How SAWO CEO Prabhat Sahu grew to $1.6M revenue and 41 customers in 2021.

hey folks my guest today is prabhat sahu he's crunching data and chasing target since 2016. his vocation in the last half of the decade has been driven by statistics structures and stories from finding an e-commerce company in 2016 to working for the government with a special focus on the agriculture department assisting farmers to move beyond the middle man lobby he then founded sawwo that's saw labs.com in 2020 to be the one-stop solution for all your authentication needs pravat are you ready to take us to the top sure yeah sure yeah i'm excited you're here so tell us who's paying for the software and and and how do you structure it how do they use you sure uh so uh i realized around 2020 uh august 28th is when i realized that we should go ahead and solve the aspects of having passwords or uh one-time codes to log on to uh applications and you know the idea was to smoothen the overall journey we ended up building a plug-in sdk which could plug on to any mobile or web application and eventually let users come on board so uh yeah essentially right now we have 41 odd uh enterprise customers who pay for the application uh and it's been up it's been around for a while now can you can you name some of those customers just so we get an idea of who's paying you so uh the customers are very geographical here so we have uh in around the top three uh cryptocurrencies out of the top five uh in india our cryptocurrency exchanges out of top five in india are a part of the cybers community apart from that we have approximately uh 36 uh really large e-commerce uh clients who basically operate out of india uh geographically and we are doing a lot of business with with the you know one of india's largest banks as well okay got it so they're all using you to authenticate users when they sign up whether it's for a cryptocurrency exchange a bank or an e-commerce platform yes so what do they pay you per month on average an average so uh essentially we do 56 million authentications a month and we charge 0.006 dollars per authentication right say that say that a little bit slower 56 million authentications a month is what we do and 0.06 dollars is uh average we charge per authentication so uh the ticket size lies anywhere from up ten thousand dollars to twelve thousand dollars a month or a year a year a year okay got it so you've got essentially 41 customers paying you about a thousand to 2 000 per month so you're doing about 40 to 50 000 a month right now in revenue uh we do approximately uh upwards of 130 000 oh okay i did that i did that math wrong so so what are you selling something else besides authentications or is that all authentication we don't essentially but the point is uh the 41 are just enterprise right we have we have really small uh ticket size customers as well who pay anywhere from eighteen dollars to a hundred dollars so i see and if you're doing 130 that is a total of 9000 customers in total which includes premium as well how many are paying at least a dollar upwards of upwards of 300 around 320 on 320. 320 interesting okay very cool and if you're at 130 000 a month today in revenue where were you exactly a year ago a year ago we were not uh operational uh in business itself we started this february uh to be operational monetization started around may when did you write your first line of code uh july last year okay so 2020 is when you started coding the tool and help me understand how you've grown this did you guys just choose to raise capital or bootstrap oh we have raised a very substantial amount of capital upwards of around a million dollars in total okay and i think you did that in a pre-seed round and then a seed round is that right yeah yeah what was the speed round size the pre-seed round was around thirty four thousand dollars uh plus uh an extension of uh sixty thousand more uh and then there was a uh eight sixty thousand dollar uh sierra okay and and most people in their seat round they're selling between ten and twenty percent of the business what valuation did you raise that at uh around 30 percent you sold about 30 what three zero percent one oh one one three one three okay that's great and did you feel that that valuation was fair did you raise from uh what where were the investors from that you raised from uh uh they're they're a vc fund uh there are really a large venture capital fundraiser in india uh they are it's it's run by uh the ex-co-founders of infosys okay good group so you raised 860 000 bucks at a about a six million dollar valuation selling 13 and are you raising capital today are you going to still using that capital you just raised up we are uh almost about to close on all a nine million dollar round oh that's going to be overseas and why do you need the nine million where do you plan to invest that yeah uh essentially though the whole product was built on product led growth and community growth so the idea is to spend at least 40 of it on uh accelerating the product's vision and uh increasing the speed at which the product operates and the product uh uh the product is growing and uh uh around around thirty percent of it goes into expansion of the community and the rest into human resources and other expenses what does that mean when you say expansion of the community i mean how do you grow a bigger community to then turn into more freelancers so uh right now we have an open and close community in total of 12 000 developers uh the the idea is to uh where is it where can people go visit the community uh uh discord and slack uh what's the what's the name of the sac group uh the name of the sag group is called uh the brooklyn can you spell that the product led gem oh the products led jam yes interesting and why why are people in that slack group good fits for authentication i mean are there banks and e-commerce brands hanging out and cryptocurrency just hanging out in that group so essentially the top of the funnel the idea was to bring bring a lot of developers and product managers in a group together provide them a lot of value make sure they engage and then eventually profile them and ensure that the product seeps into uh their daily habits and itself so that's something that we did we did not uh bring e-commerce brands or banks to the platform to start with we just brought everybody we saw who's taking the product and that's how the brand grew into itself that makes a lot of sense now when you raise the 94 000 seed round what cap was that at or what valuation uh uh i diluted approximately seven percent seven yep that's fairly low you did a good job managing dilution in your early rounds have you had experience raising capital before oh yeah this is my second time creating capital oh tell me about your first company what would you work on there i i we were running uh e-commerce sas brand uh the idea was to build uh scalable sas to uh increase the hyper local e-commerce market in itself so i raised the box i raised approximately 120 000 uh around six years back and what happened to that business uh that eventually fizzled off the market wasn't uh we were too early yeah okay so you sure you sort of shut it down yeah we should eventually uh you know uh talented overall business sold the product to one of the clients itself recovered the principle and shut it that's a great way to cover principle return it to investors and then sort of move on to your next thing now we blink 12 months later you're building a great business you're looking to raise a nine million dollar round what valuation are you targeting uh we've uh i can't announce it yeah as of now but yeah we have already closed on a 65 million valuation uh i'm done done with the basic paperwork so you're you're based i mean the round you're doing now series a 9 million 65 million valuations something like that yep yep and and talk to me a little bit how you've built the team how many folks are full-time today sure there was a time when we started when i started off coding we were me and two more interns and then right now we are 53 people in total uh 49 being full-time how many are engineers 34 34 okay what's everyone else do uh we have a community team then i have a content and a growth team how have you there's a lot of listeners building sas companies trying to structure their own communities how did you structure your community team see uh the idea is to essentially understand that people who advocate in communities who build communities are not popular people they are more operational and functional the mistake that as brands make is they tend to hire an influencer thinking that that will that will drive uh uh community growth but that's not how it works uh what i did was i got a really operational strategic person who had uh insights into uh how to handle developers in itself uh we we ended up growing we started off with 80 developers uh around 12 months back and right now we're at 12 000. that's amazing and and so you're getting customers there are you spending any money on cac nope not at all i've spent uh approximately ten thousand dollars into ten thousand rupees in total to uh to build the whole thing so that would be approximately what uh 150 dollars pretty cheap you're pretty pretty efficient there all right when you raise this 9 million i mean are you going to try and do paid ads against anything or a paid acquisition are you going to keep focusing on communities we will definitely expand into inorganic methods of growth uh of course there is there is a cost to organic growth and that's uh slow speed right so the idea is to the idea is to spend more on inorganic growth and ensure that we catapult the business in itself and talk obviously you can catapult the business but you can't lose customers right so churn expansion are critical what's your net dollar retention today um we in our business in the kind of business that i've built here in authentication itself uh it's a very security business so churn isn't a problem anymore uh the the issue is slow growth uh churn isn't an issue so uh i barely had what a point three percent churn and that the churn will never happen because if somebody uh you know adapt adopts a passwordless authentication method they can't move back and move back to passwords because uh you know that will cause consumer behavioral shift right uh consumers will face issues so uh churn isn't something that we're facing and that's the that's surprising very cool heck of a story let's wrap up with the famous five number one favorite business book uh number two is there a ceo you're following or studying yep uh to be very precise in india i have bhavish and which company i have uh you know yep number three what's your favorite online tool for building sawo field online slack i love slack number four how many hours of sleep to get every night four and a half five five okay not a ton but i guess enough what's your situation married single kids oh single as yep very simple a very single all right no kids in how old are you i just turned 25. 25. yep okay 25 years old last question something you wish you when you were 20. uh the fact that uh um growth isn't fun fundraising i uh didn't know that as i said uh when i raised my previous previous round i didn't know that yeah guys sawwell labs is supporting e-commerce brands banks and cryptocurrency exchanges to validate users in a passwordless fashion they went from nothing to 130 000 a month in revenue over the past 12 months they've raised to date about a million dollars their last seed round was 860 000 bucks at a 6.6 million valuations sold 13 now closing on a 9 million round which is very exciting at an even higher valuation you'll hear it live in the interview prabhat thank you for taking us to the top 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 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