How Rheaply CEO Garry Cooper grew Rheaply to $6.6M revenue and 14 customers in 2024.

hello everyone my guest today is gary cooper he uh launched his company in 2016 called ripley an asset man exchange manager it's the easiest way for professionals for professionals to share resources with anyone in their industry by connecting leading research institutions fortune 500 companies start-up school systems non-profits and organizations in between reple has created a is creating a shared economy for innovation gary are you ready to take us to the top yes sir all right so tell us what the company does and what your business model is how do you make money yeah so basically we developed we were changing a category starting a category called asset exchange manager which is basically a manager between an asset management system and an online marketplace and the way that we make money is we sell this asset exchange manager axm to primarily right now to organizations that do research they pay us a subscription monthly for its use and then we also make money when an asset is sold from one organization to another on our system what's an example gary of an asset like that that would be sold yeah so it could be something like a microscope it could be some heavy equipment like things you might find like a drill or a mill all the way to kind of specialized biologics and chemicals interesting so like a school a school might use you and when they want to buy new microscopes for their fifth grade science class instead of just turning them over to the government they'll put them all through your system and maybe make some money on them exactly and and or a company would say instead of selling our stuff to a corporate auctioneer we can sell it to a local university local charter schools so they can make better use of it interesting okay what do they pay you on average per month to use the technology so corporations tend to pay about ten thousand dollars a month and again it's you they're they're it's primary use cases to kind of increase internal asset visibility utilization so one of the things that we talked with our clients a lot about is using reple as the first step of procurement you can imagine if you're at google um or if you're an intel or a big company it's very likely you might purchase something that someone else already has in surplus but you have no idea that they have them in surplus and they have no idea that you need them and so it tends to happen is that people are double buying and overbuying all the time um so our our real chief case to those big types of clients is to kind of help with internal rede realization of things that have already been procured but then secondarily they can say hey we no longer need this stuff so we want to be able to sell it to universities startups small businesses charter schools and they can do that up through our platform got it okay so average customer pays about 10 grand a month for access to this yep okay and then and then when did you launch the company what year so we we we found the company in june of 2015 um worked nights and weekends on it for about a year and a half the hustle baby the hustle grind i was a full-time consultant and my tech team was a full-time tech team at another company and then um we launched full-time november 1 to 2016. that's great and how many customers have you scaled to today so we started selling we did a year-long pilot in 2017 so we weren't selling we started selling january of this year and we've been able to get 14 clients today that's great i mean are they all paying that 10 grand a month not all so some of them are universities so we charge universities at 12 1200 a month okay um so uh depending on where you are as a university or corporation um that's that's what they pay but yeah so all of all all but two of our clients are paying okay uh which is which is pretty good for first year sas company no that's great i mean if i if i assume that they're all universities paying just 1200 bucks a month times the 14. i mean that puts you away like 16 17 grand a month in revenue right yeah yeah exactly is that about where you're at right now are you higher it is it's a little it's about that actually about 5. and going back a year nothing right nothing like we'd even have a we'd even have a product that we could sell a year ago we were just testing it because there's a lot of even once you get the technology right from kind of a uh user experience perspective there's a lot of under the sheets regulatory things that we have to make sure that our users don't fall into for instance like posting psychotrophic drugs or you know trying to ship chemicals you know things like that we didn't want our users to accidentally do this all the same things you might do on an ebay but with lab stuff because that can kind of get very dangerous very quickly so we had to kind of figure all that out and it's kind of cool to see this kind of thing blossom and gary how did you get the first you know 10 customers were these people you pulled over who you already were kind of consulting for no so that's a good question so the the first handful of customers that we got so one of them so i am a junk faculty member at northwestern so we were able to do a pilot there 2017. the pilot was then we got a spotlight in a journal called nature which is the world leading peer review journal and so from a credibility perspective you can't get more credible than nature and so doing that we got a lot of inbound customers that were super interested in what we're doing from that publication but then we've really been just growing from our client base so our initial clients referred us to peers because obviously the system works right as a network effect right so if i'm at northwestern and it's to my benefit that i have someone like you chicago on the platform as well because we can trade and get and share things to together so we've actually grown i think we like northwestern refers to emory when we close emory they referred us to uab and you know we've we submitted a contract at uab after one conversation so we've tried to kind of fight the traditional hard to sell market with sometimes universities are thought of by really doing our job with our initial clients and having them refer us to the people that they were what's the team look like today so we have four we have five uh side five team members so three are co-founders um two are the tech tech guys so they were working at guaranty rate here in chicago before replay everyone's in chicago everyone's in chicago chicago's home um and uh and then the fourth person is a really good friend of mine college roommates the director of marketing um and then we have pete who's an associate just graduated from uc boulder that's great okay so five people all chicago and have you bootstrapped the company are raised so we've raised we've done both and so we've ran to date about 540 000 in convertible notes okay and we are right now in the middle of a pretty substantial seed round raise um so we're hopefully trying to close that by beginning of 2019. how much are you hoping to raise about 1.5 million okay and can i ask kind of what valuation you're targeting i'm sure this will change as you negotiate but generally what are you aiming for generally given where we are in our market we're thinking somewhere around six million pre-money would make sense yeah yeah so what you'll sell what is that like seven to twelve percent of the company something like that yeah about about twelve yep exactly that that's great um and do you have a lead investor yet or you're still hunting that's uh if i check my email now the answer might be different so that's what we're hoping to get this week actually let me ask you a question you did convertible debt already i mean would you ever consider just so that you don't have to take dilution would you ever consider venture debt to keep feeling the growth yeah so we we have a good friend um here who's kind of briefly all on venture debt so we are considering doing it right after actually this fundraise so the way that i understand some of those instruments they kind of come right after you do a fundraise well not all of them i imagine the guy you're probably talking to um he probably or she probably only does it after vc race but there's a lot of venture debt firms actually that will put money in um as long as you're north of 15 grand a month in revenue they'll put money in even pre-vc very interesting no i didn't actually know that and actually you're right the guy who we've been speaking to is a traditional banker uh and uh but no that's that's very interesting we can check that we'll chat more about that later but um where will you spend the money oh so really two buckets the first bucket is hiring more salespeople quite frankly i'm the chief seller the chief operator chief fundraiser and then the second bucket is we acquire a lot of our customers at professional conferences and events so we want to have a heavy presence at the conferences that our customers go to yeah that's great any churn so far no one's canceled no we have a very sticky business um if you can imagine putting assets and having a system up and going that way you're getting value it's very hard to just go back to your spreadsheet um or to your sticky notes and we've had customers i won't even say their names because we love our customers but we've had customers tracking multiple millions of dollars with surplus assets through the way you would make a grocery list um so it's kind of interesting um some of them being...