How retraced CEO Peter Merkert grew retraced to $3.2M revenue and 50 customers in 2024.

hey folks my guess it is peter markert he's a tech wizard with strong business knowledge on how to run a company successfully started to realize early on that the true challenge in our society will be bridging the tech and non-tech world especially with topics like blockchain more confusion is created than problem solved besides all that he's a fast starter adopt today's challenge running a company he's including a semi-remote setup agility development quick learn iteration loops to fail fast he's now building retraced dot ceo a sustainability management platform peter you ready to take us to the top i guess of course lovely introduction nathan happy to be here so yes indeed that's pretty yeah no i'm excited to have you on so tell us who's paying for retrace who's using you and how are they using you uh actually every fashion company you can imagine might be a kind of retrace because we are building a sustainability management uh platform for the fashion industry meaning brands manufacturers suppliers suppliers supplier down to the raw material producer actually it depends how they use the platform if they actually have to pay for it because obviously most of them are not willing to to pay uh you know especially if you're a small company because typically what you do you contribute information into the platform because this is what we are all about for the for the last ones in the tier like a retailer these are the ones who actually want to process and report information uh whereas you know in the lower tiers in the supply chain this is less necessary so you wanna just have something to easily uh collect information and process them on for the next party in line yep okay so fashion brands are your customers today what are they paying on average per month to use your technology it's not only fashion brands it could also uh the same be suppliers and manufacturers every fashion company actually you can imagine we are under understand so an average is approximately uh 800 euros okay so about a thousand dollars per month whether it's a supplier or a brand etc yes it definitely depends actually it's quite unique because it's very it's heavily depends on the size of clients since there are a lot of small ones who do not need a lot of functionality of the platform but the average you would say of all you're paying is about a thousand bucks a month yeah okay very cool and and imagine it's it's you know you're building a tool for the fashion brand is very different than if you're gonna build a tool for the supplier or somebody else so so who are you building this tool for specifically it's very tricky and challenging uh to build this tool actually because you can't just build it for one party you have to build it for oil to make a benefit out of it the problem in the fashion industry it's non-digitalized and very low connectivity here and we've earlier on my co-founders actually have founded their own shoe brand and uh footwear brand and this is where we all started they wanted to how many of you how many of how many of you guys are there we have three three co-founders in total it's me and you just split eq equity evenly at the beginning or no yeah oh nice okay so so how we started actually out is their their footwear brand they wanted to showcase the sustainability um because they really were into the manufacturer they knew everyone on the spot but they had no means to communicate it and this is when they came to me and said hey can we not build a system and i said yeah fine great so we started communicating you know small qr codes on on on fashion items soon realizing the demand is massive in this area of sustainability because you have to prove actually the sustainability you know a lot of people claim it with badges but it's just not enough um and this is how we started the traction was massive and then we started to say okay let's build it up for everyone so we built a platform for actually the brands the retailers mainly for communication purposes soon realizing that's not enough because you need the suppliers and manufacturers on board because they have the information they understand something got produced and so walk me through your first customer who who was it i mean besides uh the footwear brand of my fellows it's actually a piece of them because you know the industry was still very small when we got started four years and that was 2019. now just uh one and a half years before approximately that's when we started and the great thing is we started with peter peter so what what year did you launch 2018 i think okay it's 2018. okay yeah i think so 2018 mid 2018 isn't it okay so 20 years you kind of lost a year oh yeah yeah but 2018 you launched you're scratching your own itch you're right you build this for your own footwear brand then you bring in peer as your first customer how many customers are serving today uh i think we are about 50 brands already i'm not coming five zero or one five yeah five zero five zero okay very cool and uh uh 50 brands paying at that average price you told me earlier a thousand bucks a month that means you guys are doing about fifty thousand bucks a month in revenue right now is that about right yeah and if that's where you're at today where are you exactly a year ago do you remember basically nothing i would say we started very small especially in corporate times no one wanted to invest because back then we had covet and fashion brands often said hey we stay clients because we still want to utilize the platform what's the benefit for us we still get known but we stopped most of the subscription revenue actually and it was hard times interesting okay so maybe go from two thousand three thousand bucks a month a year ago to now fifty thousand dollars a month you've grown really nicely have you bootstrapped or raised capital uh we raised capital actually a year ago um that was then in the end of that year actually we were very happy i was very venture capitalist on my cutter so sorry when was the first capital raised what year i mean when you can't count the angels or do you want to understand because they know that you're for your first round i think you raised 278 000 in early on right yeah yeah yeah it was an earlier round with angels i think that was in the beginning of that year of corona and of the previous year yeah something around that because it got split kind of over multiple times yeah so it looked like based off based off my team's research you guys closed that in january of 2020 is about a 280 000 seed round um and i think that was at a 2.3 million dollar valuation something like that yeah it could be around something uh yeah okay and then you raised a little bit more this year how much did you choose to raise uh so in the end of last year it was 1 million to race actually you didn't just close around in november for 1.2 million and not this year it was last year 2020. uh interesting okay cool did you just did you just formally close that based off your government filings it they say it was closed literally last month okay interesting that you picked up on that so the thing is it was a performance condition because we set ourselves a strict target as farmers we said you know we want to set ourselves a performance condition that product market fit is there uh something very we were proud of our product but we were not sure if we were there and we didn't want to risk too much so we said in the end of last year hey we're going to close this this is the amount we agree on but we want to meet a performance condition that we have product market actually and we wanted to prove it for ourselves and just the money a little bit later when did the money actually get wired then it was split up into conscious you know you have first something set over so pretty much 50 50 okay and then based on the performance condition you got the rest of it but the filing happened later because i'm not really sure i think some people go on summer holidays so effectively we reached it earlier so we had a performance condition i think set to the end of april and we met it already in the beginning of march yeah so what was the performance condition was it number of customers or revenue target or what uh yeah it was uh mr actually what did you have to hit to get the second six hundred thousand well let's let me think about it again was it something above 20 or so i see interesting okay so you raised 1.2 million on this sort of performance-based seed round and what was that like a six or seven million valuation something like that yeah okay okay and so how do the three of you guys think about delusion how do you mean for ourselves yeah i mean obviously you don't want to get diluted right so as you're thinking you know you're raising all this capital how do you make sure to minimize dilution um it's tricky depends on the situation to be honest in the end of last year it was very tough it was covet we were we were happy having someone who was still open to finance because we were just in the need of it in the end of the day so how we are not getting diluted i mean to some extent you have to do it uh we are now looking into alternative possibilities of cash so for example revenue based financing yeah that's a good alternative yeah how many folks are on your team today we are 24. 24 how many of those guys are engineers and gals i think 14. 40 okay so happy engineering that's great now when these fashion brands and suppliers sign up they stick what's your churn look like um i...