Salto Revenue & Funding (2024)

hey folks my guest today is benny schneider he's a high-tech serial entrepreneur and recently co-founded salto now serving as president and chairman of the board in the past he co-founded rob ello acquired by oracle in 2016. another company acquired by red hat and another one by cisco uh twice actually this guy knows what he's doing invest in services board as a board member in several startups some examples are autonomous traffic systems and v-hive benny ready to take us to the top yeah let's do it thank you very much for having me so tell us about salto i mean are you actually in the business building it or are you advising the co-founders yeah so i'm part of the company that's my day job and uh that's where i go to work every day i spending most of the time over there the company is run by ramy kamir my co-partner is the ceo of the company and gil gilo fair which is based he recently moved to sunnyvale in the us very cool okay and give us a sense of what salto does and who's paying for it what kind of sales teams okay so let's start from the problem that we are trying to solve in salto if you think about the modern world we have the companies the sas company that are developing their own product and then there is the business operation part of it till now the product itself was separate from the business operation if you think about the methodology being used by the developer they are like 5g fifth generation of uh you know technology when you look at the technology used to develop the other tools the business operation tools they are like 2g so what we are trying to do in salto is bring the methodologies and the tools that we use and we are still developing in the agile development world into the bezel world interesting okay tell me tell me just to make this real for my audience benny tell me a story of how a real customer is using if there's one you can talk about yeah so let's talk a admin of a salesforce that wants to do change management change management is something that's very trivial in the old world uh if you think about developers we are doing it all the time we have multiple environments we have multiple features we have multiple developers in the case of tools like netsuite like salesforce managing those is much more difficult so they have to decide they have to time what are the changes that they are going to do how they are going to apply it who is going to walk on it they are thinking more the old way of releases and moving from one sandbox to another sandbox what we are allowing them to do solve the biggest problem that exists today with those tools which is to extract the configuration put it in modern tools like github like a cicd and be able to make the changes and the change management with the new modern tools i love it i love this space very niche very focused but a very very big market sales force is huge you're catering to any sales source admin that wants to manage change management right all right we were talking between us about salesforce but i don't want to get you that you will get the feeling or the listeners that we're only doing salesforce the vision of the company was that number one it has to be the same thing for all the sas tools that enterprises are using today for business operation in reality people will always talk to you about two three maybe four one full crm one for finance one for marketing and maybe one for hr but when we go and talk to customer they have thousands of tools so we build a generic solution think about it like a platform that is adapters and can work with each one of those uh tools that we just mentioned understood and benny when folks are paying you for this technology to save themselves time energy and money what are they paying you on average per month to use the tech so they're starting from about as low as 10 000 and they can go up to uh probably hundreds of thousands of dollars we just started selling so we are at very early stages when did you get your first customer benny your first paying customer excuse me when did you guys get your first paying customer uh earlier this year probably in q1 okay and just to be clear you're saying the average price is ten thousand dollars a month or a year ten thousand dollars a a year sorry a year okay got it so maybe a thousand dollars a month and then twelve thousand dollars a year but you think this is going to be over time in enterprise motion you're going to stay at the 10 20 30 50 000 a year range right yeah i guess i mentioned to the pricing features number of users number of transactions uh we also launched launch today or these days we are launching a free tier that allows the user to use the full service with the all the features that with most of the features that we have and we have also a open source version that allows people who want to use it without the manage service that we are using uh themselves so think about it like three way in terms of go to market open source great tier and the regular selling model so benny you just launched you got your first paying customer this year i guess earlier this year how many customers are you working with now today we all can go with tens of customers and we have already uh about the 10 paying customers that's hey congratulations that's that's an exciting you've been through this a couple times so you know how important it is to get those first 10 right absolutely the question i have for you guys is you guys did a remarkable job at attracting capital before your first dollar of revenue i mean you have effectively raised almost 70 million dollars pre-revenue so take me back to that series a what was the story that you were saying back in 2020 and how much did you raise we raised them together like you said 70 about 70 million dollars in three rounds one was in the first sid round in 2019 how much was that one it was about three and a half million dollars okay and then uh we did the series a uh beginning of 2020 which was about all together with the seed about 24 million and the rest of it was earlier this year uh in 2021 of course i see and and again how are you guys able to raise so much cap i mean obviously you have a great background so i'm sure you have a lot of connections here right but i mean you guys are also taking a lot of dilution right pre-revenue i mean how do you manage all that well uh the walls this is probably a question for about two years ago the world especially here in israel i'm calling you from tel aviv from rana actually has changed so uh you can imagine that the raising the capital raising environment is different uh i believe that one of the reasons is that people trust us people like what we are doing they see the initial traction and the wheels most of the vcs that we use in the past so you know with some of the vcs it's like the third time some of them it's the second time so kind of easy and we are building our ecosystem this is excel salesforce vendors which makes sense bessemer lightspeed folks you've worked with prior correct yep now when you talk about traction that you point to you know if you have 10 customers today at around a thousand or two thousand dollars a month i mean you guys are doing ten twenty thousand dollars a month in mrr right now so is that accurate uh we don't talk about the numbers the number are actually higher but i would rather not talk about the numbers now there are no anyhow but we are looking at the major expansion in the coming years well i guess i won't push you hard on the numbers there but it's fair to say you're doing less than a million dollar run rate today right you just turned on pricing yeah so that's the reason i ask that so what metrics are you pointing to when you just go raise a 42 million dollar series b what what are you pointing to say look it's growing most people say revenue but you don't have that much so what what are you using metrics wise we are using mainly the market potential we are using comparables with other companies that are playing in our space we are using who are some of those companies uh some of the companies are a copado like crazy i mean ted elliott is growing that business i mean i had them on four months ago and they were six months ago they were doing 40 million in ar he just emailed me and said i could share it publicly that they passed a 52 million run rate and raised at the 1.1 billion valuation so they've got a lot of revenue already so how do you use that as comparable well they were a younger company and when they were younger they probably had another uh set of valuation which was probably i imagine lower than one billion dollars well yeah but but they they hadn't raised i mean the amount of money the capital profile of that business is way different than the capital profile currently that that you guys are on track for in other words what i mean by that is their first round was a 9 million round in 2018 and then when they raised in 2020 which they raised a 26 million round for they already passed a 5 million run rate at that point almost a 6 million run rate um so i guess all i'm asking is i understand comparables but like we're i'm just focused on you guys can you point to like free usage growth and free usage or anything like what were some of the metrics we just launched these days we are only launching these days the three tiers so it's earlier okay but uh again i mean uh when you're looking at the potential of what it is that we're doing here we're looking at the customer reaction the customer attraction that we are having the growth that we are already having in the accounts that expanded in the uh from earlier this year these are all significant benny what are some of the things you guys are expanding against is it number of api calls number of seats feature-based upselling take us there how does that work right so it's number of uh first of all number of interfaces so people will start for example with netsuite uh and let's say one developer or one admin and they will expand to uh salesforce they will add developers and then they will add features then they will add other uh tools to our offering like jira so the landline expand this building within our uh architecture and within our go-to-market and pricing strategy yep that all makes good sense that's helpful now when you guys raise the 42 billion of the 42 million dollars i was going to say 42 billion maybe one day right when you raise your when you raise your we want to talk about revenues at these numbers yes yeah when you guys raise at the 42 million i mean most people on their series b they're selling somewhere between sort of 10 and 15 percent of the business did you guys do a pretty standard round there or was there something unique i don't think there was anything unique but the uh we are still holding interesting part in the company uh the employees the founders so it's all good for everybody uh we're not looking at the cup table we're looking at success i always say that success is binary don't worry about how much is left make sure that you are successful first and then everything will be uh will fall into the right place i like that but benny if you guys raise a 42 million series b and even if it's at a you know maybe a lower valuation of 300 million right so you're selling 10 to 20 of the business that drastically decreases what some people would define a success for example you couldn't sell the sales force for a quarter billion or 250 million bucks because your last run valuation was higher than that right so how do you guys define success you've actually limited your optionality because you raised so much right so we have a different set of mind we worry about the success as i said and everything will uh will organize itself in in the future so rather than worrying about the exit we are making sure that we have all the resources in terms of uh in this case relationship i didn't mention it but salesforce is one of our investors and they are definitely helping us within the ecosystem so we are organizing in terms of capital to make sure that we have all the chances to be successful in this competitive market don't look at the competitive market just from the perspective of competition we're also competing on talent the israeli environment is extremely competitive when it comes to talent i believe it's also in other parts of the world i know it is because we are recruited also in the bay area in california and elsewhere in the states uh and i think the other part is the attention the attention of the customers making sure that they understand what it is that we are doing they understand what kind of painful problem we are solving to them and how we can make their life better and the biggest problem that you talk to business operation people is they want to be part of the company's success they want to develop the tools and the processes for the company that will help the business be successful right now the tools don't allow them to be as agile as the rest of the businesses we are empowering them to be basically a very ambitious concept we call it companies code so everything think about you probably heard about monolithic repository like monorepo everything is one code your code that you are using to develop your service whatever service you are providing and business operation everything is one thing one monolithic thing you can do the uh ci cd with this uh with this methodology consistently across all your tools this is very powerful business operation people are becoming very important to the success of the business and they are running at the pace of the business uh this is much bigger than trying to say we are allowing this and that tool to be to do change management we are allowing those people to be more agile and help the business generate revenue make the changes that they needed basically if you guys are successful who are you putting out of business um i don't know if we will put people out of business i would define our success in people that are doing business operation today will be far more productive and far more relevant to the business what are they currently using though where they're going to cancel and probably switch to you guys i mean are they canceling looker are they can't like what are they canceling i think they're counseling manual walk and they are canceling uh it's not that they are counseling but they are not as agile as they could be so let's say we today they are making changes twice a week maybe twice three times a month with us they can make changes two times a day even more they can make the changes in sync with whatever tools they are using to develop the product think about the modern sas you have all kind of hooks between the product itself and whatever the crm that you are using or the uh or the financial tool that you're using if you're breaking one field beer you'll break the entire thing and your entire operation will be done so i'm not thinking about this if what we are expanding i'm thinking about this i'll give you one example or one another sorry what i'm trying to do is connect where the vision of where you're trying to take the business to something that's common knowledge across my audience right so that's why i'm trying to make the connection here it sounds to me what you're saying is basically this is a much sexier and easier to use a more productive version of like what mulesoft might be or like today might be zapier where you're connecting multiple streams managing change across many streams the pipes of the internet focus though on the say on the sales structure first correct and we are focusing on the uh [Music] configuration if you think about zapier that you just mentioned they are connecting them all the data that move we are connecting the configuration of all those tools and we are synchronizing the uh configuration so if you think about this there are three parts here there is the uh configuration the integration and there is the business processes nobody has done the configuration itself so far yeah no makes sense to me hey we're running out of time benny but last couple questions here what's the team look like today how many people we are about 46 people in the company 46 and how many engineers about 30 and we love something's happening in israel you know i've had a lot of great founders on i mean it's you know corelogix is growing very fast you've got yatpo you've got guy at check who's in new york now but something's in the water over there would you credit most of this to just what the the defense program puts people through and how it makes them think like an entrepreneur that's not only part of it but there is a lot of other good things and recently the big change if you want finally the late stage funds have discovered israel so we see we we call them crossover fund but it's really late stage that are allowing israeli companies to run all the way and not sell themselves too early to american corporations like we did let's say five ten years ago i love that well i'm rooting for you benny i hope you guys have a ton of success in the meantime now let's wrap up with the famous five number one what's your favorite book okay so i like the michael lewis always the combination of history science in a good story makes a good reading book and mike lewis sure knows how to do it the one that i would recommend is flash boys the one that talks about the high frequency trading people know the big crash or the big short book but that's the one i like most number two is there a ceo you're following or studying uh probably in my case it will be bill gates bill gates number three what's your favorite online tool for building salt though uh the one that i'm using personally not necessarily just in salto it will be unleash.so take a look at it think about uh think about uh you know we used to do desktop search like spotlight in mac but most of the data right now is not there and if you want to look at the data you have to look elsewhere uh in all your sas this tool will allow you to look and unleash unleash so very good and uh how many hours of sleep to get every night i'm trying to get to about six okay what's your situation benny married single kids married with three daughters three kids great and how old are you 63. 63 years young last question benny what do you wish you knew when you were 20. i wish i would explore some more the area of life science now with the epidemic the fact that you can develop molecules cure real world problems in such a speed using this type of technology is amazing i wish i would know more about this and be able to participate some more guys salto dot io based in tel aviv is bringing devops to sales ops they've raised a war chest to do it over almost 70 million dollars raised 42 million series b earlier this year really to attract great talent as they look to scale 46 on the team today they've got under a million bucks in revenue but they just turned on uh they just turned on paying customers a couple months ago as they're now looking to scale and already seeing great expansion revenue in those early sign ups they're going to have an exciting 2022 benny thanks for taking us to the top thank you very much one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 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