How Qualifio Reached Nearly $7M ARR with Just Under 300 Customers Across Europe (Interview with Co-Founder and CEO Olivier Simonis)

Introduction and Olivier's Background

Nathan Latka

00:00Hey, folks. My guest today is Olivier Simonis. He is the creator of Qualifio and a few other companies, including 87 Seconds, Europe's leading video content agency, which he sold in 2018 to DataWorks. He'll step down as Qualifio's CEO in July and stay as chairman. He's based in Belgium and started his professional career at PwC in DC and is the father of two sons. The company Qualifio is playing in the engagement and data capture SaaS platform space.

00:24Olivier, you ready to take us to the top?

Olivier Simonis

00:26>> Oh, that was fast.

Why Olivier Is Stepping Down as CEO

Nathan Latka

00:27Alright. Well, hey, this will be fun. So first things first, why are you stepping down as CEO?

Olivier Simonis

00:33>> Well, I've been doing I've been a CEO of Qualifio for ten years. I've been a cofounder and CEO for ten years. In the company, there are really talented people that I think can do the job at the moment better than than what I can. So I'm 50 now, and I think I have, yeah, also other projects that I want to pursue and and let these talented guys run the company on a daily basis.

What Qualifio Does

Nathan Latka

00:56So you launched it ten years ago, twenty ten, twenty eleven. What does the company do?

Olivier Simonis

01:01>> Well, the company is a as you said, it's it's a SaaS platform, a b to b SaaS platform for interactive marketing, so engagement of communities, and data capture. So it's used by by media or by large FMCG companies when they want to engage with the audience. They want to to to they want they want to know the audience better by

01:23>> capturing PII, intent data, hobbies, etcetera, about their communities.

Pricing and Contract Model

Nathan Latka

01:27And and what are these companies paying you on average to use this technology?

Olivier Simonis

01:33>> Well, the the average revenue per user for us or per per client about $25,000 per year. K. So it's it's really the enterprise segment, and they pay us a yearly license for unlimited use of the tool.

Upsell Strategy and Expansion Revenue

Nathan Latka

01:49Got it. What sort of upsell metrics allow you to drive expansion revenue? Is it product upselling, seat upselling, utility based upselling?

Olivier Simonis

01:57>> It's a bit of both. So we very often, we start with, like, one brand in one country. You would start, for example, with with Lays in Belgium because that's where we're based in, and then then you would upsell to Doritos and Quaker. And then after Belgium, you would upsell to France and Spain, if we talk about PepsiCo, for example, which is one of our clients, plus the number of users as well, plus some premium features that

02:27>> we are also putting on the market. So there are different dimension for us to be able to upsell.

Customer Count and Geographic Focus

Nathan Latka

02:34And how many of these customers are you now working with today?

Olivier Simonis

02:38>> We are working with about three hundreds of these customers, so a bit less than 300 customers across Europe. So 99% of our clients are in in Continental Europe. Yep.

ARR and Year-Over-Year Growth

Nathan Latka

02:52Now can I take that ACV you just gave me times the customer count? You're doing about $600,000 a month in revenue.

Olivier Simonis

02:58>> Yeah. We are we are slowly but surely reaching 7,000,000 US dollar in in ARR. So indeed.

Nathan Latka

03:06Well, congratulations. Now where were you a year ago?

Olivier Simonis

03:12>> Well, it's a good question. We were basically 25% lower in in ARR.

03:19>> Because, yeah, the COVID crisis did have an impact on our activities. We were we used to be growing around 50% a year. Last year was was rather positive, but we we we slowed down the growth a little bit because we we were impacted by sectors like travel and sports and entertainment, which is which is quite an important sector for us. And, yeah, most of these companies, they stopped investing in new martech tools and and slowed down

03:49>> on their investments. So there was a bit of a slowdown of the growth for us, but it it it, yeah, allowed us to focus on on capital efficiency and and also, yeah, the the fact of of launching new models. And so we're ready to to grow again at the pace where we're growing in the past.

Capital Efficiency and Funding History

Nathan Latka

04:07Olivier, how do you manage capital efficiency?

Olivier Simonis

04:12>> Well, I think I think you have to be super, super cost conscious. It's interesting to look at the history of Qualifio. We used to be bootstrapped for about six years on on our existence, and then we raised series a in two at the end of two thousand seventeen, rather small now, which is only €3,000,000 with with pension investors. Then we had more money on the bank account, of course, and we kind of lost a bit of

04:40>> this capital efficiency or this cost efficiency of cost obsession, cost consciousness that that we had. And, yeah, I think we with the crisis, we went back to basics. That is to say, look at every euro that is going out of a bank account and and be super cautious and and and and try to think about what this euro is gonna bring. And, yeah, basically, that gross EBITDA back to back to back to positive for us.

Nathan Latka

05:10And and when you raised it 3,600,000 in 2017, what was revenue then?

Olivier Simonis

05:15>> It was around €1,500,000, so it's about about 2,000,000 US dollars. Mhmm.

Nathan Latka

05:24And and can I ask what valuation you raised 3.6 at?

Olivier Simonis

05:27>> Well, it it was a very standard times times five valuation. I mean, we we are we we we can follow the just we were valued at at the standard SaaS valuation metrics.

Nathan Latka

05:43That'd be about 10,000,000 pre-money and 13,000,000. In this in

Olivier Simonis

05:47>> this area, I guess.

Nathan Latka

05:48Yeah. Interesting. What would you how do think about the company's value today?

Olivier Simonis

05:53>> Oh, sorry. I didn't get that.

Nathan Latka

05:55How do you think about the company's value today?

Olivier Simonis

05:58>> Well, to be to be honest, yeah, I suppose it's it's it's following the same path. I think we we we are valued around the same the same multiplicator. I think the multiplicators have really gone up in that space. We we have not been growing as fast, as I said, as fast as in the past, but, yeah, we we are we are quite sound. We have a great team. We have really, like, more key customers.

06:29>> We are not really obsessed by an exit nor by a series b at the moment. So to be honest, we don't care too much about how much is the company valued. We try to focus on on on what we do and growing the business and keeping the customer satisfied and the team satisfied because, I mean, it's quite a challenge these days to to keep the team satisfied. You You have to have all these people that are

06:54>> super bored of staying at home. And and, yeah, we we we used to be a company that was very strong on on, yeah, atmosphere and and events at the office, and and and, of course, all these activities have been completely stopped, so it's kind of challenging to keep people at the same level of motivation. And and so, yeah, our focus is really there at the moment rather than than than looking at the series b or a

07:23>> potential exit. I mean, that that might, of course, come later on, but we are really not proactively looking for that.

Profitability and Team Size

Nathan Latka

07:30And are you profitable today?

Olivier Simonis

07:32>> Yes. We are breakeven. Yes. Profitable, I wouldn't say, but we are we are breakeven. So it means we have no pressure to to we have to raise money or to find a financial solution.

Nathan Latka

07:43You talked about team and culture. How many folks are your team today?

Olivier Simonis

07:47>> Today, it's a bit less than 80 people in the company, spread across four offices. So our main offices is in in Brussels, in in Belgium, and then we have sales and marketing offices in Madrid, in Paris, and in Amsterdam.

Nathan Latka

08:01Mhmm. How many engineers of the 78?

Olivier Simonis

08:05>> It's about half. Half are work are working on on on the product. If I if you take the product and R and D team, including the DevOps, it's about it's about half of the company. The rest being being sales marketing and and g and a.

Sales Team Structure and Quotas

Nathan Latka

08:19How many of the sales folks actually carry a quota?

Olivier Simonis

08:25>> Well, it's it's actually more most of them, except we have two SDRs, which are a bit of a different approach, but all the rest, they they carry quotas. Yes.

Nathan Latka

08:37So so how many carry quotas? About fifteen, thirty?

Olivier Simonis

08:41>> At the moment, the the sales team is about eight people. Eight people. Okay. Yeah. Yeah.

Nathan Latka

08:46One of the big one of the big things is is scaling it's actually scaling your your sales team. Right? So how do think about hiring new sales reps, ramping them up? What quota do you give them in the first year?

Olivier Simonis

08:57>> Yeah. That's that's a good question. No. No. Because we we we are, as I mentioned, pretty strong in continent Continental Europe, or the questions that we are now asking ourselves is what about UK? I mean, biggest digital marketing market in Europe. And and for this now, we are weighing the options of of hiring people in The UK, working with partners

09:27>> locally, and to answer your questions, When we we we have quota based sales guys, the average monthly that we ask them to to to to bring in is around 3,000 US dollars of of new of new MRRs.

Nathan Latka

09:47Of course, with a ramp up period. In the first twelve months, if they add $3,000 each month for twelve months, that's $36,000 of new MRR or about Yeah. 500,000 of ARR in the first year.

Olivier Simonis

09:59>> Yeah. Except except that, of course, there is a ramp up period, so we don't expect anything from them the first six months. And then we expect half of the target, the six months, that are following. But, yeah, we really expect

Nathan Latka

10:15Your fully ramped folks, though, are adding about 500,000 in ARR. That's their target quota.

Olivier Simonis

10:19>> Yeah. Yeah. That's what they should they should be doing.

Nathan Latka

10:24And and, Olivier, if they hit quota, what's their full on target earnings? Is it about a $100,000, a $150,000?

Olivier Simonis

10:32>> Well, it don't don't forget we are in Europe, so it's not the the market is a bit different. So it really depends. I mean, we have we have senior folks, so we have more we have more junior folks. Yeah. The the the the on target earnings is is is more or less I mean, if I take a a big approximation around 50/50, and that would be, like, 50 k fixed and 50 k on target earnings.

Co-Founders, Cap Table and CEO Succession

Nathan Latka

11:00Yep. That makes makes That would be an average. That makes a lot of sense. So so taking back to, again, personally, you have some ideas you've written down. You wanna go build them. You're gonna step down as CEO. Are you the sole owner of Qualifio besides the investors?

Olivier Simonis

11:13>> No. We we are actually two cofounders, and, yeah, a bit atypical. We were both in our forties. We were both, yeah, reaching forties when we decided to to step out of our employee job to start the the entrepreneur adventure a bit on the the late at the late I mean, not not super Ed, you're still early. 40. And, yeah, my my cofounder, Seth, she used to be the CTO. And, I mean, he he's knows he has

11:44>> now stepped down as CTO, and we have a a great CTO who replaced him about a year and a half ago. So he's still working in the company, but as a chief innovation officer. So we're both founders who still own the majority of the shares, and now the, of course, the investors that have joined us three years ago, they own the rest. And also, the team owns warrants. So we decided two years ago that that we

12:12>> wanted to have an employee stock option plan, not limited to a few key people, but open to the whole company. So we have now about 90 people of the employees of the company that own warrants of the company, and and they can they will be able to exercise these warrants to to have shares.

Nathan Latka

12:32On a fully exercised and fully diluted basis, how large is the employee option pool?

Olivier Simonis

12:37>> We we we made it at 10% of the

12:40>> cap table. Pretty standard. Yeah. Yeah. Then it was it was a bit diluted. No. I think in total, it's it's around 7.5%.

Nathan Latka

12:49And then investors own something between, what, 10 to 20%, and then you and your Yeah.

Olivier Simonis

12:54>> We we have one kind of friend and family first, our business angel, and then the the the the investor who joined us for the series, a, they own around around 30% of the company.

Nathan Latka

13:06So it's

Olivier Simonis

13:07>> it's quite a simple simple cap table that you're 30.

Nathan Latka

13:10Yeah. So so you and your co founder still own, what, about, like, 55% of the degree?

Olivier Simonis

13:14>> You're good at math, Nathan. Well, that's good.

Nathan Latka

13:16I want I'm curious. So so how do you how do you go about finding a CEO to replace yourself here?

Olivier Simonis

13:23>> Well, I know that's a that's a very good question. And and for me, that's a great story because the the CEO who is gonna, yeah, be the full CEO from next month has actually joined the company seven years ago. So he joined the company first as a as a sales guy in Belgium, and then he became kind of the the the country manager, a sales country manager in Belgium. Then he became the the the head of

13:49>> sale. Then he become the he became the COO. And and since January, we are both co CEOs. So it's really someone that that knows the product, knows the company, is is fully aligned with the values, live the values. I mean and and I think it's a great key to success is is to have someone that that is completely aligned with, yeah, with your objective, with your values. There's no bad surprise to expect. He's highly respected by

14:21>> the rest of the team. And, honestly, for me, that that yeah. That makes me quite proud to to be able to have built a company that actually can live without the two founders and and and can really continue without the founders and and will not be impacted negatively on the contrary, I think.

Churn, Expansion Revenue and CAC

Nathan Latka

14:39Yeah. I think that's great. Before we wrap up here with the famous five, talk to me about churn. What's your what's your gross revenue during the last twelve months?

Olivier Simonis

14:48>> Well, it's it's it's quite stable, to be honest. It's we we have a churn of about 10% a year, which is rather standard for for this kind of of SaaS product. It has gone up a little bit at the beginning of the COVID crisis because of a churn lead to to travel sector and and cinema companies and and, yeah, attraction parks, etcetera. But most of it was was basically where contracted to get to freeze because because people were

15:21>> not just at the office to operate the platform. So so it it went up at that at that time by 50%. And now we are really back to the the the average churn rate that we used to have around around 10% yearly. So

Nathan Latka

15:37And how much expansion revenue do you have in the same cohort?

Olivier Simonis

15:42>> Yeah. That that that's a good that's a good question. It's yeah. In in terms of new new biz, when when when I say we are growing the the business, it's it's about two third is coming from new biz, and one third is coming from from expansion of existing contracts. So, yeah, that's Yep. Upsell that are that are linked to new countries or new brands or new users that are that are joining the platform.

Nathan Latka

16:12Yep. You've added about a million ARR over the past eight to twelve months. You're saying about one third of that new million ARR, so about $350,000 came from expansion of historical customers.

Olivier Simonis

16:20>> Exactly. Yeah. It makes a lot of sense.

Nathan Latka

16:22So is net dollar retention above a 100%, would you say?

Olivier Simonis

16:25>> Yeah. It's around that. Yes. Yeah.

Nathan Latka

16:27Very good. Alright. And what are you spending to get one of these new customers in terms of CAC?

Olivier Simonis

16:32>> Sorry. In terms of CAC, Yeah. We we we are spending around around 15 k. So we we can say that or after after the first year, the the the new customer are completely,

16:47>> yeah, profitable.

16:48>> Yep. That makes good sense.

Famous Five

Nathan Latka

16:49Olivier, let's wrap here with the famous five number one favorite business book.

Olivier Simonis

16:53>> Oh, I didn't I didn't I I sorry. I didn't prefer that at all. Didn't Okay. I just I didn't know.

Nathan Latka

16:59Top of your head. Look.

Olivier Simonis

17:04>> Favorite business book. It has to be a business well, I I would say predictable revenue because that's so that that's such an easy answer, but that's one we have been using a lot to structure our sales team.

Nathan Latka

17:16Number two, is there a CEO you're following or studying?

Olivier Simonis

17:24>> There's a CEO I am following.

17:28>> I think I think that's to be honest, I I don't have kind of a guru mentor, but we we have put together a CEO a CEO of of saascom CEO club of SaaS companies here in the the French speaking area of Belgium. And to be honest, I'm I'm very inspired on a daily basis by my folks that are doing the same job that that I am.

Nathan Latka

17:52So the name of that group?

Olivier Simonis

17:54>> Oh, it's just the the it doesn't have a name. It's just the the CEO SaaS Club around here, but I think that's the that's for me a great inspiration, more than than famous, CEOs, to be honest.

Nathan Latka

18:08Number three, what's your favorite online tool for building a business? What what's man? Your favorite online tool.

Olivier Simonis

18:16>> I didn't get that.

Nathan Latka

18:17Your favorite online tool for building a business?

Olivier Simonis

18:19>> Okay. Well,

18:24>> to be honest, I think I think Slack really changed our lives at Qualifio, and and especially when when you're a CEO and you want to be involved in everything happening in the company without too much effort, I think, yeah, for me, Slack Slack really changed the way I work.

Nathan Latka

18:42Number four, how many hours of sleep do you get every night?

Olivier Simonis

18:46>> Seven, more or less.

Nathan Latka

18:47And what's the situation? Married, single kiddos?

Olivier Simonis

18:51>> Married, two kids. Love it. 14, and 13.

Advice to Younger Self

Nathan Latka

18:57Take a small last question. What's something wishing you when you were 20?

Olivier Simonis

19:01>> Something I wished when I was 20.

Nathan Latka

19:04Something you wish you knew.

Olivier Simonis

19:08>> Yeah.

19:13>> These these are hard question when you have not prepared.

Nathan Latka

19:17Want them off the top of your head, not scripted.

Olivier Simonis

19:20>> Probably probably that that I would get so much pleasure and satisfaction by creating my own company. So I'd probably have done it earlier had I known how much I would love it.

Nathan Latka

19:36Guys, Qualifio founded back in 2010. They've scaled from $5,400,000 in terms of run rate last year to 6.6 today. Healthy growth rate. They've done been done it pretty capital efficient. 3,600,000 raised and that's it in 2017. 78 folks on the team today, 38 engineer, eight sales reps. Again, helping you understand and collect data across all of your different digital channels due to the interactive content they help you set up. We'll see what happens next. Olivier, thanks

20:03for taking us to the top.

Olivier Simonis

20:04>> Thank you so much, Nathan.

Nathan Latka

20:07One 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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