Rosterfy Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Shannan Gove. He is the co founder of rosterfy. They exist to connect communities to events and causes they're passionate about solving complex contingent workforce management problems for the largest organizations in the world, from the Super Bowl to the City of London to the British Heart Foundation and many more. Shannan, you ready to take us to the top? [00:17] >> Let's do it. [00:18] All right, last week's chat was August last year. I think you shared you were going be doing about $2,100,000 in ARR. I imagine COVID impacted you somehow. What happened? [00:27] >> Yeah, question. So we ended up around the 2.1, you're right. We're probably closer to 1 ish ARR. And so we ended up for this year, for 2021, we'll probably end up around 3.2 with 2 mil ARR. So we've managed to weather the storm as best we can and grow quite significantly. So it has been a challenge, but we've managed to get through well. [00:54] You're a SaaS plus model. 2,000,000 of your 3,200,000 this year will be SaaS. What's the other $1,200,000 [00:59] >> Yeah, we work on some significant enterprise contracts that require a lot of support from our team and also some technical support as well. So dedicated project leads on projects like the Commonwealth Games or some work with FIFA and UEFA as well. [01:17] Yes. Describe for people who missed our first episode together, describe to people like what you do. [01:22] >> Sure. Large organizations require mass workforce management. They come from spreadsheets or out there with systems. Our platform provides the end to end solution from recruitment, screening, engaging, rewarding, scheduling, time and attendance, award rates. So we provide that end to end journey in one central system where previously they might have had four or five systems. That's what our platform does. And given the significance of some of these programs like the FIFA World Cup or the Commonwealth Games [01:54] >> or the City of London Volunteer Program, a lot of these programs may require one or even two full time staff supporting them to execute that journey. [02:04] Launched in 2015, I think you told me last year you passed 100 customers. How many today? [02:10] >> Probably closer to 130 or so. And I'd suggest that's because of COVID because we've probably just gone to the larger end of town compared to gaining mass smaller customers. And what? [02:23] So MRR just on the SaaS side today is something like 150,000, something like that? [02:28] >> Ish, yeah. Yeah, roughly. [02:30] Is churn high? [02:32] >> No, churn is really good. We have on average at the moment because we're doing this, we're raising investment at the moment as of next week we're starting. And so we'll be at about 97% retention month on month. [02:49] Got it. So 3% churn per month or 36 per year. Do you have expansion revenue that makes up that whole? [02:57] >> Yeah, roughly, yes. [02:59] Okay. Alright. Sorry. What's your net revenue retention? [03:04] >> I don't know the number off the top of my head then for that for that question. Yep. [03:08] Talk to me about the raise because you were bootstrapped today. Right? [03:11] >> Well, we raised 2 mil end of twenty nineteen Aussie, and we've been boost bootstrapped until that point in time. [03:20] 2 what is that in US dollars? [03:22] >> 2,000,000 Aussie? $1.6 ish. [03:25] Interesting. [03:26] And what valuation did you raise that at? [03:29] >> 7.5 Aussie. So call it 6. [03:34] Was that the right valuation you think for them? [03:37] >> Who knows? I think we probably had a large portion of our revenue being as a fair split between SaaS revenue and once off revenue. So probably at that time potentially, but we've certainly increased our recurring revenue now. So I think we'll be in a better place for this this raise. [03:54] How much are you looking to raise now? [03:57] >> We're looking to raise $5,000,000 potentially by the end of this year, but we'll see how we go. [04:02] And why $5,000,000 I [04:06] >> guess we can talk about it but we've come from the volunteer mass workforce space and we're really finding an opportunity for us in a larger contingent workforce space. So probably a higher level of workforce into an organization, effectively anyone that's not full time in an organization. So because of that, it's a much larger market size we'll be moving into. So we want to increase our sales and marketing capacity and probably just general resource around the team [04:35] >> to support that. [04:36] And what valuation do you think you'll raise up? [04:39] >> It's a million dollar question but we're seeing some pretty crazy valuations at the moment. We'll really let the market decide that anything off a 10 to 15 times multiple for recurring revenue would be a good mark. And then we do have around a million of support sort of non recurring typically but whether you want to classify support for these contracts as recurring, we'll find out. So 10 to 15 times SaaS recurring would be about the valuation. [05:10] So you think you'll see it'll be above a $30,000,000 valuation? [05:14] >> Yeah, I think that's the number that a few people have mentioned to us that we'll go through the journey and find out. [05:20] Talk to me about the art. I mean, this is game theory. How do you get soft conversations? So give me your term sheet or shut up. [05:27] >> It's a great question. And we learned a lot through our last investment raise, where we had a lot of fantastic conversations, people really love the concept. And for us, we are passionate about is connecting communities all around the world. We've got a great story to tell. And so people are really attracted to that story. Then the contracts come out and they display a different thing with the conversation. So we learned a lot through that process. And [05:52] >> I think for us, it's just about cutting to the chase. Importantly, that we want to work with the right people that will support us and help us grow. We're not naive to think we know it all. So it's not just money we're chasing here. I think we can get that money from somewhere. We just want to make sure it's from the right people. [06:09] And Shannan, what's the cap table like today? How much equity do you still own? [06:16] >> Did we give up last time? I think it was 22%. That's still what we have there. And so three co founders are majority shareholders of business And I'm one of those. And then we have the investors in that small pool. [06:33] Scott, so you plus the other two co founders own 78% and investors own 22%? [06:38] >> Yeah. And we have an ESOP pool for our staff. So that is 10%, but that just hasn't all been utilized yet in this small portion. [06:47] We'll struggle with when to set that up. Right? When you start incentivizing employees with an ESOP pool. When did you did you set that up at your pre seed round, the 1,600,000? [06:55] >> Yeah, we did. Around then and a touch after. But yeah, it's an interesting thing to have. Staff is so important to us and we want them to be as part of the journey as what we are. And so we decided to set it up then. And I guess the advice or the thought was, it's probably easier to do it then compared to later down the line where people may have to sell shares to create it. And [07:22] >> it just might get a little messy. And I think future investors want to see that to be able to bring good people in. So you're just prepping yourself for the future. Weren't in this for two years. We're in this for the long run. So thought we might as well set it up early. [07:37] And what's the team size today? How many people? [07:40] >> We're around 23 now. So significantly bolstered our team in the last six to nine months. Certainly probably not what we were expecting at the start of this year with COVID and how it's lingered on in particular this year and especially where we are in Asia Pacific. But 23 now. [08:01] Very cool. And how many engineers? [08:04] >> We have six to seven engineers in that team. [08:08] Seven, interesting. So where are the other 15? Are they sales reps or what? [08:13] >> Yeah, we have six in the sales team at the moment. And then like I mentioned on those significant projects, we have dedicated project staff so that's probably around four. And then we have a global account management team as well that supports clients through Zendesk. That might be another four and then finance and leadership. [08:33] Interesting. And how are you landing more customers? Where are you spending money today on CAC? [08:38] >> I think our summer in this investment round is we've got where we are today from hustle and grind and good relationships and networks. So we really have in the last six months bolstered our marketing efforts to increase our visibility out there. I guess for our larger clients, it's often a direct sales lead and effort into that and building relationships. But then for the mid market opportunities, it's through marketing. So we'll probably spend top line 250,000 in [09:10] >> marketing this year but that could be a lot more to increase visibility coming into next year. So we're doing the groundwork is what I'd say this year but we're going to grow off that next year. [09:22] Sorry, say that again. [09:24] Where's the 250,000 going this year? Where are you spending it? [09:28] >> Into [09:31] >> lot into SEO agency and so just finding the right avenues there. A lot into LinkedIn, Google and then advertising sponsorship of some campaigns. [09:44] >> And then some other resources in the marketing team as well. Content providers, the sort of direct marketing, that's what we're putting it into. [09:53] Good stuff, Shannan, let's wrap up here with the famous five. Number one, favorite book. [09:58] >> I'll have to stick with my similar answers last time. Shoe Dog by Phil Knight. Love that book. [10:03] Number two, is there a CEO you're following or studying? [10:09] >> I think Gary Vee, like last time, just take or leave a lot of his stuff, but hard work and accountability to what your role is. That's what I appreciate. [10:20] Number three, what's your favorite online tool for building the business? [10:25] >> HubSpot. We just moved to them about four months ago from Salesforce and it's been such a breeze. [10:31] Number four, how many hours of sleep are you getting every night? [10:35] >> Seven to eight, depending on how the baby sleeps. [10:38] One so okay. So married and one kid? [10:41] >> Married and one kid and a dog called Sunny. [10:44] And how old are you, Shannan? [10:46] >> I'm 32. [10:47] >> 32. Last question. [10:48] Something you wish you knew when you were 20? [10:53] >> Something you wish I knew. I think just enjoy it. We're in a privileged position to be able to work in this type of environment and build a team. I think that's it. And with that, don't ride the highs and lows because they're pretty equal. They balance each other out somehow in a weird way. So just try and stay as neutral as you can and get through it. [11:15] Guys, manage your volunteer workforce for your in person events using rosterfy. They're growing nicely. 2,100,000 in revenue last year, this year 3,200,000. 2,000,000 of that is pure ARR. The other 1,200,000 is consulting contracts. They've kept it as co founders managed to keep up 68% of the business. They've built this business raising just 1,600,000 on a pre seed round at a 6,000,000 valuation back in 2019, now raising 4,500,000 and hopefully north of a $30,000,000 valuation. We will [11:39] see what happens as they look to continue to scale with our team of 23. Shannan, thanks for taking us to the top. Thanks, mate. [11:48] 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 one [12:12] pm 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 [12:35] big fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna 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 [12:57] 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. [13:16] 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.