Reclaim.ai Revenue, Valuation & Funding (2024)

hey folks my guest today is henry shapiro he's the co-founder of reclaim.ai an intelligent calendar assisted assistant used by over six thousand companies across the globe before starting the company he led product and marketing teams at new relic for five years he's based out of portland oregon henry you're a ticket to the top yeah let's go all right so this is this is a super tough space you know x dot ai came on the scene a couple of years ago raised a boatload of money and then basically flash sold for and you know no one made any money basically on that deal recently countless very hot they're i think on your cap table as well what are you doing different in the space where you're seeing like extreme stickiness on your customer base that's a great question um so i think the the first thing is um and thanks for having me by the way of course uh the first thing is i think we we really you know when we started the company our our intention was not hey let's go out and build a better calendar or let's go out and build a better scheduling service um you know we you know we came out of uh obviously new relic and had experienced kind of the pain firsthand of being you know busy middle managers who were constantly just trying to grapple to get every last little bit of time that we could for our priorities and constantly running into that challenge of like the calendar sort of feeling like a debt you have to pay down every week instead of an actual reflection of the work you need to get done and so we we actually came at this problem being sort of dev and monitoring nerds not even thinking about the calendar initially we only were thinking about this problem of like how do you get people and teams focused on the right stuff and i think because we asked that question first instead of asking the question of like well the calendar sucks let's build a new calendar or scheduling sucks let's build a better scheduler um we really tried to hone in on like the workflows and automation that people need and we really leaned into the existing platforms uh like google calendar like calendly um uh instead and so i think part of what makes us sticky is we're not asking people to go out and adopt an entirely new calendar service or platform we're not going out and asking people to adopt in many cases even an entirely new like task manager we're acting as sort of a hub for intelligently scheduling the time that you need and keeping it flexible so that you're sort of able to accommodate other types of commitments um i think the other thing that's a little different about how we approach this space that kind of gets into some of the you know called the secret sauce of the product is um you know we recognize that time blocking was one of those things that like if it was just as easy as me going on my calendar sunday night and blocking out every single event and putting the word busy on it um there probably wouldn't be much software or much opportunity around this space there's kind of two problems that people run into when they try to block their timeout the first is that it's not adaptive so it doesn't sort of accommodate inbound conflicts the second and the one that we really try to address is it's just not realistic you know if you're the kind of person who has a really slammed calendar um you need to be available for meetings you need to be available for collaboration and actually if you block out your whole calendar you're probably creating even more work for yourself because now you've got like people pinging you on slack and saying hey there's no time on your calendar can i get a few minutes you know can you move this thing um and so what we do is we actually kind of act like a circuit breaker for your calendar where if you've got plenty of time you know during the week to get your stuff done we'll kind of look at that and we'll run simulations we run millions of simulations daily against calendars and basically try to figure out like are you running out of time to do this thing and if the answer is no we'll put the time down but the market is free in fact when you uh scheduled when we scheduled this meeting it overlapped with a habit that i had but that habit was marked as free and replying uh the habit was reviewing prs uh i spent a lot of time here uh reviewing pull requests and you know making sure that the team's staying on track and uh and so that gets moved to later in the afternoon and actually it got marked as busy i was just looking at my calendar because the claim was like hey you're running out of time to get this thing done so i just think we're a little bit more product makes sense to me just i want to get as much as we can here in the 15 minutes so the product makes total sense to me um take me a little bit into if people want to use this thing what's the average customer paying you per month to use the tech currently right now we're a free product um so we're yeah we're pre-monetization um we're being used as i mentioned across a little over 6 000 companies today meaning we have you know anywhere from you know several to dozens to hundreds of users inside of these companies and we're spreading pretty quickly so how do you think about like and first off do you have any need to put a pricing paywall or how long can you go without charging let me know how you burn your head count etc yeah we're we're in a good position in terms of um in terms of monetization you know we're basically i'd say a couple years away from the sort of the edge of the cliff and we're at a really good point in terms of product market fit and sort of the demand for the product um and so we've actually had a pricing page up on our site for two years um and we put pricing out there because we know that it's really hard for people to standardize on anything if they don't really know what to expect once the thing becomes you know uh a paid product so how does that work you have it up but you basically have a crosstalk it says free through 2021 and is this basically enabling you to drive urgency so people are like you're like sign up this year because we're going to charge soon not only that we have a referral program where you can refer people to reclaim and get future credit against paid reclaim and that's actually been a really successful program for us that's very interesting now you can only afford to do this though because you've raised capital right so talk to me about your funding story how much have you raised to date yeah we've raised uh 6.3 million um in total um we had a pretty unconventional path i'd say to fundraising we you know left new relic um we're sort of we we had been working on this concept for a little while what year was that by the way when did you launch 2019 we launched in 20 20 our first feature was january 2020 but we incorporated in june 2019 and we left the relic in april and so we were you know having a lot of discussions with investors kind of pre-product and we actually i wrote an article about it on on techcrunch if you're interested um but basically you know we kind of got to this place where the story alone um was not basically getting us to the terms that we really wanted to see into the investors that we really wanted to see and so we sort of took a step back and we said like look we're you know we're pretty incremental people by nature and we tend to sort of err on the side of shipping to learn and so we uh we ended up raising a very very small well relatively small chunk of money that was just basically enough for uh patrick and i my co-founder um to basically start building the product how much how much was that henry we raised about a half million on safes um and then we raised another million in safes um uh about six months after that that was so that was five million preceded yeah that that was essentially our pre-seed round yeah and the safe route was nice because it sort of you know kept uh it you know kept the process pretty light henry why'd you have to do that though i mean look i'm a big fan like obviously if you're gonna go to the vc route you've got to go hard on the bc route you can also stay bootstrapped and you'll go bootstrapped and have more freedom you know pay yourself in cash flow why did you you know most people are selling 20 of their business in the precede round like this imagine you guys probably did something similar right so why did you need this 1.5 million um well i mean first of all we needed to be able to you know hire our first uh patrick's a java engineer um i work a bit on the design and operations side of things but uh neither of us was a full stack developer and we knew that a big part of this was going to rely on you know the front-end user experience and so we brought on our first engineer with that money and our first couple full stack engineers with that money um you know other kinds of normal things it's nice to have health care um it's nice not to be you know super super stressed about you know the the the change in in pace um so you didn't leave new relic then with like a bunch of savings where you gave yourselves like a year of runway to experiment with a new product we did i mean we weren't paying ourselves uh very very good money i mean i would say we were we were definitely in the sort of ramen ramen salary category for a good long time um i did we did leave new relic i think with a healthy healthy enough nest egg to take the plunge but yeah you know obviously that you know that that also has its own stressors associated with it honestly i think our biggest calculation was like look we really want investors at the table here who believe in what we're doing and who believe in kind of the vision of what we're going toward and at the time we didn't have a product and we didn't have users and we didn't have proof that the thesis would work and so a big part of what we were trying to do was kind of bring a group of sort of people we had worked with in the past people that kind of believed in us as as you know uh product and growth people so how did geoff harris and heather redmond like at a flying fish did they did they know you've heard the relic how do you know they they approached us um after we had actually started building so we were that 500 000 basically took us to get our first feature out which was this calendar sync feature um which we launched on product on uh got quite a bit of traction on that and then we launched a feature called uh habits we launched for a very early version of habits which at the time was literally just like lunch and ketchup it was like a separate feature where you could block time for email and block time for lunch and um they approached us not long after that and asked if we'd be interested and um and we asked them if they'd be open to doing a smaller round at that time we were like look we're building really quickly uh raising's awesome but we're just not ready to take that step yet we're we're in a really good groove here and um would you be open to doing a smaller amount of money on a safe and then as we get to the seed round we'll you know we'll include you there as well um and they were open to that so 1.5 at i mean what fair to say like a six seven million valuation something like that you sold 20 uh i'm trying to remember i believe it was a capped note and i think the cap was 10 and i think we added we added a discount as well wow that's nice okay so you got little premium terms there because your history maybe at neural if you were close to the problem that's great now you raised a little bit more after 1.5 when was last round last round closed i believe we announced it in may of this year and that was for uh 4.8 and that was across index led the round uh char dualshot index ventures and then gradient who we had actually spoken with in our first funding go around came in and and and added some to it as well and then we actually went through this pretty long process that i think was made the round take a lot longer to close but we i think how long it probably took uh two three months i'd say in total to get everything fully fully fully closed um a big part of that was that we brought 40 or 50 other strategic angels including uh tope uh from calendly uh into the cap table and um you know it's it was one of those decisions i think our our sense was like this is really the time you get to bring those people into the cap table where it makes sense for them and so how do you structure that because this is an art right so you get a million or two million committed from like traditional funds what's the cold email that you send to tope what's the subject line how do you get 40 of these you know you have your hit list your wish list how do you get them committed you i almost think of it more as like pools you know we've got we had pools of people that were in our network that we knew of that we were like these are great people we want to work with and we think they might be interested in investing um there were people that the institutionals who we were working with introduced us to um and including chardoul and and at the time mz from gradient tope was an interesting story because tope actually we met because um patrick hung out in a uh slack channel where a number of folks basically uh mixed mix uh mixed um uh keeps on saying mix panel mix max excuse me uh calendly a number of other calendar services hang out in there we all talk about various bugs that we're running into with the google calendar api there was this issue that had been plaguing all of us for like two months where google would just totally crap the bed every every week or so almost like clockwork um patrick was part of the you know kind of group that identified the issue and he worked with calendly's vp of engineering to you know troubleshoot and triage it um we knew we wanted to talk to tope as part of our round and so we you know said hey you know if you if you'd be interested in introducing us to him we'd love to talk to him and um yeah we got along that makes that makes sense so 40 50 angels and that's great obviously power user base influencers one-to-many sort of approach um as we we're running out of time here so some quick stuff what what did you put in that seed slide deck right to show valuation growth from the 10 million because if you're only if you're not wanting to get super diluted you've got to raise 4.8 at like a 40 or 50 pre right when you're pre-revenue still right so like what story were you telling in that deck i think the big story that we were telling was you know a couple things so the first is you know this is a uh sort of a nascent market where there is a lot of sort of you know i would call it sort of a lot of overlapping opportunity and we're kind of right at the center of project management scheduling and and calendaring both of which are kind of these you know interesting and sort of growing markets i think the biggest thing though that convinced investors was ultimately uh user stickiness and user engagement um what was that 6 000 users how do you define stickiness stickiness for us is our people are people coming back on a regular basis to interact with the you know are they basically interacting with the system day-to-day are they using it to plan their week are they relying on it so what are your weekly active users today our we we measure them in monthly active users i could grab the weekly numbers for you but our our monthly active users today are about 16 000. um and and you said when you said customers you said sixty thousand not six thousand six zero thousand sixteen one six sorry how many when okay got it sixteen 000 you call them customers they're users 16 000 users at least once once a month yep and that's and that was up from 4 000 about a year ago yep so that 4x growth that's the main number you use in that deck to show your growth show you're you know getting closer product market fit that sort of thing exactly yeah and i think and i think also just the element of like the the problem we were going after was a little different than say just scheduling or just calendaring we were really oriented around this idea that the long-term vision for the business wasn't just to be a productivity tool it was actually to help organizations and teams be better aligned to their priorities and so i think i think that story resonated with um with investors but i think more than anything they were seeing that you know early signs of product market fit and early signs that people were depending on the product to actually plan their week yeah you've launched a bunch of things right habits by reclaim actually justin my friend at yak i'm a small investor yeah i love that tool i use it every day but you you've launched a bunch of these things i think to get out of just the hey we're we don't want to be the next x dot ai that raises a bunch and flops because we're not thinking about products so makes makes complete sense there and then look i mean fair to say that was at like a 35 40 million valuation somewhere in there um i uh probably uh a little bit less than that but okay fair enough so you guys did take a bit of a dilution there but it sounds like you got some really incredible people on board yeah actually i mean i'm pretty happy with where we ended up in terms of total amount raised and where we diluted i think when we talked to peers in our space we ended up diluting uh pretty close to where people where we expected to with a scene it's like 15 for seed round right i mean somewhere in there yeah yeah yeah and what's team size today how many folks eleven people myself uh myself included myself cool well this will be fun to watch as you turn on the paywall i love the urgency you've created with you know free through may sign up now and as long as they stay sticky man you set yourself up to have a paywall conversion rate that's really really high once you do introduce it so come back on a year give us an update but in the meantime man let's wrap up with the famous five number one favorite business book uh good strategy bad strategy number two is there a ceo you're following or studying [Music] honestly [Music] uh none comes to mind number three what's your what's your favorite online tool for building reclaim besides your own favorite online tool for building reclaim it's kind of a lame answer but intercom keeps us connected to our customers all right number four how many hours i sleep to get every night between five and six all right in situation married single kids uh s well single with a partner i should say a partner for tax purposes i'm single no any kiddos or no no kiddos no kids and how old are you uh i am 32. 32 last question something you wish you knew when you were 20. uh it was not a huge mistake to major in history guys there you have it reclaimed.ai a new approach to claiming your calendar they started uh caught two three years ago they've got they had 4 000 users about a year ago now up to 16 000 users a 4.8 seed round raised recently team of 11 as they think about what a calendar in 2022 should look like paywall not launched yet but they have had a pricing page up just to understand user sentiment around pricing using it right now as urgency to drive those new users who stay pretty darn sticky we'll see what happens in 2022 henry thanks for taking us to the top thanks so much appreciate it 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 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 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