Restworld Revenue, Valuation & Funding (2024)

[00:00] Guys, restworld.ai.it launched in 2020. They're doing €33,000 per month day in revenue up from 8,000 just a year ago. So nice growth rate. They've raised small seed rounds to be very capital efficient from their customers. Most recently, a $265,000 seed round at 3,200,000 valuation. Today, investors own 20% of the company, and the other four cofounders own the other 80 split evenly. They've got 12 on the team today, three engineers looking to scale their servicing restaurant owners [00:29] with between one and twenty employees who need to hire. That's what they go to restworld to do and to use it for. Hey, folks. My guest today is Luca Lotterio. He's a 29 year old CEO managing the evolution of restworld.it, which helps match workers and employers in Horeca. That's in that's in Italy. Alright. Luca, you ready to take us to the top? Are you ready to start? [00:53] >> Yeah. Absolutely. [00:54] Great. So how do you guys make money? Is it a SaaS company or is this a marketplace? So, basically, [01:01] >> we understood that we we are still not a SaaS model exactly, but we are still a RAS model. That means not software as a service, but recruiting as a service. This means that every time that a customer need our help, they used to pay a subscription like a monthly subscription, quarter subscription, annual subscription, but they've got not a service that is a software that they can use alone, but they got the help of our customer success [01:26] >> managers that manage their researches. We used to match our work is to match people and companies to work together. So we help restaurants, hotels, and bars to find stuff. So it's more like as I told you, it's a recruiter as a service. It's like if you have an outsourcing of the recruiter. But so what is in your What [01:46] is the is the average customer then pay you per month or per year to use your service? [01:51] >> Okay. So in per month, normally, it's a restaurant it's a little restaurant between one to 20 employees that they need just a research. So they start a research over one month, they find the right person, they hire the person, and they leave. So they quit. The turnover, the churn rate is really high in this part, but it is a momentum churn rate. This means that after two or three months, they come back because they need the [02:14] >> service again. Otherwise, it's completely different into chains, franchisees, How all this kind of [02:22] much do customers my question was how much do customers pay you per month or per year? [02:26] >> Okay. Between $204,100 euros per month per single slot. The zoobot is the number of available researches that they got simultaneously. So we got customers that pay €2,000 per month as well. [02:39] Mhmm. But the average pays €200 per month? [02:42] >> The the the average actually is 350. [02:45] >> 3 50. [02:46] And how many customers are you working with today? [02:50] >> Actually, 95. Today, it's 95 open. Five. [02:53] Can I take 95 customers times €350 per month? You're doing about €33,200 per month in revenue? [03:02] >> Absolutely. More or less is monthly recurring revenues. [03:05] Congratulations. Where were you exactly one year ago in terms of revenue so we can calculate growth rate? [03:11] >> So one year ago, we were making revenues €8,000. [03:15] Oh, well, congrats on the congrats on the growth. And when did you launch the company? What year? [03:20] >> We launched the company one week before the pandemic started of the COVID. So we spent our first six months without any market. It's So that's very clear. [03:32] 2020. [03:32] >> Yeah. Yes. And we actually started making revenues [03:38] >> during the half of 2021. [03:42] Have you done all this bootstrapped or have you raised capital? [03:45] >> We raised capital. We raised capital at the beginning from restaurant owners. [03:50] How much did [03:51] you raise [03:51] in what year? [03:52] >> At the beginning, in 2020, €42,000. In 2021, 100,000. In 2022, it's $20,250,000 euros, more or less. [04:07] That's great. Okay. And are you raising that money on convertible notes? Were they priced rounds? [04:14] >> It was always in equity. So directly directly into into the company. [04:19] So how much equity did you sell last year when you raised $250,000? So [04:24] >> the the last round was about 2,800,000. Now we are closing this week another round for €265,000 for 3,200,000. [04:37] 3,200,000. That's post money valuation. [04:40] >> Yes. No, that's pretty much valuation. Sorry. Post money valuation means 3.5. [04:45] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [05:09] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [05:33] get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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 [05:55] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [06:21] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second. But if [06:43] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation 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. Alright. Let's jump back into the [07:09] interview. So I love that you're raising money directly from your customer. That's obviously a great way to to build a company. Do you come from the restaurant industry? How did you have this idea? [07:19] >> I was studying psychology actually, and psychology of work. That means human resources. And in the meanwhile, I was working as a waiter in different restaurants to pay my studies. So I just mentioned that you think so. My thesis was about how can we improve the recruiting in hospitality and talking with the restaurants, they asked us if we were able to help them find staff. But we were just students, I mean, didn't have any expertise in recruiting [07:45] >> or hiring people. So we started, me and a friend of mine, as a game. So we started making as freelancers to help restaurants to find recruiters. And at some point we decided, we said, okay, maybe we should do some business on this. Not that we were completely unable to understand which was the rules of the business. Never had a startup, never had people in our family working in the entrepreneurship world. And we matched with two engineers, [08:14] >> an IT engineer and management engineer, and then we started the company. [08:18] That's amazing. So there's two of you, two co founders. [08:21] >> We are four actually. There are two engineers and two psychologists. [08:25] Did you guys split equity evenly at the start? [08:28] >> We start we start splitting the equity. Yes. [08:30] Interesting. And so today, how much of the company do investors own? [08:35] >> The the investors have the 20% of the company with the round that we're going to close the next week. [08:42] Okay. So they own 20%, which means you guys each also own 20% before cofounders today? Yes. Very cool. Talk to me about how you grow. How do you get to a million dollars a year in revenue? What's your growth strategy? [08:57] >> So actually, our growth strategy is every time we we catch, we collect leads of employers from basically from advertising. So meta meta advertising is busy. And we convert it really well. I mean, our cost per lead is something like three or four euros, and we used to convert one of five leads into customer that pay already. [09:23] So this means that is something like €25? [09:26] >> Yes. If you include the cost of the sales, so speak with the person, etcetera, it's something a bit more, but still under €100 And they used to pay €350 on average per month. So, I mean, in the first month we have already the money back. The second thing is that, obviously, when you have more customers, we need to scale the recruiters team. Cause as I told you, the customer success managers still manage all the, the, the [09:50] >> relationship with the customer. So every single customer cannot open their job positions or they, they cannot sponsor their job positions alone. They need someone in our team. So every time that we put one sale and we grow a bit the the acquisition, the the the the the budget in advertising, we grow the number of customer success managers. So it's like a cycle. [10:14] That makes a lot of sense. You mentioned churn is very high. Restaurants notoriously go out of business. What is your churn today? [10:21] >> So our churn today is, on average, 50% per month per year. [10:28] >> Yeah, but if we have a look to this, to twelve months, this is just 15%. Because as I told you, the little restaurants are opening a monthly subscription, then they charge because they fix the problem. But they come back in after two months or three months or four months because they need another person. [10:46] Yep. That makes sense. [10:48] >> So we can say that we have an exact churn rate. We got different kinds of churn rate. If you want to have a look to the monthly churn rate, yes, it is 30%. If you want to see the the annual churn rate is about 15%. [11:00] And what's your team today? How many people are full time? [11:03] >> We are 12 people. [11:06] Engineers? [11:08] >> There are three engineers. [11:09] And Including the two cofounders? [11:12] >> One of them, yes, because it's the IT. The other one is the management engineer, so it's the CFO of the group. So no. We've got the front end and the back end, and we are now adding the fourth fourth one of the engineers. [11:26] Very cool. Well, we're out of time. Let's wrap up here with the famous five. Number one, what's your favorite book? [11:32] >> My favorite book? [11:36] >> Talking about startups zero to one from zero to one. [11:38] Number two, is there a CEO you're following or studying? [11:43] >> A CEO that I'm following [11:47] >> hundreds. I mean, a lot of I don't know. I don't I don't have one, actually. [11:53] That's okay. Number three, what's your favorite online tool for building restworld? [11:58] >> Google Calendar. [12:00] Number four. How many hours of sleep do you get every night? [12:05] >> Eight. [12:06] And what's your situation? Married? Single? Kids? [12:10] >> I I live with with my girlfriend, but we are still not married, and I don't have kids still. [12:15] And how old are you, Luca? [12:17] >> I'm 29. [12:18] 29. Last question. [12:19] >> What's something you wish you knew when you were 20 years old? When [12:25] >> I was 20 years old, what I was wishing to do? [12:28] Something you wish you knew? [12:32] >> Something I wish I knew [12:36] >> when I was 20 years old. If it was when I was 15 years old, I was was studying economy at the school at the at the at the high school, and I never studied. So I had to study two times now. So this was the first one. When I was 20, I don't know. I was I was quite happy about my twenties. [12:58] There's nothing there's nothing you the question is, is there something you wish you knew when you were 20? You're saying there's nothing there's nothing you wish you knew when you were 20? [13:05] >> Okay. Yeah. Well, I think, yes. I got one. To know that I was able to create a startup because I was thinking to create a startup into the psychology sector and to have psychologists online. And today is a fucking cool trend. I don't know if I can say fucking, but anyway, it's it's a it's a good trend, and there are companies raising thousands of hundreds of bill. I had not a lot of money in in this [13:27] >> sector. And we had the idea, but we we didn't have the the execution. So [13:34] Guys, restworld.ai.it launched in 2020. They're doing €33,000 per month day in revenue up from 8,000 just a year ago. So nice growth rate. They've raised small seed rounds to be very capital efficient from their customers. Most recently, a $265,000 seed round at 3,200,000 valuation. Today, investors own 20% of the company, and the other four cofounders own the other 80 split evenly. They've got 12 on the team today, three engineers looking to scale their servicing restaurant owners [14:03] with between one and twenty employees who need to hire. That's what they go to restworld to do and to use it for. Luca, thank you so much for taking us to the top. [14:12] >> Thank you, Nathan. [14:13] One 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 [14:38] Central. 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 [15:01] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign [15:22] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. [15:42] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.