Rydoo revenue, CEO Sebastien Marchon, team size, customer count, churn, and more in 2022.

hello everyone my guest today is sebastian marchand he's an mba he earned his mba in france started his career in 2000 in the consulting industry and then moved to the corporate travel industry in 2005. uh ben was hired by sadeko in 2015 to create a new business line targeting the mobility services he created and launched his current company rydu in june 2018 to play in the travel and expense management space sebastian are you ready to take us to the top yes i am all right so what is raidu and what's the business model how do you make money yeah sure so raidu is a b2b application that let's say dramatically simplifies the way companies and employees manage their travel and expenses we actually offer two different modules one is a travel booking module so you can have access to uh you know thousands well millions of rates fairs hotels airlines car rental companies train and on top of accessing all these negotiated fares and rates we don't you don't have to pay for it i mean there is a central payment so for the travelers you don't have to pay for it you can just leave your hotel and the payment will be done by your company at the end of the month to which we will send an invoice so we really try to to eliminate all the pain points pain point for the travelers so this travel booking module and then we've got an expense management module and this is the same philosophy trying to uh to reduce the pain points so typically for the expense you just have to take a picture of your receipts when you leave a restaurant for example and then there will be a optical character recognition module that will uh you know pull all the information which is necessary for you to be a reimbursed it's gonna be sent automatically to your approver and that's it's for the for the travelers and sebastian i mean do you have us talking about your revenue model do you have a sas model here or is it a paper transaction so you pay for a subscription per active user per month so a company will pay that not the actual end user absolutely the company will pay for it yes so give me a general sense on average what's a company pay for this kind of software for a year or a month so you pay for a month and you pay per active user if the user does not use the service for a month you don't pay for this month it's a very very flexible model fully fully sus that's great yeah so the question is i'm trying to get a sense i'm sure you have a lot of cohorts but on average what's a company pay per month for this uh yes uh you would pay between uh six six dollars and ten user ten dollars per active user okay but yes sorry so go up to the company level because what i'm really asking is on average what's the team size of the organization signing up so what's the what's the average company pay per month uh it's it's a tricky questions because we have clients that includes only one one employee and we also serve companies with uh 450 000 employees totally totally understand that scarce yeah i completely understand that because it's a short episode we don't have time to go on every single customer cohort so what i try and do is get hone in on a sweet spot so it's a sweet spot for you a team at 10 or a team of 100 or 100 000 what's the sweet spot uh well again we serve any types of of companies small and medium enterprises at large companies initially we were targeting more companies between let's say 100 and 1000 employees but the more we move forward the more big big clients are looking out outdoor and are actually very interested by our service okay let me ask this differently just so we can get to an answer so we can move on because i want to capture the rest of your story if you take the total logos that are paying you and the total team members on those logos and you divide that gives you a number or is it 100 seats typically per account or a thousand or what's what's the number let's say it's going to be around 50 kilo 50. okay per year okay sorry you said 50 team members per year 50 they would pay 50 000 uh dollars per dollars got it yeah got it and and how do you know how many team members that is it's about a thousand uh well yes i think it's going to be around the 1 000 on average correct okay so a thousand a thousand person team would pay about 50 grand per year or about five dollars per year per user no it's going to be it's going to be 50 000 divided by one thousand so fifty fifty dollars per year per uh user got it okay fair enough that's really helpful thanks for that take me back to your backstory here so so you launched the company where were i think you said you launched in 2018 where was your head at that point were you quitting a corporate job or why start the company so i was actually hired by sodexo to uh in 2015 to uh create a new business uh to uh because sodexo was interested to uh expand into the mobility industry and uh so we you know we the first year we took some time in order to meet some uh some potential clients to understand what was the market rationals what were the end user pain points and after this year we set our strategy which consisted in creating an end-to-end solution in the travel and expense industry covering the full value proposition before the trip during the trip and after the trip and then we built this value proposition and to to do it we actually acquired two companies one was named expenditure specialized in expense management and the other was i albatros specialized in in travel booking we merged these two companies we integrated them into one a single entity and we launched in june this year a new entity a new name a new brand which was raidu okay just to be okay let me get something clear though are you a hired gun of sodeko or are you a actual founder with your own idea your own capital the majority ownership's taking the company founding raidu yeah i'm an employee of sudeksu and i helped sodexo uh uh initiate a new business in the travel and expense area okay so let me ask you as an entrepreneur there's always a decision when you have a big corporate partner like us right because you're doing all the hard work you're basically a founder but you it sounds like don't have a ton of equity in the company of some maybe to keep you incentivized but nowhere near what a founder would have if they launched the idea themselves outside of the umbrella corporation why'd you decide to launch inside the company versus quit launch it outside the company and then you know do a partnership model yeah it's it's a good question actually we really saw the benefits of uh being backed up by a very very large company so nexo is a you know well he is the leader in in in the quality of life service worldwide it's a huge company so we we found it extremely interesting to be backed up by such big group and at the same time to have a kind of uh yeah startup mindset and actually sodexo was um working on this concept of uh working with startups and they have actually set up a concept which is named the corp up which is the combination of a startup mentality the startup philosophy with within a a large corporation so we found it extremely interesting to combine these two aspects uh the you know a big group the big group foundation uh partnering with a yeah scale-up or startup mindset that's great and then again you merge them all in 2018 but you've been working on it since 2015 how many customers have you scaled to to date we have 6500 clients and we serve them in the 63 different countries so again very small companies as well as large groups like anchor deloitte etc okay just to be clear those are all that's 6500 paying organizations correct right that average that average about a thousand team members per year that they're paying for yes yes okay and you said you said earlier for a thousand people kind of per team on average they're paying about fifty thousand dollars per year earlier correct yes that's great yeah okay so i mean does the math work out fifty thousand bucks a year is about four grand a month times sixty five hundred customers that puts you at 27 million dollars a month in revenue uh we worked sorry uh can you repeat that please yeah does the math check out so 50 000 a year would be about 4 000 a month in revenue time per per customer times 6 500 customers that puts you at 27 million bucks a month in revenue something seems off to me so yeah let me let me repeat uh a a company will pay between the six six dollars and ten dollars per active use per active user per month yeah i understand that you shared that but you said the average team has about a thousand and the average price is about 50 grand per year yeah 50 000 per year yeah okay but that map doesn't work out right if i take 50 grand per year times 6 500 customers paying customers which is what you just said you had that puts you at a run rate of 325 million dollars a year yeah i i need to make the math sorry for that but uh yeah i i i need to make the mass out of that maybe i didn't catch a quick you know way correctly a question you you had you have 6500 paying customers today correct we have 6500 clients that's correct okay those are paying customers go right and they pay on average fifty thousand dollars per year yeah is it lower it's so it's okay if it's lower and you may and we've got miscommunicated but i want to get the numbers correct because right now they're not are they are they paying much less than 50 000 per year on average yeah i don't have the average uh with me so again uh there is a client that would pay a five five thousand in total per year although we'll play much much much higher it really depends it's hard for me to to say what is the average today okay let me ask you a different question can you give me a general sense of scale you're at today in terms of ar and a range is fine in terms of what three in terms of ar annual recurring revenue typically fifty fifty thousand so fifty thousand it's but you know there is a different uh sebastian not not acv we because we talked about what i was asking is can you give me a general sense today of your total company's size in terms of annual revenue no i cannot i cannot share such a such number it's okay you understand that what you've already shared does not make any sense because you shared a 50 000 annual price point and 6 500 customers and you're not doing 325 million dollars per year it's simple multiplication so something's wrong yeah so what i suggest maybe that i would you know precisely uh investigate for this number and maybe i will get back to you okay but these are like these are not like i'm not asking like net revenue expansion so i'm always number that require i mean these are like very basic sas metrics i i understand but i prefer to give you uh you know accurate information so i prefer to uh to get back to you on that okay um yeah i mean the the the what i'm getting where i'm getting stuck here is i i'll base my questioning based off certain things like if your enterprise smb or mid market right you know the price point you gave me is not smb i'd say it's upper mid pushing enterprise but i don't know if that that 50 000 number's not actually accurate now which changes my line of questioning right depending on kind of what sector you're playing in so i really need your help i mean i find it hard to believe you don't know what the average customer pays you per year well the thing is that it's hard to uh disclose such information with uh with you uh i don't want you know uh sodexo is is listed on the stock market uh so you know it's uh it's what do they share publicly what have you guys already shared publicly you must have shared some of this publicly no we don't share such information publicly well you have i mean you have investor calls i assume these questions obviously revenue questions are pretty basic questions they get asked yes but i know but uh sodixor owns 100 of of the company today and so this is is listed on the stock market so i cannot describe i understand that but sebastian if you're on the stock market you have earnings calls and you have to report revenue so can i i mean do you want me to do the work right now and go look up the last earnings report and pull it out or can you share that with me if it's already public i cannot share such information with you today i'm sorry sebastian i'm asking you to repeat something that has already been do they share anything publicly they have to share something not regarding my activities not regarding the mobility business within the with introduction it does 20 billion uh euro of revenue okay so that's what i was asking right that's what they have publicly disclosed so there's 20 billion per year so question back to you just said that they own 100 of the company i'm so confused you have such a background in this space why do this under the company i mean if you own no equity you're basically coasting on a safe salary and maybe some benefits why would you not go out take a risk and start this yourself you you know so much about the space well yeah but sodexo was a very much interested to expand they find someone that was uh going to help them you know expand into this uh industry into this mobility industry uh so they had this uh this plan and my job actually as a member of sodexo was to help them you know expand into that into that business but you're now leading it you're taking all the risk of a typical founder but you have zero upside a minute of your time in does not equal unlimited potential upside because you have no equity i'm just curious i'm curious like in your head are you just risk averse right now do you have a bunch of kids you definitely you want to save salary you don't want to take that risk like i'm trying to just get in your psyche why do that most entrepreneurs would go out and start it themselves yeah you know i let's say i'm not a typical entrepreneur a typical entrepreneur indeed would take a lot of a lot of risk let's say i have a more balanced approach i'm very happy to uh to run a business as an entrepreneur without taking the full uh the full risk of that it's question of you know balancing risk versus entrepreneurship yeah i would say has this entity operated itself in terms of capital structure in other words have you raised capital from vc firms or things like that or is it all just supported by sudeiko pouring money in it's all supported by studex from there and what's the team size just on this product today 300 people just on today ago i mean sorry just on raidu yeah just on ryu yeah justin much bigger as you can guess and where's everybody based uh we have three main hubs uh one is uh in uh meghalane in belgium two are located in in poland and then on top of these three big hubs we have offices uh spreaded all over the world well we have uh eight additional offices from one to ten employees each in brazil in the us in in manila in philippi pretty much to talk to me about churn you know churn is critical in any sas company how do you make sure you keep your churn low and what is it today yeah we have a huge focus on the on the end user experience and we make sure that our solution is highly used by the uh by the end user so this is a you know the usage ratio is a metric that we follow very very carefully we actually invest a lot in the development we have a team of 100 developers based in in poland so we take us very very deep attention to the to the user experience to make sure that again our solutions is uh is well used by the uh by the user um and i guess well we are very very happy uh users and uh as a consequence happy clients and uh and as a consequence we have a huge uh yeah our clients are very loyal today well sebastian just to be clear any ceo i have on would say exactly what you said but the way you get down to brass tacks and actually measure that is by churn right so what is your churn today and how do what are tactical things you're doing to make sure you get new clients activated yeah so our churn is lower than three percent we lose less than three percent of clients uh uh every every year uh that's logo trying to revenue turn revenue okay god and and so second part of that question was what do you know you have to do to a new customer in the first you know week or two to get them active can you repeat that please when you sign up a new customer you know they have to do kind of one two and three things that they really get value from the product what are those things yeah so we really help the client implement our solutions as soon as possible so we have a team of you know client support support management that really help the client you know start using the tool sorry sebastian i mean every anyone would say that everyone wants the tool to start being used once they get a paid customer i'm asking specifically in your space the event space do they have to download your app and upload a certain data i mean specifically what do they have to do to get active yeah they just have to download the app that's pretty much it they don't know that i download the app what if i don't open the app what if i don't engage with the app uh yes then we will typically uh send the explanation how to use the app so the the company will choose their expense management solution and you know explain their team how to use the solution and then whenever you want to be reimbursed for example you will need to uh to use the app so this is like the official corporate tool that you do have to use in order to get reimbursed whenever chosen by the company they have to use our tool because otherwise they will not be reimbursed very good all right let's wrap up with the famous five number one what's your favorite business book uh i would say uh the mind of the strategist by kenichi or omae it's a notebook from the 80s but i think it's still very relevant today number two is there a ceo you're following are studying right now yes but i would not follow you know big uh and famous ceos i would actually fellow uh friends of mine that are founders and yeah is bastion name one of them sure vancouver nutella that founded the boosters spell it boosters b-o-s-t dot r-s [Music] development application number three what billing tool do you guys use what three what billing tool do you use uh we actually have our own uh invoicing tool it's not built on top of any underlying infrastructure no number four how many hours of sleep do you get every night uh from four to ten and it's an average of seven and what's your situation married single kids married two kids oh great how are you 43 43 last question what do you wish your 20 year old self knew uh that's you should sometime just start doing things without overthinking guys start without overthinking in 2015 he got involved with deco and then in 2018 spun out ryder company again focused on a very specific vertical that the overall company was focused on obviously the overall company is a publicly traded company ryder's focused on travel and expense management now starting out 6500 customers less than three percent annual revenue return as they look to scale with their team of 300 sebastian thanks for taking us to the top thank you anytime thank you bye-bye