Piwik Revenue, Valuation & Funding (2024)

[00:00] Hey folks, my guest today is Maciek Zawadzinski and he's building a company called piwikpro, p I w I k dot pro. It's a privacy friendly alternative to Google Analytics. Maciek, you ready to take us to the top? [00:12] >> Yes, thanks for having me. [00:14] Competing with Google Analytics is not easy. So help us understand why are you different? Why are people switching to you? [00:19] >> Sure, so the shortest way we can call piwik pro, it's a privacy friendly analytics platform that is alternative to Google Analytics. And we fight by giving the users control over the data and complying with the privacy laws. [00:38] Very cool. Now give us a sense of growth here. How many customers are on the platform today? [00:43] >> We work primarily with enterprise customers and we have over 200 of large organizations as our customers. [00:51] And what does enterprise mean? What are they all paying you per month on average? [00:55] >> So I would say, let's start with the organization size. So typically these are organization that have more than 5,000, more than 10,000 employees. Sometimes they have hundreds of thousands, but let's say that's probably minimum size of the organization that I would call enterprise. And our average contracts is way above 20,000 annual recurring revenue. [01:22] Okay, and what did you do or what are you doing right now in terms of monthly recurring revenue? [01:27] >> So in terms of monthly recurring revenue, we do somewhere in the vicinity of $525,000, $530,000. [01:38] A thousand US dollars? [01:40] >> Yes, that's in US dollars. [01:42] Okay. And where were you exactly a year ago? So we can calculate growth rate. [01:45] >> So we if you take a look at the year over year growth, that's somewhere around 30% that we did compared to the last year. [01:55] Okay. What does that mean? I mean, do you know what your revenue was monthly about a year ago? [01:59] >> So we start it was somewhere around [02:04] >> 400, 400 something monthly recurring revenue. [02:09] That's great. Well, this is great growth. So where is most of the growth coming from? Are you expanding old customers or finding brand new customers? [02:17] >> So we have both. So we have actually quite nice success last year with our net retention rate. So we did over 110% we are on track to do more than 110 this year as well. [02:29] Congrats, that's big. [02:31] >> So we are like, of course, this includes churn and upsells. [02:36] What were those percents? How much churn and how much upsell? [02:40] >> I don't have this number at hand, but probably around less than 10% churn and then more than 15% of upsells that Yeah. [02:52] 20% upsell, 10% churn will be one ten net. [02:56] >> Yeah. Yeah. Yeah. [02:57] Okay, and what are you upselling? So why would someone pay you a thousand bucks a month versus $2 a month? [03:03] >> So there are a couple of reasons, but the largest two contributors were the traffic increases and as COVID-nineteen unfolded, we have seen a lot in the government sector, finance sector, healthcare sector, which are among our top sectors when it comes to the customers. So our pricing is volume based, so this increases. We also increased our pricing plans itself for the new business, which had some impact also for the renewal of the contracts. And we do a [03:37] >> bit of the upsells of the modules, but currently you have just the analytics platform or analytics platform with CDP. So for those customers that don't have CDP yet, we upsell them additional module. [03:54] Well, this is a great story, Maciek. I wanna get more into pricing in a second, but first tell me how capital efficient have you been? Have you raised additional capital outside of the 2,000,000 in 2017? [04:03] >> Actually, our story is that we spent off piwik pro as a product business from our services business. And this services business contributed over the years around 2,000,000 as well. So in total of the capital that we raised, that is somewhere in the vicinity of 4,100,000. [04:24] But the 2,000,000 raised in 2017, that was from investors, the service. [04:28] >> From investors, that was outside new money. And the 2,000,000 were basically the profits from the services business that's where we spin this company. [04:39] How much did the service business do in 2017 in total revenue? [04:44] >> I mean, this is, I guess this is not related revenue to piwik process. [04:49] I understand that, but the profits feed into piwik pro, that's what I wanna understand. [04:52] >> Yeah. So the services business was doing anywhere from 500,000 to 1,500,000 profit per year. [05:02] And is that still going today or you shut it down? [05:05] >> No, no. We we spin it off and it's still going on. It's it's actually grew. It's it's doing even better now. [05:11] What's the website to the agency? [05:13] >> Clearcode.cc. [05:14] Clear what? [05:15] >> ClearCode, like coding. Clearcode.cc. And this is the company that specializes in building custom advertising and marketing technology. And because we had this experience in their marketing technology space, we started investing in the product and we built piwik pro and then finally at some point we spin it off as a separate component. [05:39] >> Makes a lot of sense. [05:40] Now does clearcode.cc own equity in piwik pro? [05:43] >> No. [05:44] Okay. So how did you put 2,000,000 from the agency into piwik [05:47] >> That's pro without any of that a state from now, but it used to own the equity when we were adding the capital. But right now, after the spin off, it's a same shareholder structure pretty much, [06:03] >> this is a completely separate entity. [06:05] Maciek, how much equity do you own currently in piwik pro? [06:09] >> So I own over 40% with additional voting rights that gives me the control. [06:16] So you control the company. Who owns the other 60% of the equity though? [06:21] >> It's employees, [06:24] >> former founders as well as investors. [06:27] How much do investors We [06:30] >> have investors [06:33] >> own somewhere around 20%. But it's not only for the primary, but they also did some buybacks from inactive Founder, as well as we have a sizable employee pool, well as management pool of like 10 plus percent. [06:49] Okay, 10% there. So 10% employee option pool, Maciek owns more than 40% investors own, 20% that 70 there. So former founders still own about 30%? [06:59] >> Yes, yes. So there is still one inactive founder that owns, it's probably, I probably there is some miscalculation, but he still have like a double digit percentage in the company. [07:13] Understood. And the 2,000,000 you raised in 2017, do you remember what valuation you raised that at? [07:18] >> We raised it at, [07:22] >> I will have to recalculate it to US dollars because it was in Polish zlotis, but that was in the vicinity of 7,000,000 pre money. $7,500,000 pre money. [07:33] Okay, interesting. And then are you looking at raising capital today or no? [07:37] >> So actually we got quite nice offers, term sheets for our next series, but we decided because we've just launched our freemium model and we see a big upside potential in that in accelerating our growth, we decided to use that facility from our existing investors to accelerate this growth and raise at a much higher value [08:03] So existing investors put in more than the $2,000,000 No, [08:08] >> they haven't put, but we have an option to raise debt from them right now for the next year. [08:14] How much debt would you raise if you did do it? [08:17] >> We will rise probably, so this will be some bridge between the Now and Series B. And we'll probably need another 2 to 3,000,000 to accelerate the traction of our premium model, and then we'll raise a proper Series B next year. [08:36] And what would you value the company at today? What are some of the term sheets that you turned down? [08:41] >> So I think I will leave it up. So the multipliers were in the vicinity of 10x annual recurring revenue. And we feel that we can raise at a much higher valuation if we execute flawlessly on the premium model. [08:57] So you feel like, I mean, those offers at a 10x multiple, then you're talking like 65 to $70,000,000 pre money? [09:01] >> Yeah, yeah, exactly, exactly. [09:03] Very [09:04] interesting. Now, if you did raise debt, what interest rate would you pay on that debt from investors? [09:10] >> So the debt which have the components of interest as well as convertible if we don't pay it back and then interest rate is super attractive so it's under 8%. [09:25] Under 8% interest. If someone gave you debt at 10%, but you didn't have to like, there were no covenants, no warrants, no crazy terms. Would you look at a little higher interest rate for cleaner terms or no? [09:37] >> I think we might. And we actually spoke with a couple of companies about that. And that's probably So we have actually three options for that. So we have this option from our existing investors. We have a bank financing that is quite attractive because we were pretty much breakeven for the last twelve months. So we were quite cautious over the COVID with spending, but still to grow well. And the last option would be the loans based on [10:12] >> the monthly recurring revenue, which I think you are referring to. [10:16] Yep, the bank financing though, they typically only do loans against a big cash chunk sitting in your bank account. I mean, I assume you operate around breakeven. Mean, you don't have millions of dollars sitting in the bank, do you? [10:25] >> We still have over 2 millions in the bank. [10:29] Oh wow, okay, okay got it. [10:30] >> Like over maybe between 1.5 and 2 millions. But we really want to like double down on what we are doing now. So there will be significant marketing and sales spending coming up next year, which we are ramping up for. [10:47] So How many people at Piwik PRO are on the team today? [10:51] >> We have 100 people. [10:52] 100 people. How many engineers? [10:55] >> Around half of that are engineers. [10:56] Wow, okay. How many salespeople to quota? [11:00] >> Sales people, eight, seven people and me because I'm actually interim head of sales. I'm very close to the customer. [11:10] What's their quota target? [11:12] >> Depends, like this is 400 k, 500 k of ARR per year. [11:20] Yeah, makes a lot of sense. This is a great story. Listen, and is your CAC still around $7,000 to get a new 2,000 a month customer? [11:30] >> Can you repeat that? [11:31] You told me last year in April that your CAC was $7,000 to get a $2,000 a month customer, is that still accurate? [11:37] >> Yeah, it's still accurate and that's because we didn't really ramp up spending on sales and marketing yet. So we rely a lot on organic channels and inbound and that CAC hasn't changed. [11:51] Okay, Maciek, let's wrap up with the Famous Five. Number one, favorite business book. [11:55] >> Good to Great. [11:56] >> That's a good one. [11:57] Number two, is there a CEO you're following or studying? [12:00] >> Julian Shapiro, the angel investor and founder of Demand Curve. [12:05] Number three, is there an online tool that you're following or studying? [12:09] >> Yeah, I mean, this is trivial, but I would say LinkedIn, which gives so much information about organizations that we work with. [12:17] Number four, how many hours of sleep do you get every night? [12:20] >> I try to get seven, eight and usually I'm successful at that. [12:25] What's And your situation? Married, single, kids? [12:28] >> Single with two cats. [12:29] >> Two cats. [12:30] Okay, no kids. And how old are you? [12:34] >> Once again? [12:35] How old are you? [12:36] >> Yeah, I'm 35. [12:38] >> 35. [12:39] Last question, Maciek, what's something you wish you knew when you were 20? [12:44] >> Probably I would like to knew how to build a company because that was the time I founded my first company at 20 years old. So I knew nothing about creating the business then. It was a lot of faults on the way to get where I am today. [13:02] Guys, you have it, piwik pro and alternative to Google Analytics that cares about your privacy. They were doing $400,000 a month a year ago, now doing $530,000 a month or over a $6,300,000 run rate, serving about 200 customers. Maciek still owns over 40% of the business, controls it with shares, but they've got investors that put in $2,000,000 with a $7,500,000 pre money valuation in 2017. And they turned down recently term sheets in the 60 to $70,000,000 [13:25] raise as they look to bootstrap to see how their premium model performance before thinking about a raise in 2022. We'll see what happens. Maciek, thanks for taking us to the top. [13:32] >> Yeah. Yeah. Thanks. [13:35] One 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 one [14:00] p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two p. M. 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 [14:21] an acquisition, a big fundraise, 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 wanna 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 [14:43] saying. Sign up for 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. 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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 amacha gzawajinski he is the ceo of piwik pro and clear code analytics and advertising technology expert entrepreneur and startup founder magic you ready to take us to the top yeah yeah all right thanks for having me you bet so privacy friendly alternative to google analytics p p i w i k dot p r o tell us how a customer's using you and how do you charge for the product sure sure so we are a privacy friendly alternative to google analytics and uh we uh we charged well like our average subscription is 20 to 50k a year it's a yearly subscription uh we host software either in cloud or private cloud or on-premise okay so just to be clear if you look at all your customers right now divided by your total turn your current revenue they're paying on average you know two thousand dollars a month something like that um it would be the average on the full portfolio would be probably uh a bit less than that but definitely that's true for the last uh 12 months of subscription so more maybe more like 1500 across your entire customer base yeah yeah yeah exactly and now you told us on the last episode which is episode 817 back in october of 2018. it's been a while man i'm glad to see you again but uh you said a company you founded in 2013 you were serving back then about 400 customers how many are you serving today so uh that's actually interesting because we saw despite our revenue grow grew uh we serve less customers so we have around 200 customers right now uh but since we spoke last time we closed our uh offering for the small business clients and we we focus entirely on the mid-market and corporate clients okay so what have you grown revenue to um so we we are over four million annual requiring revenue uh which uh basically should add up with this 2 over 200 clients times the average subscription that you mentioned yeah so now last time you came on you told me you were doing about 300 000 per month which would be about 3.6 million annually now it sounds like you're right around kind of maybe 4 million annually so and that's you know that's okay growth but certainly not growth that you'd expect from someone that's raised you raised two million dollars back then why hasn't growth been faster so uh the this uh last round uh was mainly dedicated it was partly dedicated to also buy out one of our former shareholders and founders that was uh that is no longer in the company um so we self-financed the growth uh till today uh pretty much like also two million over like uh six years isn't isn't that much uh of the the capital rise and we actually didn't uh glue that much but our portfolio of the clients has has changed plus we uh when we started uh the company we started as a a subscription service based also on the open source product piwik which is now called matomo and in the meantime we developed a new product uh which is a totally property platform developed from scratch on the newer technology and we were over this last two years we were also uh working on migrating these customers from the legacy product to the new product so uh when you look at the last two years we were maybe having like 10 percent or so revenue from the uh from the new product um and the rest was legacy two years ago and now the product is much more major and we have uh over two thirds of the customers and revenue uh going from the new product and that's a quite big achievement because if you look at the growth of the monthly recurring revenue from the new product it is actually like you know uh it went from like 10k to over 200 200 k so what do you think you'll finish 2020 with in terms of mrr um we should finish somewhere around 450 470k now that we we see that like our growth started we started growing again somewhere around like mid last year so we had uh last uh two quarters of the 2019 uh that went very well we are on target for q1 this year so it looks like this growth is sustainable and we'll see how it goes with the everything that is going on with uh coronavirus but uh i think we are on the good way to to actually uh make uh make the targets uh this year and so how much of that two million you raised previously actually left the company immediately to pay out i guess it sounds like an old founder mm-hmm um so uh that was uh so that was that was a bit more complicated because we also owned a software business part uh software services that doesn't count towards the the the webinar yeah so that so that uh there was uh the round was uh bigger than two million because there there was the uh what was the total round size so so the total the total was uh over uh four million out of two million more than two millions wants to buy out the the existing ic okay and have you raised any additional capital since then no no because we we self-finance everything that we need so you're profitable today um so we are not profitable in the product business but we have the services arm which is a software development focused on the marketing technology called clearcode which is the uh our uh let's say uh sister company and we everything that we uh make from the uh software uh development services we really invest in the product so much though just just to be clear because i don't want to be any confusion the the current 360 000 you're doing per month right now that's pure technology correct pure product uh uh revenue no agency no agency at all how much agency do you do per month agency revenue uh it makes uh somewhere around 400 to 500 depending on the amount okay so you'll then plow that money back into the tech product yeah i mean of course like the profit out of that uh maybe to give you a better sense of that so we burned last year one comma seven million uh us dollars yep and how much are you bringing per month today the profit from the company uh from the services company yep how much did you burn last month uh last month hundred twenty ish okay okay yeah and and how so 120 000 net burn which again you make up from from the agency revenue what is the mechanism that allows you to take cash from the agency and put it in the business are you essentially investing in yourself there or how does it actually work uh it's a a holding component so we we have the same uh shareholders in the holding company so we can move the money around so pretty efficiently without conflict of interest i see how many folks are on the team today just the tech side just the tech side is 105 people okay still but still 105. that's what it was that's what it was last to make him on you're consistent it also changed a bit like uh structure-wise so we invested a lot in the for example customer success teams and more like consultancy teams um so the the mix is a bit maybe different uh we do things more efficiently on the technology side but we are still around the same size when it comes to the head count and as a company we think that we will stay this size we we have pretty much all the walls that we need uh so uh except for natural electrician will will stay the the same size and we we plan to grow like we should be able to triple the business without uh growing much of the team of the 105 how many are engineers uh there is around 40. and how many are of quota carrying sales reps um quotas carrying sales reps will be around eight eight okay interesting now has your has your churn profile change so what's gross revenue turn on the tech product these days yeah so that's actually thing that has changed a lot because we uh manage finally to make upsells to work uh so we have last year we had 97 percent uh revenue retention net aggregation uh which is uh which is i think quite good net or gross uh so it's uh i'm not sure if i understood the correct so before before you add back expansion revenue right what was gross revenue churn okay so before we added expansion there was like 20 something so 22 and we had around uh we made up this uh 19 percent or so with the with the absence yeah so 20 lost rev from the cohort that was active exactly a year ago 20 of the revenue churn but you up sold 17 or 18 so net revenue retention is about 98 yeah and are you still i mean what's cac today to get these new higher value customers what are you spending to acquire them um so uh from the marketing uh spending itself uh it's around seven thousand uh dollars per customer um and uh on top of that we would have to add some sales uh expenses because sometimes it's partner traders sometimes it's inbound etc what kickback do you pay your partners uh for partners we pay anywhere from ten percent to uh 25 uh but it's worth to mention that we do still around 85 90 from our own channels mainly inbound yep and now do you pay those partners 10 to 25 uh affiliate fee in perpetuity or only for the first year or something else uh it depends on the relationship because we we do business with uh several agencies and in case they hold the billing relationship with the customer it's in perpetuity in case they just bring customers and the customer designs their contract directly with us it's only for the first year interesting and which agency can you name the agency that that is most effective for you brings you the most traffic so actually the largest partners because this partner program i think we talked about this uh when we when we spoke last time we were just starting that so the largest partners haven't brought yet big deals but there are some in the pipeline so the the partners that worked out really well were smaller uh smaller partners and we have agency for example in denmark called abstract or we have a partner in um in netherlands that's called candid goods so it's another big names uh but what we saw is these smaller partners are much more engaged and um and they bring actual deals we have another partner in spain that is specializing in government deals which is one of our biggest sectors and uh they are like you know in the last month i think there are three new topics with them that we are discussing so very good would you ever instead of continuing to fund the 120 000 a month losses in the technology side with market you know your agency revenue would you ever consider raising debt in the technology business and using someone else's money to pay off that burn to drive growth um so we we are considering splitting the companies all together in that case we will uh will probably think about rising depth uh but it's still something that we are going back and forth we are in a very comfortable position uh that we have uh almost no depth uh in the in the holding component and uh and we are break even at the holding company level yeah so uh that gives like you know you much more security than having a debt piling up and you need to go faster and then rise more money and so on so we we we took us this more sustainable uh uh approach which if the recession will come probably will be the the right decision uh to have yeah very good let's wrap up with the famous five number one favorite business book um so i don't have any specific business books except some like you know all classics like uh scaling up or good to great uh but i i really liked the books that tell the story and i think the last one i i uh i read that i really liked was about pixar to pixar and beyond and uh yeah i would recommend anyone who haven't read that to to take a look number two is there a ceo you're following or studying [Music] i'm not following too many ceos but i have a couple like uh and a couple of people known in the sas industry that i really know just name it um so christoph janz from 0.9 capital yep number uh three what's your favorite online tool for building your company uh linkedin number four how many hours i sleep to get every night seven eight hours and what's your situation married single kids um single okay no kids running around all right two cats how old are you um i'm uh 34 right now 34. last question what do you wish your 20 year old self knew my check i would say don't stress out too much like some things take will definitely take much more time than you would expect yup guys there you have it founded in 2013 they are a privacy friendly alternative to google analytics currently doing called 360 000 per month in revenue about 200 customers paying between 1500 and 2 000 per month they've done this by raising just two million dollars in capital they're currently burning about 120 000 per month but they make up that loss with revenues from a different company which is their agency that is fueling the growth of this tech company which is very exciting 105 people exclusively on the tech team of which 40 are engineers eight are quota carrying sales reps economics unit economics on this side of the business ninety-eight percent net revenue retention spending seven to ten thousand dollars to get a new customer for a five to eight month payback period matrix thank you for taking us to the top thanks 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