How PLIPAG CEO Cassio Pagnoncelli grew to $120K revenue and 600 customers in 2021.

hey folks my guest today is cassio he's building quote to cash for smbs playback.com.br if you want to follow along his 50 word bio short and sweet passionate computer scientist in the fintech space he's been at hsbc ebank which is soon to be listed and again now co-founder of p-l-i-p-h-g cassio you ready to take it to the top yes how are you doing all right i am well all right tell me about this business here so what kinds of clients are you typically working with good uh the only quick quick reply or the long reply quick reply okay so we tackle uh small mid-size it uh recurring uh recurring services businesses okay and name one of them private schools unions we have a lot in brazil agencies offices rentals there's a lot of businesses let's talk about agencies so an agency does you know let's say they do 100 000 a month in revenue from 10 different clients how can they work with you exactly well um this is very interesting because uh payment culture is different from country to country uh when we started the business in brazil we realized that most of these small business owners they spent a lot of time uh not only uh handling all the the the payment method but also conciliating and in the end of the day actually they spent about 10 15 of their month dealing with all of that uh stuff and they didn't really need an erp or crm they actually they most of our customer base they don't know what a crm is and when they know what the near p is they don't want it because it's just too much um so we decided to create a a super super thin system that would uh take care of the accounts receivable and provide an amazing user experience so costco let's be really specific there's an agency that has the customers that pay them you know each day 10 customers that pay 10 grand a month to that agency in revenue how can you help that agency brilliant so right now if you're in brazil and you have to take care of those those those customers you would spend about two days in your month uh issuing what we call baleto this is a one of the payment methods we have in brazil we have to conciliate you have to uh handle them directly with the bank and you will deal with all the requests your customer will have so if you use bleedback you will just add your customers in this system you will subscribe them to your recurrences and that's it so your two days becomes two minutes per month so that's your work so you pack this what specific cost you what specifically though are you doing are you helping them invoice their customers or are you bringing are you turning monthly revenue into upfront cash or factoring invoices what are you doing yeah everything so basically we our main engine is a payment processing uh system so we do process overdose payments just like stripe would do um but we we don't do um online we do uh our public is our audience is roughly offline uh businesses and well uh there's a lot of things in cash roughly everything from quotes until until cash which is which is processing those payments so they can come to you and do all these things from issuing the invoice to once the invoice is signed you can advance them cash until the invoice is paid you can do the whole thing exactly so uh we help them manage their customers we help them with intelligence we provide them uh a portal for their customers to get those billings get those uh invoices get them get their receipts take care how many customers are you working with down today right now we have over 600 active merchants and over 20 000 payers in our customer base got it so 600 companies and then 20 000 customers there now how do you make money from these 600 customers so we take uh we have a take uh um a percentage fee of all every money that every transaction that comes through the platform we what's that range like one percent or more well effectively that's um [Music] 0.99.98 so it's around one cent i see and so what is the average customer you have 600 what's the average one put through in terms of volume each month so usually those businesses put around oh let me convert to dollars that's about ten thousand dollars in average eight eight to ten thousand dollars so that's that that's the size of a business with uh two three or four or five employees got it so so 10 grand going through one of those businesses and you're taking one percent do you make about a hundred dollars per business per month something like that yeah something like that yeah okay very cool give me the back story here where'd you launch uh well we launched our mvp back in 2018 uh me and michael found that we were we left ebanks banks is uh now uh on unicorns and grew organically uh for in the sector and we saw an opportunity uh in the brick and mortar business in the brick and mortal motor vehicle so there's a lot you know if you're in an e-commerce uh there's a lot of solutions so everything that you need is already there so if you are a commerce there's a pos but what if you're a service uh what do you do so you usually i'm not challenging the product it makes perfect sense to me i understand i have a lot of brazilian founders on diego from rock content others from vladimir where the latest are a pain to work with especially if you're not digital so i totally get the product it makes complete sense i just understand how you've grown so quickly right so you launched in 2018 you got your first customers you're at 600 today how many people are on the team so we are in seven right now seven just yep and have you bootstrapped or did you decide to raise capital we bootstrapped until end of last year and we made our first funding round right now so it's 250. why did you decide to raise 250 000 uh because we wanted to preserve um equity um and we are preparing to make a larger um a larger funding in the next round sorry i'm a little bit confused if you want to preserve equity you wouldn't raise money at all well but time is also a variable so you don't want to go on a loan through all of your time but we want to be efficient as efficient as possible in cash so this is how brazilian vcs look so a little bit different than uh american vcs would would look at eddie so you are looking to build uh an efficient business uh from casio sorry there are people people raise capital and give up equity because they want to move faster to build a bigger pie the flip side to that is you keep 100 of your business and you bootstrap but it's slower growth and a smaller pie so time and equity are usually opposites of each other in this scenario yeah we did something in the middle actually um actually back when we started i would say the the the land the vc landscape was not as developed as it is right now so we wanted to raise with the best so what does it take to raise with the best if you're unproven entrepreneur so let's build a business uh let's do a part and when we mature the business north um then uh we can we we can raise with best and i think we we did we're doing so you raised 250 000 in 2020 correct uh 20 21 early 21 2021 oh this year yeah oh got it okay and and how did you think about was that a priced round or a no um again do you remember was it a priced round or a note with a cap um yes but that's not public infer well regardless if it was a cap or a note right founders choose to fund their business another way this is a show about founding a company so that's why i asked did you did you prefer price drown versus a note for any reason or vice versa i don't know what you actually did um i don't um to be very very honest uh we we set a range in the rounds and we try to accommodate every investor within that within that range and uh we were able to do that so in practical terms yes it was a price round okay got it so so there's not a discount on it it doesn't convert at a 20 discount and when your next price turns an actual evaluation attached to them right actually actually actually we had a evaluation in minds and the vc uh came up came to us and say well i think i think the company is worth a little bit more how about they invest more in the business so would you accept so no discount and then we we essentially took most folks in a seed round like this are selling 10 to 20 percent of the business is that about how much you guys sold uh in the first i would say very close to our 10 cents okay got it that would push you out that would put you at about a 2.5 million dollar valuation when you raise the 250 so you could preserve some equity that's human you said preserve equity yeah a little bit more i see i see very cool okay and so when i look at obviously growth today you know you have 600 customers how did you get those first customers so well the first customers we we we tried a different approach so we're not doing digital markets so we launched the mvp and we tackle we tackled small are private schools within the city so it was roughly based on field sales and we approached every school in the city so we built an inside sales team then um then we found out well uh caltv is not it's not working we need to improve the product and we need to build a digital uh digital marketing process so uh and then we were later going to found out that there is a better strategy which is plg that's what we implemented then the cacal tv start to make sense especially retention what is what is retention today so we are doing we have about uh two percent to two point five percent uh churn uh monthly so a year okay yeah i mean that's very low for this price point um got it so that's right uh actually this is one one i don't remember exactly right now i think i think it's a little bit more now but uh that that's about it okay got it and i mean can i do the math if you have 600 customers that each put about ten thousand dollars to the platform and what you guys process like what six about six million in total transactions last month no no not really uh uh actually actually we had some emotions that were not active uh but right now we are over i think very close to 15 million are in in in in gmv for the last one one year in dollars but what about last month though do you know uh let me see that was about a million dollars one million yep okay got it so if i take okay got it so what you're saying is a couple of those 600 were not active yeah but both of them were not active part of them were from all the verticals that we don't really look at uh so we aim to some verticals and we bring all the verticals to uh because we are somewhat related um and i think we're quite successful in the in the in the verticals we we attack and cassio because you said you take one percent of gmv and you did a million last month in total gmv is it fair to say your revenue is about 10 000 a month currently yeah about that yeah okay and how do you grow how do you go to twenty thirty fifty thousand dollars a month good uh that that's a very good uh that's a very good point so uh we found that that uh rather than investing growth would have to invest in a very good product that has a lot of retention and beyond that we would need to build a product like growth bring a product like growth approach in the in the system so we we pretty much look at built a an a2r3 uh funeral the metrics then and started measuring and doing a b test of what works best so should we should we improve this on boarding so okay so onboarding is the onboarding is the bottleneck so if you improve on boarding by let's say 10 then we can grow the revenue by 30 um and then we go around we went on tickling those um those those points across the funeral and that that's how we started optimizing and we still are optimizing that for you and with all that optimization what does growth look like today if you're doing ten thousand dollars a month today where were you a year ago we where i believe we are about two thousand dollars or less okay got it so nice nice growth and you mentioned cap earlier what are you spending to get a new customer right now right now uh depends on where you look at but uh our general our general attack is about the missing dollars i have the numbers in in brazilian yeah uh that's about thirty dollars okay got it so nice payback yeah and just about uh twice that much to have an active uh negative merchant yep yeah very cool so 30 bucks for a trial 60 bucks to make sure they're active and they're paying you which is great team size of seven how many engineers so we are in one two three four brought one two three four we brought the fifth yesterday oh very cool and it's the co-founders it's just you and one other guy or gal yes uh me and bento so bento is this yeah company um and uh we're we're a very lean company i would say so you guys just you split equity right down the middle at the beginning or something different yeah we did quite fair to be honest 50 50. yeah okay fair enough until january we had only it was only me and my co-founder and uh in a sales girl so i had to build the whole system my my co-founder had to you know do old sales by himself and by now but by that point we had process over a million million dollars casio good stuff here we're rooting for you let's wrap up with the famous five number one what's your favorite book my uh zero to one number two is there a ceo you're following or studying again ceo that you're studying uh the last one i thought was from zumato i met him in london a couple of years ago right right after what's his name uh [Music] that's fine no problem what's that what's the name what's he's the ceo of which company for the matter okay number three what's your favorite online tool for building the business uh i like pipefi an excellent yeah they they are a bpo software number four how many hours is how many hours of sleep do you get every night uh these nights three hours three and a half that's not healthy at all no it isn't but uh you have to be honest so um if you work six hours seven hours eight hours a day you won't get your business up and running so you have yeah but that's not healthy the last thing i want to promote on this show is that people should get no sleep to get their startup going why are you compromising your health for the sake of the startup i'm not i'm not and uh if i can tell you uh most of the stories that i see so when you see a ceo say yeah i work like four five hours a week well when they reached that point they had already built a business no no no no no i'm not talking about the world this is casio i'm not talking about working four or five hours a week there are plenty of founders that are working their butts off working 12-hour days but they're getting seven hours of sleep you can't survive on three and a half hours of sleep that's i mean it's not healthy yeah but i didn't say it i do sleep uh three hours a day every day these nights are three hours and i usually sleep like six or seven or eight okay that's what i asked was how many hours of sleep sleep do you get got it so just last night i found it not a lot understood yeah yeah yeah and what's your situation today married single kids um no i think i'm too young to marry all right no kids how old are you uh 33 33 last question what's something you wish you knew when you were 20 um i wish i would have traveled to other places earlier and uh you know have been taking more risks guys there you have it brazil they're helping brazilian companies especially ones that are not online manage getting customers sending them invoices factoring those contracts basically full cash to quote model or quote to cash model they've got 600 customers with over 20 000 customers of their own on the platform they've crossed over 15 million dollars in volume we're from two thousand dollars a month to ten thousand dollars a month in revenue over the past 12 months raised 250 thousand dollars at around a 2.5 million dollar valuation this year with their team of seven casio thanks for taking us to the top thank you so much uh 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