not calculating them. So you should take that number I said times 500 customers instead. That is close to the truth.

Nathan Latka

09:02I see. I see. Okay. So I guess I should just ask you. So so what are you doing monthly right now in terms of monthly recurring revenue?

Monthly and Annual Recurring Revenue

Daniel Melkersson

09:07>> I know. Last year, we we we the ARR was 5,000,000, and now we're doing MRR, I would say, two hun two I don't have it in my head. Sorry. Sorry, Nathan.

Nathan Latka

09:23No. That's okay. Take take your time.

Daniel Melkersson

09:29>> I'll do this.

Nathan Latka

09:32I mean, March is about to end. Right? So you have March's data, right, fresh on your brain. How much revenue did do in March?

Daniel Melkersson

09:37>> Yeah. Around 50,000.

Nathan Latka

09:4150,000 in No. Total

Daniel Melkersson

09:43>> No. No. No. No. No. No. I'm trying to do this from SEK dollar and

Nathan Latka

09:48How about well, just let's just use SEK. How much SEK did you do in March?

Daniel Melkersson

09:53>> We did

09:56>> one divided in 12. So four million SEK or four hundred four hundred and twenty. Four hundred twenty we did.

Nathan Latka

10:05Yeah. So so if you did

Daniel Melkersson

10:06>> 4,000,000 if you did

Nathan Latka

10:084,000,000 in March in terms of monthly recurring revenue, that's equivalent to about 440,000 United States dollars.

Daniel Melkersson

10:15>> Yeah. Yeah. It used to be. Now, I think it's at I think US dollar is, like, 10 Swedish krona right now because the Swedish krona has been damaged quite badly by the work going on.

Cash in Bank and Growth Plans

Nathan Latka

10:26Yep. Yep. Okay. Got it. So you're doing about about 5.2, 5.3 in ARR today, which is great. How do you I mean, how do you plan to grow this year? And do you still have money left from the series a round to invest in growth?

Daniel Melkersson

10:38>> Yeah. We have all the money left. So we did pretty much last year bootstrapped.

Nathan Latka

10:43Now So just to clear, you you have million today. We're recording this on March 30. You've got about 2,000,000 in the bank. Yeah. Okay. And so what do you plan to use that money on to drive growth?

Daniel Melkersson

10:54>> More more sales, and we're gonna grow and build more. We we call it hubs around Europe. We we work very remotely, but we have hubs. We have one in Poland for the Eastern Mark Eastern Europe, and then Portugal for Southern Europe, and and moving more into UK and Germany as well now. So we're gonna keep growing in Europe.

Nathan Latka

11:12And where is your next hub gonna be?

Daniel Melkersson

11:16>> Most probably Germany.

Nathan Latka

11:18Germany. Okay. Interesting. Where

11:21I guess, tell me about funding. Right? So do you do you plan to raise any additional capital here in the next, you know, six to twelve months?

Daniel Melkersson

11:28>> Nope.

Nathan Latka

11:29No additional capital needed. Do you regret I mean, you've raised what? How much have you raised to date?

Daniel Melkersson

11:35>> Around 5,000,000 US.

Nathan Latka

11:36Do you regret raising that money? No. No. I mean, you haven't really used it. Right?

Daniel Melkersson

11:43>> No. Two of them we haven't used, but the rest we used before. So it's been you know, we did a year bootstrap, and then another year, we we used some money to grow faster. And then I don't know. Maybe it's very Swedish to be a little bit careful sometimes. Use, you know, use the money well.

Nathan Latka

11:58No. I think it's fine. Was the last round really dilutive?

Daniel Melkersson

12:02>> No. No. It wasn't. It was only by external or internal investors, and it wasn't much of a dilution for us.

Nathan Latka

12:11What was the valuation that you raised the 2,000,000 at?

Daniel Melkersson

12:14>> I don't remember. I'm sorry. I don't really remember what the valuation. I'm not even know if I am allowed to say it.

Nathan Latka

12:19You told me on the last interview, was 2,000,000 on a '28 pre. So it was 30 post. Is that accurate?

Daniel Melkersson

12:25>> Yeah. It is. I already told you then.

Nathan Latka

12:29What do mean you don't remember? How do you not remember that? Equity is all that matters, and that's what takes equity from you is raising rounds.

Daniel Melkersson

12:36>> Yeah. Yeah. But it it's it was back in 2020 and we're focusing on sales and growing the business since then. And, you know, we still have the money. So we're happy and, you know Fair.

Nathan Latka

12:45Fair. Fair. Yeah.

Daniel Melkersson

12:46>> Yeah. So you're able to you basically did that round and you only had to sell about 6% of the business.

Nathan Latka

12:51So you still own I mean, you have three co founders too. Right? Yeah. Yeah. So what altogether, how much equity do you guys plus employees, like internal people still own?

Daniel Melkersson

13:00>> Around 50.

Nathan Latka

13:0250. Okay. That's actually less than I thought. So investors own a pretty big you must have had very dilutive early rounds of financing then.

Daniel Melkersson

13:08>> Yes. We had one round earlier that was a little bit too dilutive.

Nathan Latka

13:12Was that the 2018 or 2017 round?

Daniel Melkersson

13:15>> It was the 2018 round.

Nathan Latka

13:17The the sort of first series a, 2,300,000.

Daniel Melkersson

13:21>> Yeah. Yeah.

13:22Okay.

13:22>> The the the and it wasn't because of the round. It was because of things in the ownership and owners from before earlier on. So we kind of cleaned out the cap table, and it was a bit of a delusion there.

Nathan Latka

13:35Oh, were you not the original owner?

Daniel Melkersson

13:38>> I am the original owner. Yes. Yes. Yes. Yes. It was just that the other owners that we won won't not want it on board anymore. So we needed to figure ways out to do that.

Nathan Latka

13:46So if you bought back their equity, though, that should reverse dilution, not add more dilution?

Daniel Melkersson

13:52>> No. No. The equity was actually sold to another investor that also invested.

Nathan Latka

13:57Ah, I see. Okay. So their equity is still not inside the company. Another investor bought it and got a big chunk of the business.

Daniel Melkersson

14:05>> Yes.

Nathan Latka

14:06Okay. And that investor you're friendly with that investor, though. Right? It's not a nasty investor.

Daniel Melkersson

14:11>> Absolutely. The the the head of the board is from that investor. So it was really good for the company, but they ended up with a little bit too much of a delusion like that.

Nathan Latka

14:21I see. I see. How have you structured your board out there in Malmo? In The US, you know, there's a typical structure, but it differs depending on what country you're in. How have you structured your board?

Daniel Melkersson

14:30>> It's it's it's it's me and the CEO and the two lead investors investors and and one one business angel that knows a lot about the business parts Mhmm. Though what we do.

Nathan Latka

14:43So so there's five total. That one business angel, if there's a big disagreement on the board with that business side with you, your CEO and you, or the two investors?

Daniel Melkersson

14:55>> I don't know really. It depends on what question.

Nathan Latka

14:58Is he let me ask it directly. Is he your friend or their friend? Who came up with the idea to put that person on the board?

Daniel Melkersson

15:04>> It it that was my idea way back, so I think it would go with us.

Nathan Latka

15:08He'd probably go with you then. Okay. Interesting. Very cool. Anything else that you've been frustrated with that you feel like, you know, if you were based in The US, you would have been able to do x, but you can't because you're in Malmo?

Daniel Melkersson

15:20>> It's always frustrating when you're from a small country, I think. Because when we started here, we thought, like, okay, we're gonna go for the biggest customers we can find early on, you know, around us without, you know, having to go to The US and outside Sweden. And large customers in Sweden are small customers in The US. So I think that is one of the that that I I I don't regret it. It was still a good

15:44>> thing because we, you know, we're the number one in The Nordics and everything like that, but the markets are small. So you need to grow outside your borders really soon here. That's not that's not an issue in The US, you know.

Nathan Latka

15:54The nice thing about your motion, you have 200 SMB clients and you've got about 550 more enterprise clients is there's a big pool of customers you can upsell to. I think you have pretty healthy net dollar retention numbers. Right?

Net Dollar Retention and Upsell Team

Daniel Melkersson

16:06>> It could be better. Once again, and this is something I regret before this interview, I should have known my numbers better. But but we we really that is one of our key KPIs to grow that because we actually

Nathan Latka

16:19What do wanna hit it? What do you wanna hit?

Daniel Melkersson

16:20>> A 150%.

Nathan Latka

16:22Do you know what you're at now?

Daniel Melkersson

16:24>> 105.

Nathan Latka

16:26105. Okay. Got it. And is that because churn is high or expansion is low?

Daniel Melkersson

16:30>> Expansion is low.

16:32>> We actually started our up sales, you know, more up sales team last year because we've been heavily focused on new new logos and new ARR in the company so far.

Nathan Latka

16:41Tell me about the upsell team. Do they have a quota for expansion? Yeah. What's the quota?

Daniel Melkersson

16:48>> This year, it's it's not that big. 500 US dollars this year.

Nathan Latka

16:53500,000?

Daniel Melkersson

16:55>> Yeah. 500,000.

Cross-Selling Strategy and CS Separation

Nathan Latka

16:56So that would be 10% expansion on 5,000,000 base?

17:00>> Yeah.

17:00And so do you the the the upsell reps, as you call them, that carry a quota, how do you assign do you give them, like, a million dollar book of business and they have to grow it, you know, 50% to 1,500,000? Or how do you how do you assign quota?

Daniel Melkersson

17:16>> No. What we they are very, very focused on doing cross sales at the moment. So not not, you know, upselling, know, more seats or raising the price. So we have different product products on the platform. And new users are very focused on on one, the initial product, and now they sell the other products. And they have they are very open to do however they want. They focus from the largest ones and going down right now because

17:38>> this is new for us. We don't we don't we try we did it in the CS organization, and this is something we did really wrong. So we had, like, what we we call our customer success success personnel that were doing upsells, which it's stupidest idea. Don't know why they did it. Because they need to take care of the customers first, make sure they're not churning. And when they have time and have an opportunity, they can do

18:00>> some sales. Now we have customer success managers and up sales salespeople, sales managers, which huge difference.

Nathan Latka

18:09Interesting. Well, we'll see how it pans out. Alright? It sounds like an interesting strategy. But in the meantime, Daniel, let's wrap up here with the famous five. Number one, favorite book.

Famous Five: Books, Tools, and Habits

Daniel Melkersson

18:17>> Yeah. I'm I'm actually I have a book here. Choose happiness because you need to be happy as well when you're doing this entrepreneurship thing. So by Kay Pollak, a Swedish, really good writer.

Nathan Latka

18:28Number two is there reading now. Is there a CEO you're following or studying?

Daniel Melkersson

18:34>> Different one. I've been following Ben Horowitz lately because I missed him from before.

Nathan Latka

18:41Number three, what's your favorite online tool for building pinmeto?

Daniel Melkersson

18:47>> Pipedrive for sales and Planhat for the CS organization.

Nathan Latka

18:51Number four, how many hours of sleep do you get every night?

Daniel Melkersson

18:55>> Six to eight.

Closing Summary and Wrap-Up

Nathan Latka

18:57And situation, married, single, kiddos? Divorced, two kids. Still 45 or you have a birthday?

Daniel Melkersson

19:05>> I had a birthday.

Nathan Latka

19:07He's 40 Yeah. Happy birthday. Alright. Last last question, Daniel. Something you wish you knew when you were 20.

Daniel Melkersson

19:18>> Not really. Yes. Yes. Go for it. Have fun. Things will pan out.

Nathan Latka

19:23Guys, there you have it. Daniel's building pinmeto, which is specifically helping gas stations, retail organizations understand marketing across many specific physical locations. They've got over 700 total customers today, about 500 he categorized as enterprise. They're doing 5,200,000 in terms of annual run rate right now, which is $440,000 in March revenue when you extrapolate that out. 85 on the team today, 25 quota carrying reps, some of them hitting a $2,400,000 quota, which is impressive. We'll watch them

19:52closely. He's done this pretty efficiently in terms of capital. He's raised basically $4,000,000 to grow a $5,200,000 business, which is obviously great capital efficiency. So Daniel, thanks for taking us to the top.

Daniel Melkersson

20:02>> Thank you.

Nathan Latka

20:04One more thing before you go. 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 Central.

20:30Additionally, 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 fundraise,

20:52a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to 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

21:13for that at nathanlatka.com/slack. 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

21:33got to 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.

Daniel Melkersson

21:40>> See you.