How Radius Agent CEO Biju Ashokan grew to $3.1M revenue and 200 customers in 2024.

hey folks my guest today is bijou ashokan he graduated from carnegie mellon university back in 2008 and founded two startups in property tech his vision in real estate is to build a software suite aka shopify for real estate agencies agents from across the world to make property buying and selling easier for consumers uh bishop are you ready to take us to the top all right so if people want to follow along the website is radiusagent.com tell us how it works who's paying you today uh it's primarily real estate engines and real estate team leads so the goal of the company is to kind of create a an operating system for real estate agents and teams uh for lack of a better comparison it's kind of like a shopify for real estate agents right where we have agents with everything that they need both in terms of tech in terms of services in terms of benefits everything everything that can make an agent independent or an asian team independent that's what we provide i feel like all my friends that like quit their usual jobs and you know they're like you know what i'm gonna go sell real estate because i'm in austin texas and real estate is hot but then like six months later half of them are now not at in real estate anymore right how do you deal with how do you deal with churn yeah there's a lot of them and i think that's because of uh the intrinsic characteristics of real estate and how it works everyone wants to make money and they think from the outside by looking at instagram that it's so easy to sell a property by just like you know showing a topic but there's a lot going on in the background you need to know a lot about the area the neighborhood you need to know about the paperwork compliance so much to learn so the key is to provide technology that helps them with education and training quickly so that they can get get up to speed and start selling quickly so we have a course called 90 days to success for agents like your friends who want to start with a career in real estate where we train them and we call this the accelerator program so when they sign up what are they paying you per month on average to use the technology yeah about 250 a month is the subscription but more importantly whenever they close a deal they pay us a flat fee for the transaction as well what percent uh it's a flat fee it's a thousand dollars per transaction so whether it's a million dollar house or a thousand dollar house they're paying you a thousand dollar flat fee exactly because it doesn't make sense it's just the same amount of support so paying a commission to your brokerage makes interesting and give me a sense of size in 2020 or 2021 how many close deals on the platform uh so 2021 we had close to 500 i think uh transactions in total this year we are planning to expand to eight more states so we we were just in california in the last year uh this year we're gonna have we just raised our series eight so we're gonna expand to eight new states and we're gonna get to like two thousand agents by end of the year and we are hoping each each agent closes minimum of eight to ten transactions so that's that's kind of that's the kind of deal and how many agents today on a platform 200 wow okay and i mean can i can i take 200 times 250 bucks a month you guys are doing just on that side of the business about 50 000 bucks a month in revenue yeah so if you just take the subscription but if you take uh transaction revenue as well you can calculate about 12 000 rpo region in a year 12 000 are who you mean annual or monthly yeah yeah yes you can take 200 times 12 000 to get your annual revenues of about 2.4 million is what you're saying yes interesting and that's what is that what you did last year we closed the year that's close to 2.1 or 2.2 but this year we already had 2.4 uh in the in the sorry in the first 26 days you've already had done 2.4 million in revenue that's that's what we are tracking towards with the current number of agents and the deals that they close for the year or for just for january so the way we calculate is in january we we have a number right that we made as monthly if you multiply that by 12 2.4 is what we get oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to 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 not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderprep.com and hover over products click on get your evaluation 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 all right let's jump back into the interview okay but you just said last year that's about what you did you're planning to be flat this year or your run rate right now is unrated right now that's 2.4 yep i see got okay so just just to clear up any ambiguity here in december of 2021 uh you did about you did a you know if you did 500 deals closed last year divided by 12 to get an average per month you close about 40 to 50 deals per month so that's 40 000 to 50 000 in thousand dollar transaction deal volume plus another 50 000 a month from the 250 a month fees so you're doing total about 100 000 per month in revenue as of a month ago right okay and where were you exactly a year ago so december of 2020 we hadn't even started appropriate so we were at like 50k per month in revenue just from our subscription products i see okay very cool so so you basically went from you doubled over the past 12 months and what do you plan to do this year triple quadruple we want to do five x's here uh we want to expand what we did in california into eight new states [Music] is it as simple as putting these numbers in a pro forma and saying multiply times another state it's never that simple is it uh we we are the way our product is unique is because we have a solution network of rails relations which works on top of our approach so we have about 76 000 agents using the free product which is a social network and we basically source our agents from that product so every agent who joins us is a through the product that they should interest in the brokerage how do you attract them what's the free product you've built it's like a social network so you uh it has elements of like facebook it has elements of clubhouse it has free academy where you can you can go through courses uh we also have a leading place where referrals and exchange between agents through the platform so it's very very agent specific how did you get the first thousand users on the network though i mean this is not easy to build yeah it took a while it took about three four years for us to like nail that social network product uh for real estate agents to get to a point where agents invite other agents so right now all our users in the free product are have come through our agents inviting other agents this is so cool okay i just saw something very cool on your website at the bottom up i see a pop-up 10-minute radius agent brokerage interview with a very compelling little countdown timer right join the next webinar 258 257 256. is this effective yeah super effective uh it it makes it feel like the the webinar is like gonna start right like in two minutes so people sign up immediately to be part of it uh and we have multiple webinars that run at different times like today like this one i just clicked it says sierra tahani is running it do you run like 10 of these a day or one a day or one a month or what uh about 10 a day you run your 10 yeah we do 10 webinars a day and if you log into our mobile app if you're interested in even if you're not in this video you can find out we also have a clubhouse type of features where our sales team hosts uh rooms where we have recruiting rooms where agents from the network can try and ask questions about our brokerage how do you incentivize i mean is she a full-time are these presenters full-time at radius agent are these people you're incentivizing just to do a webinar to get exposure is our vp they're all full-time employees so she just like i mean i see the webinars with a three o'clock three fifteen three thirty four four fifteen sierra's doing all these basically back to back yeah it looks cool isn't it it's pre-recorded and it feels like it's a live webinar oh i see these are not live yeah but it seems like a live webinar it's uh we use this tool called e-webinar you should check it out yeah i see that you ewebinar.com do you ever get any pushback i mean if people type a question in the chat and then the live presenter never answers it don't they go this is we respond to chat requests life oh i see so it's a record the video is a recording but the chat you monitor yeah super interesting i love that people are always nervous about oh i don't want to do a like a fake live webinar is it live is it not but like this combination seems to work for you yeah and we sometimes immediately call these agents who ask a lot of questions too so our sales immediately gets a call okay you've mentioned uh some funding let's get the back story here when did you launch the business first year 2015 uh i think back then it was just a keynote presentation but we launched our first product at the end of 2016 which was an attempt at a social network in a certain way but that didn't really pick up but only at the end of 2018 our social networks uh where agents invented other regions and in 2019 and 2020 we built a lot of products in the background that would one day help us when you become a bridge 2021 is when we launched the brokerage a full service brokerage and a subscription and a flat fee commission structure and today we've added more things to that uh arsenal we've added our accelerator program uh we've added leads to lead gen as one of our benefits next week we're also launching health benefits as another add-on to our update so we we're going all out on becoming a full success program and how did you how have you funded this when was your first raise first race was in 2015 as a precede and then the second race was in 2018 series and this year two weeks ago was on the season so the 2018 seed how much did you raise then how much okay four million bucks then and then how much did you raise just recently we raised 13.1 for your series a yeah and and why do you need that much capital to build this tool what's expensive it's right now i mean we didn't raise a big pre-seat on the safe round because we were just building the product now we've nailed the business model so now we just want to experiment multiple states increase the sales that's the main chance we want to put some marketing budget to it and when you go out and close the series a for 13.1 million about what valuation were you able to get uh yep we we have a 50 million valuation right now and we want to close the series b in the next six to eight months five zero valuation 50 million that's pre-money or post post money okay so you raise it about a 37 pre 50 post uh with about 1.2 million in run rate does that does that make you does that make you nervous 2.1 perfect okay so again tell me how you get there because there was 50 last year in december like two months ago a month ago there was 50 000 in recurring fees from 200 customers right a month and you're closing oh got it we took an average of closed transactions last year when really they were probably back we ended 2021 uh at a 2.2 2.1 or 2.1 10 million by end of the year yeah what i'm reverse engineering though is okay so if you ended in december which was about a month ago out of doing about 2.1 annually that means you're doing about 170 000 dollars in revenue that month of which right of which 200 customers paying 250 bucks a month made up 50 grand of it and the other 110 000 were from 110 closed deals a thousand dollar transaction fee yeah so in transaction fees when we give them leads uh so we have a lead marketplace when radius generates leaks for our agents they pay a 35 percent commission on top of the flat fees we make little more than thousand dollars yeah so there's that's consistent with what we've been talking about right thousand dollar flat fee or there's a commission as well there is a commission when the lead is generated by rails oh i see and how big is the commission 35 wait three to five or 35 35 of their commission oh of their commission not the deals yeah yeah i'm going holy crap i'm in the wrong business okay so so if they're if they sell a million dollar property and they make sixty thousand dollars because it's a six percent cut you would take thirty five percent of the six thousand or what is that about eight one thousand eight hundred dollars yeah if we give that lead to that if you give them a lead okay that makes sense got it you're not paying anything upfront for the marketing for that lead so they've gotten the lead for free but it's up to them to close it so when they close it we make more i see i see i see okay got it so when you raise a 50 million valuation you're really getting something like a 24x revenue multiple something like that yeah okay and now you mentioned aggressive growth plans why do you want to go into a series b so quickly can you spend 13 million bucks in the next six months no we don't want to spend six months but we just want to raise grow faster and more states because we have this advantage of having 76 000 agents in the network and they're all from different states and space so we could easily turn that switch on and launch our operation different states so we just need the funding to have a sales team and all the doing all the processes yeah that makes sense how many folks on the team today and how many of those people are sales uh right now we're recruiting for six we just have three people in sales uh in fact we had a third one a few weeks ago how many full-time total we have about 16 full time um yes six zero and we haven't we have a product and support team in india and rest of our uh the remaining functions all of the us design customers success marketing bangalore where you headed bangalore very cool yeah i i meet so many fast-forwarding companies where their dev teams are like pune chennai bangalore bangladesh it's incredible talent over there huh what's the going rate right now for senior engineer and in bangalore yeah for 60 to 80k wow that's incredible okay and how many engineers do you have total we have 15 today we're looking to recruit to increase the team size to 30. is it getting more competitive do a recruit top tier yeah who are the big high who who are the big companies over there sucking up all the talent oh there's so many uh i mean i can't name the top five it's there's so many names that i've never heard of in my life who are offering 100ks and 80 kills uh every company in the world i think is setting up a back office in bangalore now yep yep okay talk to me a little bit more about churn what was your gross dollar retention over the past year so that's the thing the average churn rate in this industry uh inherently is really good because it's every agent stays with a brokerage for two to three years uh the average been three years the only agents who john are the agents who give up on real estate completely uh so in the last year we out of the 200 agents we've recruited so far we only had eight agents leave the industry completely but the rest of it stay around got it so four percent churn effectively over a year and then um have you had more than four percent expansion so your net dollar retention is above 100 percent yeah definitely it's just an industry characteristic it's it's nothing to do with uh like if you're if you're able to keep agents for more than three years then then it's on radius right what percent of your revenue was expansion over the past 12 months your revenue growth so uh again most of our revenue comes from transactions so for us expansion revenue is basically us training the agents to do better in terms of number of sales so we've built an asian development team that just focuses on training them to do better giving them more leads uh so it's seasonal and it's also transaction based so it's not a percentage increase if you know me well sure it is uh you can just compare to the same same section each year right so if you look at december 2020 revenue but across your agents versus december 2021 okay um you could okay so you could still do it for the year yeah so what i i can tell you is when agents join us uh before they join us they average about six to eight transactions now they're averaging 12 to 15. is that the right number to measure the number of transactions or is it should be measured deal volume this like add up all the prices of that what they sold it's the number of transactions because we had a flat fee well no you just mentioned if you give them the lead you take 35 percent of their commission for that revenue model it's it's based on the number of the property value but most of our revenue actually comes from the flat fee so like when an agent joins you from some other brokerage what do they usually do in gmv at that brokerage and then how much better do you make them in the first 12 months in terms of gmv yeah isn't that the right message isn't that the right metric yeah so that's one of the main reasons why agents join us when they work for another brokerage before they join us they're used to paying like 20 30 permission to their brokerage for every is actually close regardless of who generates that lead uh so when they join us they keep all hundred percent and they just pay us the thousand dollar flat fee so from an agent's perspective their income just went up from making 120k in a year to like 180 to 200k a year and that's kind of the one of the main kpis that we tracked like how much are we increasing their revenue what was the total gmv of the 500 deals closed on your platform last year uh it was give me a minute you would imagine it would have these numbers on top of my head but it's the one i would care about i'd be like man how do we get to a billion yeah i'm sure you have it yeah yeah i'm gonna guess the audience you guys guessed too i'm gonna guess an average of 300 000 bucks per sale so that would be well california actually let's bump it up 450 000 per sale times 500 i'm gonna guess 225 million we have closed [Music] you are actually pretty close my friend uh we're at 2 15 million close oh come on baby i was almost right on the money all right 215 million that's that's pretty good stuff and then if you you said you want to get up to uh how many closed deals in 2022 want to get to by by end of the year we want to average uh 2 000 agents closing eight to ten deals a year so 16 000 yeah yeah very cool that'd be that'd be a great goal to hit me about dilution right were you the sole founder do you own 100 before the investors i raised three rounds but i'm this one founder okay so what you sold i guess in the series a you total valuation there when you did the 4 million seed what cap was that at or was it a priced round it's all priced rounds uh i mean you always lose about 25 to 30 in in the first two rounds and then it starts getting better when you start making revenue got it so you're a code of saying your seat was eight pre 12 post and i mean pre-seed is also dependent on which accelerator we went to all those when did you do your pre-seed what year uh 2015 and and how much equity did the accelerator take uh i'm not sure if i can disclose it or it's in that five to ten range but which accelerator did you use was it in india or in the states oh here in new york uh oh of course yeah angel pad that's a that's a well-known accelerator got it and what i think their standard deal is like what 100k for five to ten percent something like that i think they do back then 250. now they might have changed it but back then so 250 to angel pad 4 million seed 13.1 series a that's what you raised so you diluted by 20ish percent three times basically yeah got it so you you own about 52 percent of the business right now something like that 53. and and along with the other co-founding team right like you make so many employers and you give away stock options so every round you you probably want to create like 10 or 5 percent stock options that there's that extra dilution there yep yep so so how many do employees own today including like not founders but employees key hires 15. okay yeah so that's fair yeah so investors like 40 or 50 esop pool 15 co-founders about 35 to 40. yeah that's pretty stink pretty darn standard very cool yeah all right anything we missed about your story no uh we can keep talking there's a lot of questions but i know you're it's a 15-20 minute long podcast yeah i know i mean i love it this is a tough space because churn is usually very very high but it sounds like you figure out a way to get it under control and uh i'm rooting for i mean how much is it going to cost you to open a new state and what are the costs associated with that it's more regulatory uh so there's a lot of paperwork that you need to do to get a license in a different state uh and it takes about two to three months but it doesn't cost much uh i think it just costs the cost of managing brokerage so what are you raising all this money for then if they're really a bottleneck is time not money it's time and the sales team and and all the marketing projects uh to get the initial 100 agents to join right i see what do you spend right now to get a new agent on who then pays you you know ten thousand the first year we on cactus about two thousand and agents uh oh wow that's a very i mean well it's like a two or three month payback then right yeah and that's because of the product the social network aspect uh for regular brokerages they don't have the convenience of having a social network of agents using their products so let's take a coldwell banker or remax keller williams they only if you join them you get your part of their social networks because unless you join them you don't get to be part of their network right in our case it doesn't matter which form you work for you can still sign up on our product and start using some of the tools yeah so the product live growth is probably the the most important and unique value for product yeah very cool let's wrap up here with the famous five number one favorite business book oh uh this might be a little off topic but i might i'm a big fan of sir alex ferguson alex ferguson yeah uh so he's written a book called leading so he's a famous sports coach of manchester united number two number two is there a ceo you're following or studying no it's a bunch of ceos there's no one see number three number three what's your favorite online tool for building radius agent what do you mean online an online tool that you use [Music] sigma trello slack zoom you know we use that quite a bit in slack too yeah okay number four how many hours of sleep to get every night wow okay and situation married single kids married no kids one dog okay dog a dog and a startup how old are you 37 37 last question something you wish you knew when you were 20. uh the art of fundraising the art of fundraising coming from a guy that's pretty good at radiusagent.com they have attack arbitrage because of the 70 000 real estates they have in their community they now bring those realtors on their platform feed them leads their full-time brokerage as of last year did about 2.1 million bucks in sales last year hoping to four or five x that this year close to 13.1 million series a just last week at a 50 million valuation his team and the other founders still on about 40 percent of the business employees owned 15 investors the other 40 looking to scale rapidly here again charging uh real estate agents 250 bucks a month to use their platform plus a thousand dollar closing fee plus 35 percent of the realtors commission if the platform gives them that lead 250 million bucks in deals closed last year hoping to scale up this year pizju thanks for taking us to the top thanks nathan you're good at this one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares backend 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 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 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