Sastrify Revenue, Valuation & Funding (2024)

hey folks my guest today is sven leckinger he's the seat co-founder at sashtrify the leading procurement service for sas subscriptions before the company he had already founded the parking startup evo park which was acquired in 2017. heals a degree from whu and worked for goldman sachs the bcg and baines then you're ready to take us to the top yeah of course thanks for having me so what you guys had too many subscriptions to manage at evo park and you said my next company i'm going to solve this problem is that how it works yeah it's pretty much exactly what got us started so my co-founder is the tech guy i'm the finance guy that's i guess exactly where we had the link and then uh once our past company got acquired even our acquirer which was a much larger company at the same issues so that's kind of like what got us started last year um tell me real quick let's just close up the evo park story did you bootstrap that business before you exited or no no no we actually raced we were the first ever uh startup that porsche the car manufacturer invested in um so there was a lot of like uh yeah more or less corporate we see three angel rounds and then we got acquired back in 2018 um with one of the leading like parking manufacturers um they basically handle everything that you can imagine that's in the car park so payment machines stuff like that and we were like the logical addition to that and so how much total did you raise that business we raised um like single digit million back in the day so it's like different like smaller agent rounds and just like yeah not more than like two or three million in total so okay quite a quite a easy easy cast there and how many years like when did you launch that business before you sold it uh we launched it in back in 2014 um so it took us about four years to lax it um and what did you end up selling the business for that i can't tell unfortunately but it's uh was it enough money for you to take some to put into sastra yeah we basically took like everybody took money off the table and i think it also made a lot of sense for the for the acquirer um but uh yeah it was i always like to say it was no facebook uh so that's obviously what we are we're rather up to now but you sold for more than three million dollars cash up front otherwise everyone you'd be stuck okay great so tell us about that uh you bring your co-founder you bring the your same team from there now into this new business did you guys split equity 50 50 in sastra fire you did something weird no we actually i don't know i'm not sure if it's weird so we were like four guys at evo park uh so all of the other two got five percent each transestrify um and we did the same thing with their new business um so we kind of like cross-invested each five percent at the beginning um so the original cap table was basically 45 45 and then five uh twice for the other guys okay got it so original at saturday is you 45 your co-founder 45 and then the other 210 yeah yeah okay very cool and then tell us okay so tell us about the business right so who are your customers who are you helping here so we basically start with any tech company that's above 100 people that's more or less what we look for so 100 to a couple thousand people um really anybody in that tech space obviously um as we're based in germany like most of our customers around europe right now singapore and some other asian countries and now we're basically building that um towards the rest of the world and what's the business model what are these companies paying you an average per month to use the tag so we uh suv is around like 25 25k more or less um so we have basic sas model that's tiered upon the the total spend of sas they have um and basically what we do is we help them really end to end on the process in terms of finding the right solutions comparing them getting the right prices for them actually having a structured buying process so how to bring software into the enterprise and then in the end like also managing the contracts over the long term right because i think for for sas the the real interesting part is you also like what do i have when you switch up for renewal to really like have a long-term perspective on that um so that's kind of like how we you can think of us as a virtual procurement department uh for sas and so is that flat fee to twenty thousand dollars per year no matter how much you save them on tools yeah it's actually um so what we found is i mean it's obviously quite the young companies about 12 months old uh so nothing is launched 20 20. yeah so we launched like i think we we kicked off the i think we actually launched february this year more or less but we we hired the team around like november last year so that's kind of like when we when we got started with the whole thing okay so so and tell me about the first customer you brought on um yeah the first customer is actually right in the sweet spot for our customers right now um so it's around like three four hundred people by now um yeah typically they name them sven are they comfortable being published no that's good it was ambos a company from berlin they do a very like famous uh training app for for uh um medicine students um like crazy among really cool company um and they like yeah basically we started with them figuring out on how they buy software and how to optimize that and you keep mentioning number of team members but do you price against number of team members or or you know total amount of you know total software spend in 2020. yeah we reprice against total software spend um but then again it's not like you can't pinpoint it down to the euro or the dollar right and that's why we always try to give her because if you if we ask prospects what's your total software spent um then the typical answer is i have no idea um and if i ask and okay how many people are you then it's much easier to categorize what is don't name this customer obviously but today what's your highest acv customer like what's your highest plan uh ron 60k 60k okay and so for them you're doing everything full suite like how much do they spend on software annually millions like millions okay yeah but then they are like yeah again uh i think what we found is that it's too cheap that we are too cheap still which is a good thing because typically like within like the first couple of couple of weeks actually um we we uh we saved them like three four times of that okay so almost was your first company you've got large enterprise accounts and sixty 6000 acvs already how many total customers are you serving today around 70 bit more than seven seven zero yeah seven zero so it's been quite a year for us yeah i was gonna say this is probably significant i mean can i take 70 times 2 000 bucks a month on average i mean that's 140 grand a month in revenue pretty much that yeah oh wow and what were you exactly a year ago do you have nothing yeah that's pretty much it so we had like one or two test customers um but we really kicked it off like from january february this year okay so i mean you don't have to tell you this you're from the space i mean that's super impressive growth did you do this bootstrap or did you raise no we raised um a precede in uh november last year when we hired a team and then we raised the seed round uh three months ago um of about seven million dollars to now basically yeah just grow all over europe um that's kind of like the next step tell me real quick about sort of why you chose to do this way so the pre-seat around last year how much was that for 1.3 million dollars and was that sort of on pretty standard terms like safe 5 million cap password deal yeah yeah so we i think we're like we did a price round that a bit more than should should be like six million dollars well you priced it right on the start yeah we prices right on the start well why there's like some yeah there's some like german applications to that in terms of yeah subsidies and whatever you get so there's like it wasn't too big of a difference and as we know like most of the investors we onboarded were actually investors from from evo park um as well because we just loved to work with them um so it was also like yeah super easy structures and everything already they said sven you're young we backed your first business you must let us write a check in your next business yeah everybody was uh quite keen on backing that as well okay so six million evaluation last year and then the seven million you just raised what valuation was that at uh yeah about 27 free something like that what was that process like i mean would you change anything did it feel like a fair evaluation um i think it was a decent one so we didn't push it too much we were rather looking for the right partner and one thing that we also did which was not smart was we raised in july um which which i cannot recommend to every anyone because apparently people love to do holidays in august um so that was kind of like uh the yeah the only drawback but in the end we ended up with a partner that we want um with hv uh from from berlin in munich and uh yeah they're great like really great supportive for us so you sold i guess in the pre-seed uh what in the precede you sold do i'm doing the math 20 probably basically you sold 20 20 yeah now it should be a bit less than i don't think that was like 17 each okay okay but now if you look at your cap table investors own something like 35 40 percent yeah something like that okay got it when do you guys start thinking you know one of the questions i get from early stage founders especially when they're going to raise processes usually that seed round you know those investors are going to ask you to set up an esop pool right like some sort of you know equity sharing plan for employees was that required like did you see that requirement for you and if so how large did you make that so we we made one with 15 of the original cap table um at the beginning which is again which we also found and which were changing now uh is that for some reason it's very typical in germany that you set it up that the original visa goes only towards the founder proceeds which is obviously not too great for the founders side so basically gives you some additional dilution there for us it was like super important to have the initial team uh incentivized obviously um so we were fine with that but we're also changing it now um that we're going through the rounds so we basically everybody covers it more or less okay interesting and was the seven million of that all go on to the balance sheet or did you take any secondary there no that was all going on the balance sheet uh did you ask for a secondary we had no not at that round um but uh yeah for us it's not like there's no not gonna be a secondary for the next couple of couple of rounds i guess um let's see about that but for us it's right now it's really we believe very strongly in it so i guess and we don't need the money for now so i think it's uh it's more focused on the business sven how many folks are on the team today i think it totally about 53 right now plus minus okay and how many engineers about eight smallers yeah i was gonna say this isn't really an engineering heavy problem it's more like bdrs or like you need business development people to like negotiate prices and stuff yeah i mean we're really trying to get rid of that uh manual part right so the end product should be a platform that can do everything automatically um so we're now heavily investing in that product and an engineering piece but obviously like the really nice part about the business is that you can you can basically theoretically do it with an excel sheet it doesn't scale but it's really like if you're smart enough and you just look at enough contracts and processes you can really like do it as a one-man show yeah and that's what kind of like got us started because transforming that into a platform and really automating it will then basically give you like a huge leverage on on the whole process i guess the end process for us is really like building that one platform where you can handle it like your whole stack on vendor raised uh 60 million on a 600 million valuation earlier in march does that feel like a high valuation to you [Music] well it's from what i know it's about 100x on the on the ar um so i guess uh that's quite quite what we see everywhere at the moment so i'm not i'm not that surprised and frankly they're going doing a really great job there yeah so you have them in march at somewhere around six million bucks in revenue [Music] yeah that's at least what what i would assume yeah yeah um interesting okay talk to me you said you feel like your pricing's too cheap right so so you know pricing changes early on founders always do it later than they should right so like why haven't you changed pricing yet yeah we're actually gonna do that pretty soon um it's mostly like yeah obviously you're so stuck into into operational processes i mean why are we too cheap just because like i think our average roi is now like six times um and customers would probably already be happy with like four times let's put it that way um and now that we have more trust and more logos and like huge companies that we work with um i think it's totally fair that our value is somehow proven are you combining your leverage in other words okay let's make this up your professional plan right there's a dedicated buyer there is that buyer calling up sales forcing going listen we have 10 satisfied customers that pay you a million dollars per year you need to give us a 10 discount and then you give you know distribute that discount across those 10 customers you represent that need a salesforce license yeah we actually don't do that on the bulk level um because we see that there's actually more in the more of what we do it comes from the efficiency of just doing it more often than once so typically if you buy salesforce in a company you do it once maybe you switch companies you do it twice but our team does like every day so we obviously also know the salesforce people and they just send over what's already expected to be a good contract right so there's actually it happens automatically but there's no setup where we just like bundle contracts and then distribute to all the customers so like you work with black lane why can't black lane just bring salesforce directly and ask for their best option like why is salesforce going to give you a better offer than they would the customers directly so the i think the the big one here is that for our customers it's not only about the price it's also about the process um so basically the whole like reaching out to them getting demos negotiating three rounds as opposed to just telling us hey centrify we need salesforce and then we come back with like uh already basically done offer at a good price um at a decent rate i see i see talk to me more about your sales team how many quota carrying reps do you have so we just did a split of sdrs and aes um and in total we're about 10 now 11 um up from three eight weeks ago what's the split of the 11 between aes and sdrs so right now it's six sdrs and five a's um and then because yeah we're a bit lagging behind on the sdr side so how what are the sdrs responsible for how do you incent them uh basically it's getting demos in that's the so reaching out to people scheduling first demos how many demos should they close every every month so that you don't fire them so we well we just hired them so um for us it's really now figuring out of what they can deliver right so we're ramping it up um i think two two per week or something right now um but that's like the uh yeah it's still like in the very early stages there okay and then those aes what do you expect them to be closing per month you know once they're fully wrapped so once they're fully ramped um it's also something like one to two customers a month um which gives you like a total of about 500 kar for yeah yep yeah so so each each year if those aes are on target their quota is to close 500k a new arr yeah plus minus obviously it's differentiations in terms of seniority and what they can do and what they can um yeah that's like i mean we've not been around for a full year so it's a lot of like finding out of what works and what doesn't span it's impressive stuff man let's wrap up here with the famous five number one favorite book um i have to say for work week it was really transforming number two is there a ceo you're following or studying [Music] there's the only guy i'm really following on that is actually arnold schwarzenegger but that's that's a different that's a different story number uh three what's your favorite online tool for building sashtrafy um i guess i have to say donut i love donut calls with my my team number four how many hours of sleep to get every night try to make it seven okay very cool and situation married single kids uh girlfriend and living together not married no kids how old are you 31 31 last question something you wish you knew when you were 20 um i guess that you don't have to go to business school to become an entrepreneur guys there you have it sashtrify launch just call it like 11 months ago they went from nothing to 140 000 a month in revenue in that time serving 70 customers helping them buy sas tools more effectively they handle the whole demo process get the quote process negotiate the contract they raised 1.3 million on a 6 million valuation last year to get going and then 7 million on a 34 post just recently this year as a scale 53 on the team at spend scales there in europe it's been thanks for taking us to the top likewise it was good to be here 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 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