How Reely Rebuilt From Near-Zero COVID Revenue to 128 Customers and Over $100K a Month (Interview with CEO Daniel Evans)

Introduction and Who Buys Reely

Nathan Latka

00:00Hey folks, my guest today is Daniel Evans. He's a dynamic entrepreneur and senior executive with a passion for emerging tech systems architecture and user experience. He's got an extensive background aligning technology advance of marketplaces, opportunities, and assembling teams to execute. Today, he's building reely dot ai, automated short form content creation. Daniel, are you ready to take us to the top? Sure. Let's go. Alright. So who who's buying this? Is it the sports team directly or content

00:25aggregators or somebody else?

Daniel Evans

00:27>> It's kind of a mixture. A lot of our customers are in the collegiate space, D2, D3, subdivision one, and then we have some pro teams that we work with. Then recently we've been moving more into the high school space with name, image, likeness kind of hitting the college scene. More brands and sponsors are kind of looking at the high school space. So we're moving down there a little bit too.

Pricing Model and Contract Structure

Nathan Latka

00:49So George Mason University is a good example of one of your customers. Help me understand on average, what are these companies paying you to use your technology per month?

Daniel Evans

00:58>> Well, it varies. It's generally a SaaS model based on games. Right? So the number of games that they want to run for the season. And then we we kind of base that around how many hours that that will run through our system.

Nathan Latka

01:09Mhmm. So so what would you say a sweet spot is for for those, you know, 50 games?

Daniel Evans

01:12>> Yeah. Well, no. Like, George Mason will buy about 300 games. Right? Because we'll cover baseball, football, basketball. We cover all of the major sports, so they'll they'll do that, and and they'll pay somewhere between, you know, $40 to $50 bucks a game.

Nathan Latka

01:25Okay. Interesting. That's that's for the annual contract?

Daniel Evans

01:29>> Correct.

Nathan Latka

01:30Got it. So you're looking like $12,000 annual contracts is your sweet spot sorta.

Daniel Evans

01:34>> Somewhere in there. Right? It it depends. Smaller schools may may buy 60 games versus 300. Right? So just varies from school.

Nathan Latka

01:40Is 300 your highest? Is that your biggest customer? 300 games?

Largest Customers and Game Volume

Daniel Evans

01:43>> No. We have we have some that'll run 2,200 games, and those are like private websites and people that are trying to post up, you know, more social engagement websites, whether it's a a sports site or if it's a new site that wants sports content.

Nathan Latka

01:57And so that 2,200 customer that's that's paying for all those games, is it still $40 a game, about $80,000 a year?

Daniel Evans

02:03>> No. It'll it'll come down in scale. It just depends on on the number of games.

Nathan Latka

02:08Yeah, fair. Okay, take me back here. When did you write the first line of code for this?

Company Origin and Founding Story

Daniel Evans

02:12>> So I was not one of the original founders of this. I actually came in because a friend of mine, you know, they were kind of struggling a bit after a couple of years of development, he asked me to kind of come in and stabilize things and set things up for the future. But the original intent was the founders were big fantasy players. There was three of them. And one of the founders really wanted to be able

02:33>> to get the Alvin Kamara touchdown in his in his feed, like, as soon as he got it so that he could essentially send it out to his friends and rub it in. And that was kind of how it was born. They started to kind of cut games themselves manually and then said, you know, this is crazy. So they went digging into the academic sphere and found somebody that had written a book on using machine vision and

02:55>> machine learning to do this and hired him, bought his work, the rest is history.

Nathan Latka

02:59What's the hard part there? As you know, I'm a Washington football fan. When I see a touchdown pass, I can, like, find an illegal stream of that online and cut it up in iMovie myself. Isn't the hard part actually getting access to the content, not cutting the sixty second clip?

Daniel Evans

03:14>> Well, it's you know, you can't scale that. Right? Like, you can have individuals like that, but, you know, our system will will pump it out in about three seconds, and then it'll it'll add any branding.

Nathan Latka

03:24But how do get rights to the content?

Daniel Evans

03:26>> Say again?

Nathan Latka

03:26How do you get the rights to the content?

Daniel Evans

03:28>> Generally, the our customers have those rights.

Nathan Latka

03:31Got it. So you as I say, people can't use your your Reely tool unless you are have that person as a customer. So like an NFL team, like my team, if you don't have them, I can't get clips of the Washington football team.

Daniel Evans

03:42>> Correct.

Competition and the WSC Comparison

Nathan Latka

03:43Yeah. Got it. Okay. Interesting. Who are you competing with? Because I see the football team put like, every NFL team does this. When touchdowns happen in real time, they put them out. Who do you compete with?

Daniel Evans

03:51>> So that's a company called WSC. It's an Israeli company. They work at kind of the high end of sports. They're driven mostly by data feeds and AI, right? So they're getting the like the Sportradar or Stats Inc. Feeds, and then they're pairing that up with some AI to cut that stuff.

Nathan Latka

04:08Do you have any idea on how big you think they are revenue wise or are

Daniel Evans

04:10>> they public?

Nathan Latka

04:12They I think they've raised their valuation, I

Daniel Evans

04:14>> think, is somewhere in the $200,000,000 range. So they're they're fairly sizable. I'm not sure what their revenues are.

Nathan Latka

04:19Yeah. Interesting. Okay. So what year did you join the company?

Daniel Evans Joins as CEO

Daniel Evans

04:23>> I joined in 2019 and took over as CEO in 2020.

Nathan Latka

04:27And when did the, you know, the co founders originally launch it?

Daniel Evans

04:30>> 2016, 2017.

Funding History and Pre-Seed Round

Nathan Latka

04:32Yeah. 2017. Okay. Give me a little bit of the funding history. It sounds like there were investors who were unhappy. That's why you came in. So what was the funding history before you joined?

Daniel Evans

04:39>> I wouldn't say that. I think there was just a little bit of difference in in vision, but we've raised 1.8 to date, and we're in the middle of of raising a round right now that'll that'll value the company around 12 to 13,000,000.

Nathan Latka

04:52When was the 1.8 raised?

Daniel Evans

04:54>> We closed that in 2020, early twenty twenty.

Nathan Latka

04:572020. Okay. So so no there was no money raised then before you joined?

Daniel Evans

05:01>> A little bit of friends and family.

Nathan Latka

05:03Okay. Got it. But you would consider the 1.8 that you raised your pre seed?

Daniel Evans

05:07>> Correct. Yep.

Nathan Latka

05:08I see. Okay. Got it. So friends and family before that 1.8 pre seed, what valuation did you raise that on?

Daniel Evans

05:12>> 4,000,000.

Nathan Latka

05:134. Was that fair at the time, you think?

Daniel Evans

05:15>> Yeah. I think so.

Nathan Latka

05:16Interesting. What why is that? I mean, I'm this isn't a right or wrong answer. I'm just curious.

Daniel Evans

05:20>> Yeah, yeah, yeah. It's solid tech, right? They spent two years on the tech. The AI is pretty robust and being able to do this in real time is very, very difficult because you've got to balance the machine vision, machine learning components with speed, right? Because you only have so many resources on a machine. So I think that is the hard part. And they spent a good two years dealing with different elevations of cameras and different view

05:43>> ports and different angles, right? So being able to accommodate all of that into machine vision algorithms is a lot of heavy lifting. And I think that is done now. And so now we're getting very nuanced into, you know, snaps and runs versus pass and things like that. So we're getting into some really interesting stuff now.

Nathan Latka

06:01And so you're raising today. How much are you targeting?

Daniel Evans

06:04>> We're raising 3,500,000 right now.

Nathan Latka

06:053,500,000 on a 12 pre? Mhmm. Think you'll get it?

Daniel Evans

06:09>> Yeah. Absolutely.

Nathan Latka

06:11Who are you looking for strategic to lead, are you gonna go traditional VC route?

Daniel Evans

06:15>> We have some strategics that are already in. So we'll, you know, mostly now we're just kind of filling it around with interested parties, angels and stuff like that.

Customer Count and Churn

Nathan Latka

06:24Yeah. Interesting. Okay. So you join again. You come in the business 2019, CEO 2020. Early customers, it sounds like were these guys wanting to get hired to their favorite teams. But how many customers do you now work with today?

Daniel Evans

06:37>> 128.

Nathan Latka

06:38128. Okay. Interesting. And how do you guys think about churn?

Daniel Evans

06:42>> We haven't really seen much at this point. I think we've lost two customers in the last two years that I've been with. So we don't see it because once it becomes part of their program, it's really hard to remove. It's a workflow tool, right? So they get used to their distribution being automated. Primarily, you know, like the SIDs on a college campus will be able to, you know, get their highlights out to their Twitter feeds and

07:03>> out to their social media. Whereas before they'd have to call the truck and try to get a cut and that's painful. And so other people, like you said, would get a, you know, a feed off the web somewhere or they would, you know, have somebody in stadium that would take a picture and that would go out to social and the schools wouldn't wind up owning the conversation around their games. And so that was a big deal.

07:24>> And also gives them a tremendous amount of ad space, right? New ad inventory that they can sell to their sponsors because, you know, all that content's going out to their social.

Nathan Latka

07:32Do you have ad spend flowing through your platform today?

Daniel Evans

07:35>> Correct. We do.

Nathan Latka

07:36How much, like annually?

Daniel Evans

07:38>> That's the that's up to the schools. I'm not gonna go into that, but each individual school is a little bit different.

Nathan Latka

07:44I mean, do you take a cut of the ad spend that goes through your platform? Nope. Oh, I see. You do not. Why not?

Daniel Evans

07:50>> Because we're just not there yet. Right? Like, once it becomes programmatic and we have enough wide enough footprint that we can offer that, then we would.

Nathan Latka

07:56Got it. It's not code. It's okay. Got it. If it's not programmatic, it's difficult. Okay. Got it. So 128 customers, if they all look like George Mason, three hundred hours per year, that's $12,000 contract values. I mean, I can multiply that into an ARPU. You guys are doing about a $128,000 a month right now in revenue?

Daniel Evans

08:10>> We're doing well.

Nathan Latka

08:13Is that math core is that math would that math not work for any reason?

Daniel Evans

08:16>> Well, yeah, the it varies by customer. Right? And not everybody's doing 300 games. Right? So it's it's in that ballpark. We're doing somewhere around there.

Nathan Latka

08:24Okay. Can we just maybe quantify and say north of a $100,000 a month?

Daniel Evans

08:28>> Sure.

Nathan Latka

08:29What do you think you'll break next year?

Daniel Evans

08:31>> I think we project to 3,100,000 for 2022.

Nathan Latka

08:35And what do have to do to get there?

Daniel Evans

08:37>> Say again?

Nathan Latka

08:38What do you have to do to get there? Is it expanding current customer contracts or brand new ones?

Esports Growth and Challenger Mode Deal

Daniel Evans

08:42>> No. So we most of our customers are renewing, so we continue to expand into that space. We've done a lot of work over the last twelve months on the esports side, so we're seeing a lot of growth on that side. We just signed a deal with a company called Challenger Mode, which is a major platform out of Europe that has 2,500,000 users and runs about 15,000 tournaments per month. So we'll be kind of getting all those

09:05>> contents and packaging it up like ESPN style highlight reels and stuff like that. So we'll see a lot of growth out of the esports space and the sports will continue to grow. You know, this year it's a little bit tough just because everybody's recovering from the loss of dollars from COVID, you know, so you don't see the same growth that you would. But I think next year, that'll bounce back.

Nathan Latka

09:23I want to go more to that in a second related to NFTs, but first, finish the revenue story for me. So if you're above 100 ks in MRR today, where were you about a year ago so we can calculate growth rate?

Daniel Evans

09:32>> Almost zero because our customers were shut down because of COVID. Right?

Nathan Latka

09:38Okay. But you couldn't have zero revenue you couldn't have zero revenue and then at the same time be doing a seed round at valuing it 4,000,000 when you just churned your whole customer base. So you didn't actually you didn't go all the way down to zero.

Daniel Evans

09:48>> Well, yeah, we because all sports cut down. Right? So they were stopped.

Nathan Latka

09:52You didn't know revenue. You didn't know revenue last year.

Daniel Evans

09:55>> Yeah. Well, fall of twenty twenty through, you know, because they weren't playing sports, so we weren't signing any deals.

COVID Impact on Revenue

Nathan Latka

10:01You didn't have any spring sports in 2020?

Daniel Evans

10:03>> Mm-mm.

Nathan Latka

10:03How

10:04did you raise $1,800,000 seed when you just, your whole customer base just churned, you went down to zero revenue?

Daniel Evans

10:11>> We have good investors that understood that this was a small thing, right? It was a blip. Because we were already running prior to the pandemic and the pandemic just shut it down.

Nathan Latka

10:20What were you pre pandemic in '20 I guess in '18, '19?

Daniel Evans

10:23>> '17, 18000, I think they were doing.

Nathan Latka

10:25Oh, interesting. Okay. Got it. Got it. Got it. Got it. Okay. So fair to say that most of growth has been over the past, like, six months, seven months?

Daniel Evans

10:33>> Correct.

Nathan Latka

10:34Basically, to a $100,000 in MRR fairly quickly. That's fast growth.

Daniel Evans

10:37>> Mhmm.

Nathan Latka

10:38You just just need to change your start date and just say start date is January 2021.

Daniel Evans

10:43>> That'd be nice, wouldn't it?

Nathan Latka

10:44Yeah. I can't do that, unfortunately. Okay. Cool. Got it. That makes sense. That's still compelling. I I I have never I mean, yeah, you do have great investors. Who led that 1.8?

Daniel Evans

10:53>> Stadia Ventures, which is a a big sports tech and esports fund and accelerator.

Nathan Latka

11:00Interesting. Why are you doing this? I mean, it looks like you have a a ton of history here. I mean, I would've if this thing goes to zero, would've said, see you. I'm gonna go work at a bigger firm where their equity is more valuable.

Daniel Evans

11:09>> You know, I love this. You know, I'm a big gamer. I've played sports all the way through college, you know, so I just love the space. And a friend of mine is one of the big investors and sits on the board and gave me a call and said, Hey, I need some help with this. Would you mind doing it? And, you know, just decided to do it.

Nathan Latka

11:28Right. How much do the original co founders still own the business?

Daniel Evans

11:32>> I think they're still like 40%.

Nathan Latka

11:34Okay. Okay. Fair. And I assume your friend gave you what, 20% to incentivize you?

Daniel Evans

11:39>> I've been incentivized properly.

Nathan Latka

11:41How do you incentivize a CEO coming in to run sort of a basically a turnaround operation, though?

Daniel Evans

11:46>> Yeah. It's I mean, I it's it's all tied up in in the company itself. Right? So I don't I don't take a salary. I'm I'm here to to exit the company and do a good job with it and sell it and, you know, hopefully everything works out.

Nathan Latka

11:58Mhmm. Interesting. Alright. But let's wrap up here with the famous five, Daniel. Actually, before we do that real quick, flesh out the team. How many total people?

Team Size and Engineers

Daniel Evans

12:05>> We have 11.

Nathan Latka

12:0611. How many engineers?

Daniel Evans

12:07>> Six.

NFTs and Future Opportunities

Nathan Latka

12:08And touch on NFTs for a second. That that to me is like where this gets extremely interesting. Right? Everyone's creating these NFTs. Now you don't actually own the content, but you could charge every team, like a gas fee effectively on auto generating these NFTs for these live reels. Are you looking at that?

Daniel Evans

12:23>> Yeah. We've looked at it, you know, when when all the stuff hit with Top Shots and all of that earlier this year and and Dapper raised the 350,000,000 or whatever they did, obviously, our phone lit up because we can do these things in real time, Being able to craft these things in real time. We've taken a hands off stance right now because I'm not really sure where this is gonna land long term. Some of it's kind

12:45>> of scammy, right? And of interesting to see the space. I want to see where it kind of lands and then we'll go. But we've dabbled with some of it on the esports side because that's the other thing being able to pull out those real time graphics and have them minted right then and there is interesting on the esports side.

Famous Five Rapid Fire

Nathan Latka

13:01Alright, Daniel. Let's wrap up with the famous five. Number one, favorite book?

Daniel Evans

13:05>> Thinking Fast and Slow by Daniel Kahneman.

Nathan Latka

13:08Number two, is there a CEO you're following or studying?

Daniel Evans

13:11>> Elon Musk.

Nathan Latka

13:12Number three, what's your favorite online tool for building reely?

Daniel Evans

13:15>> Oh, Envision.

Nathan Latka

13:16Number four. How many hours of sleep do get every night?

Daniel Evans

13:20>> Seven.

13:22>> Seven.

Nathan Latka

13:23And situation, married, single kids?

Daniel Evans

13:25>> Married, five kids.

Nathan Latka

13:27Holy cow. You're busy. How how old are you? 49. 49. Last question. Something you wish you knew when you were 20.

Daniel Evans

13:36>> To invest sooner.

Nathan Latka

13:39There you have it, reely.ai. He joined the business to help his friend. Friend who wanted to turn the thing around. They're doing $18,000 a month in revenue pre COVID, went to nothing during COVID, raised a $1,800,000 seed round at a 4,000,000 cap to sort of restart the business, hold it through COVID. Now things have kicked off nicely. Basically 0 to $110,000 in MRR in the past, call it 12. They're now raising a 3,500,000, call it seed

13:58series A ish at a 12,000,000 valuation. We'll see if Daniel can get it done again. Makes it easy for you to see and get and for teams to manage the clips real time as action happens. Daniel, thanks for taking us to the top.

Daniel Evans

14:09>> Thank you. It's great to be here.

Nathan Latka

14:12One 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

14:37Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM 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 little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

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