How Salto CEO Benny Schnaider grew Salto to $15M revenue and 10 customers in 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...