Redtrack Revenue, Valuation & Funding (2024)

hello everyone my guest today is vlad joftengo he started with digital marketing way back in 2000 from website building to lead generation to sas ad tech he still has a passion for digital advertising with redtrack.io he's trying to address one of the core problems that he was facing often accurate real-time and actual measurement and analytics solution for performance focused digital marketing vlad you ready to take us to the top yeah i'm ready so let's go good so first off what's your business model do you do you get paid on a sas model or is it some other model yeah we run pure sauce and i think that's the way to go for most of the technology companies especially with customers who might see different volumes months or months they can change their plans freely to pay just for what they need okay so that's the best way and so give me a sense on average what are companies paying per month to use your technology yeah you'll be surprised the companies are paying average 100 bucks for months for using the right track and basically depends on the volume we build the product that is very uh high load friendly and scalable so i guess our biggest cost is support so you upsell on volume volume measured by what ad spend number of creatives no we don't want to jump into customers budget so we sell on volume and some extra features regarding automation yeah but sorry vlad volume measured by what yeah we measure data basically the clicks impressions conversions so we don't care what our customers budget so we have customers with six figures but in very low subscriptions because the clicks are expensive okay so you upsell based off volume volume of clicks impressions and conversions yep what what where did you launch the company in uh sorry can you repeat my last one what year did you launch the company in uh last year so we launched the company early 2018. okay and i would say the uh product not some viable concept she was ready by september and only uh almost a year after september we reached the point where we started to release all the features regarding automation which was the real purpose of the tracker so how much money did you spend building the mvp before you had your first dollar of revenue well we had our first deal of revenue the first month this will be a big surprise but we got our first hundred customers uh in ten months uh we built this uh with a four main team two developers me and one person in marketing so we didn't spend much okay but you have in order to get a sale selling software either your pre-selling idea or you built the tech really fast in under a month and got it live my question is again you either bootstrapped or you put in your own money what did you spend to build the mvp uh we uh built on top of the other technology solution they were catering the similar market uh performance advertising but they couldn't address the need of uh media buyers especially small ones that we work with so basically we took the technology repurposed to our needs and that was very fast so which allows us to close the first sale and then we keep repurposing the technology okay so you feel like you feel like you spent less than ten thousand dollars on the mvp yep okay very cool now to date have you bootstrapped the company or did you decide to raise uh we are raising uh second rounds right now and we're in the talks with several we see funds how much have you raised to date though uh we have raised half a million half a million and how much are you hoping to raise right now uh next half a million and afterwards we'll see how much we'll need to raise to get to scale so raising 500 now are you gonna do that on a note or a priced equity round do you think i think we'll do it on the price equity so what valuation are you hoping to get uh right now based on the all the talks we have our volition is uh 2.5 million okay do you think that's fair well uh i think it's fair and we talked with different people who did to put them down in volume up relations the numbers match so i think it's fair and how many customers are you serving today we sell more than thousand customers a thousand yep okay i mean so can i take a thousand customers times a hundred dollars a month you're doing about a hundred thousand dollars a month right now on revenue uh it would be very good we started as a freemium so i guess uh well the right which says uh users with customers being less than that customers being about 500 we still keeping customers who signed up when we had lower subscriptions and to get first people on board we uh give quite heavy discounts so right now so right now about how much are you doing per month [Music] uh well uh i don't want to disclose this number sorry uh because that will influence some of the negotiations we have well you said 500 vlad you said 500 customers and you said 100 rpoo and rpu stands for average revenue if you let me finish our poo stands for average revenue per user right so if you take rpoo times customer account that means you're doing fifty thousand dollars a month do you need to correct one of those numbers is arpu actually lower uh yeah i would pick lower because the errors really per customer would be around given the small number of subscriptions and discounts uh will be roughly at uh 60 dollars so yeah okay got it and where were you so that would put you at more like thirty thousand dollars a month right now where were you a year ago do you remember a year ago we were at just a thousand dollars a month yep so healthy growth a year ago we had our first uh 20 customers and a year ago we ran into the first three bucks so return rate was awful how bad what was the percentage well it was like 20 months till october 20 turn per month yes what's it now i know it's about 10 per month basically because of our lower tier subscriptions which we are letting go by september okay but ignore lower tier subscription instead of measuring logo churn measure revenue churn what's revenue churn over the past month uh roman percent okay so about six still sixty percent annually that's pretty high i do know uh because we right now in the niche there is affiliate performance marketing which is very uh very aggressive people come and go and to this is why we're actually raising the money and we're moving to working with digital advertising agencies they are more predictable more stable we have those guys within our customer base uh and i don't see any one of them actually go since uh october last year we just keep adding them up so it's a point of uh building out the product to the point with all those automations coming that we can work with uh agencies not affiliate marketers well i feel like markets are good customers but they come and go and how aggressive being to get a new 100 a month customer in terms of your fully weighted cac uh well uh i would say currently we spent let me do the mess i'm not ready for this question uh so we spend roughly uh 150 to get this customer okay so about a two-month payback period yep and where are you spending the 150 we're spending uh mostly uh so we have three channels to spend and we don't spend much we spent on uh some sponsorships and affiliate marketers so that sorry are influencers that would be 30 of the budget then under 30 would be on paid advertising and uh the last 30 would be on content generation and that would include people who actually work in payroll and generate the content so last month how much add up all those categories how much did you spend 6k okay so about 2k on each of them yep and are you burning i imagine you're burning capital today to drive growth correct yeah we burn capital uh and we're burning capital roughly at 30k per month okay so that's i mean do you feel good about that or does it keep you up at night well uh i feel good because the burn rate is increasing steadily so and we want to actually reach close to maybe 10 to 15k by the end of the year and the burn rate will be keep at this rate more because we plan to grow aggressively both in terms of team and marketing space what's your team today team today is 14 people one for 14 folks very good um and so where tell me how you got your first 10 customers what growth channel did you use um well i would say it would be uh reaching to people directly asking them to go travel product and then yeah but how did you target them how did you find them what titles did you go after how to get your their email and that's very tricky because there is no such thing as titles in affiliate marketing they are more media buyers there are specific communities where those people hang around name one or two of them sorry name a couple of mono communities okay uh let's take that money forum affiliate fix i'm affiliate uh a number of linkedin groups like media buyers and sellers cpa marketers all such groups okay interesting so you go in there that's how you get your first 10 customers very cool all right let's uh let's wrap up here with the famous five number one what's your favorite business book i would say my favorite business book would be good to greet is there a ceo you're following or studying um i would say i'm studying cup oh well i'm not exactly following but i like what different people do i would say uh i'm rather inspired of what joker willing does i also follow uh what my past ceo uh kell brown from world depth does i admire this man a lot and i have other people they're not very familiar about it i think they do great stuff number three what's your favorite online tool for building your company uh google docs number all we'll see what number four how many hours you sleep to get every night seven and situation married single kids i'm married to kids and how old are you 40 40. yep last question what do you wish your 20 year old self knew uh not to quit my first own business guys don't quit too early red track dot io during 30 000 a month right now helping again media buyers and sellers with digital advertising and their date managing their data they've raised 500 000 burning 30 grand a month right now to drive growth team of 14 people churns too high right now 60 gross revenue churn annually they obviously are trying to fix that spending 150 to get a new 100 a month customer so three month payback period there again healthy economics they look to scale hope and raise another 500 grand right now on a 2.5 million dollar pre-money evaluation vlad thank you for taking us to the top thank you have a good day bye