How Redislabs CEO Ofer Bengal grew Redislabs to $209.8M revenue and 8.5K customers in 2024.

hello everyone my guest today is offer Mangal he's the co-founder and CEO of a company called Redis labs before that he's a serial entrepreneur who has founded and led several companies in the areas of data communications telecommunications internet homeland security and medical devices he was the founder and CEO of our IT technologies which is now on the Nasdaq at RIT T AB rioter of highly sophisticated telecommunications and data communication systems to major world carriers he began his career as an aerospace engineer in the Israeli Air Force and in builds own aerospace engineering consulting firm as a hobby he's also invented developed and license toy concepts companies such as Milton Bradley Hasbro and Tommy off are you ready to take us to the top I said I said are you ready to take us to the top sure very and we should end this right now you don't sound very excited so again I said we should end this right now you sort out and don't sound very excited no I'm kidding okay tell us about the company what is Redis Labs do and and what's the revenue model how do you make money so we are data based company and you know the data base wealth has changed a lot in recent years after being sort of very conservative and stagnant for it for about 40 years you know since the beginning in the mid 70s with companies like Oracle IBM Microsoft etc in the last 10 years or so the market is open from new type of databases which are called no SQL databases and you have companies in this space such as MongoDB which which went public about eight months ago data stocks ready slabs and some others this company started about seven years ago around something else as many startups do we the basic idea was to accelerate the performance of applications and we did that by building a caching system when we did that we found an open source cute open source by the name of Redis which was started by an Italian guy out of Sicily the guy was the name of Salvatori Sanfilippo and he started it sort of you know half hobby halves for something that he built for Telecom Italia and he put it as open-source and we found it and we thought hey you know this is great as the engine under the hood for what we were doing at that time and after your year we saw that it's picking up in the market and it is this is 2012 offer this is basically 20 around 2012 yeah we started in 2011 a year after we saw that Redis is becoming so popular as an open source that we better do something about it and we decided to become a Redis company so the original name of the company was something else then we became really slabs and from there on and later on this you know servitor rejoined the company as lead open-source and and today we do basically development of the open-source and what we call ready enterprise which is our commercial offering which is kind of what you upsell right and this is what we sell and basically we sell it in two major deployment options the first one is what is called database as a service so this is some sort of automated service whereby we rent thousands of cloud servers in multiple public cloud such as Amazon Google Microsoft Azure etc we put our technology on our servers and then our customers with some of them are very very big fortune ten even fortune ten customers put their data on our servers and we manage those databases for them in the fully automated manner yes please offer just be clear there you have humans on the backend as well along with code kind of managing those it's a professional service not really no we do not do professional services we are against this model we think it's not good so this is a fully automated system we have you know we manage over it hundreds of thousands of data bases across nominal how many clients well we have today approximately 8,500 enterprise clients and approximately a hundred thousand three customers on our three tiers and all that is managed by five DevOps so you know that's all and what's the total team what's what's it worth what's the total team size today so we have approximately 200 people in the company a little bit over than that this is going to grow to 270 are towards the end of the year it's basically half and half half in Israel which is R&D and then all the rest the headquarters are sales marketing and everything else is in Mountain View California it sounds like a good split there and and give me a sense to so these people that pay you right it sounds like you're approaching this from that enterprise space you talked about ten fortune fortune 100 or fortune 500 companies using you guys what is it but you have 85 of our customers so there's a long tail here happening what's your core focus kind of the long tail or the enterprise enterprise absolutely and just to give you you know some some names of customers so you know we have customers from all verticals so in banking we have American Express Charles Schwab Wells Fargo in financial services we have MasterCard Visa Intuit Fiserv ecommerce we have Walmart eBay Starbucks and social we have Twitter tweet Shutterfly in media we have a mess and DreamWorks the market fool in advertising we have harvest Rev mob in technology we have Apple Cisco Dell communication Comcast AT&T Verizon Vodafone and so on and so forth I can give you many many names like this sorry let me let me ask you go ahead yeah as you say let me let me ask my question right so I get it you you work with enterprise customers I that's clear but if I forced you to not you could on every customer cohort but if I force you just give me like an average what would you say the average customer pays you per month or per year for this database as a service so you know database as a service is our longtail where we have you know I would say around $1,000 per month I'm sorry per year and then when you go to the software side of the business which is larger we are talking about if you take the overall average it's around 60 K per year yeah if you are talking about Fortune 100 customers it's around 300 K per year yeah that's the average obviously we have customers paying millions of dollars per year yep no that makes good sense now if I take fight you know $60,000 per year price point you know monthly that comes out to about 5 grand a year and you just said you have a 500 enterprise clients if I multiply 8,500 times five grand a month that would put you at 42 million a month is that accurate so I'm just using your numbers you just said you had 8500 customers and you said the average contract value is 60 grand a year which comes out to five grand a month so five grand times 8,500 customers would put you at about 42 million bucks per month I mean you know let me let me put it straight so we have you know we have eighty five hundred customers out of them approximately 250 our software customers and these are the big enterprise customers the service customers are much smaller okay God so the service customers are the ones that you say were closer to the the a thousand bucks a month versus five thousand exactly oh I see what you're saying okay got it good so so enterprise you have 8,500 to summarize that you have 8,500 total paid customers of which 250 or enterprises with an average ACV of call it sixty the rest call it a two hundred are more around a thousand bucks a month something like that yeah I see okay good so look if I add up the same thing I can add up kind of those two revenue streams to put you at a Revenue kind of monthly recurring right around the the nine point four million dollar mark is that more accurate it's it's more accurate we are not there yet I mean we are getting there we are not when we are not there yet when we pass it you think what your goal I'm sorry when do you think when do you think you'll pass nine million a month what's your goal [Music] that will be approximately a year from now now great that's good so what's the growth rate are you looking at today year over year well the money is growing approximately sixty percent year over year and you know we we are building the company to become a major software major data based company and we think that you know in order to do to do you know a nice sizable IPO we need approximately two and a half years yep okay that's great I want to talk more about kind of the story in terms of how you're signing up these customers you just listed very impressive customer list there before I do that your goal again next year is to hit nine million a month in revenue give me a general sense of where you're at today well you know we are not sharing numbers because we are a private company but you know I think that if you take what I said about being approximately two years away from IPO you can get a you know a very general sense of where we are well if you said you said just a second ago you're generally growing about sixty percent year-over-year so if your goal your from now is to be at nine million I could kind of say okay well if his goal is sixty percent growth to get to nine million and he's probably somewhere around call it six ish right now six million per month is that accurate math you know to get the number in indirect way and you know I won't like to share it but you know take it as I said you know we are approximately two years from an IPO readiness with a nice idea so what does that mean nope some people could say you could IPO at a 50 million run rate...