SemiCab Revenue, Valuation & Funding (2024)

hey folks my guest today is ajesh kapoor he believes there's a better or better ways to do things he rejects the status quo is always going to learn more so we continue to improve each day numbers are constantly on his mind today he's building semicap.com to make transportation a competitive advantage are you ready to take it to the top excited to do it nathan okay so who's paying for semicab right now who are your customers so customers are large enterprises like staples and pepsico uh colgate hp uh some of the smaller mid-sized companies that are always looking to move goods in a truckload full truckload when you see those large trucks out there they're moving goods and they're not doing it very efficiently so we are building this marketplace to uh make them much more efficient than they are today so let's talk about the marketplace how many people that own a truck do you have on your platform that's a good question it's a very fragmented market uh we we have uh an industry that is dominated by these numbers where people talk about bringing in uh 10 000 thousand hundred thousand a million trucking companies on the platform the fact of the matter is uh u.s market is dominated by small carriers and owner operators close to somewhere around six hundred thousand legal entities that are operating trucks we try to be very targeted in how we bring in partners into the ecosystem so we have about 1200 carriers but we try to create a very long-term relationship with them so we are not just addressing the shippers who are paying for transportation but these guys that we take we take good care of and build uh a more predictable revenue stream for them so they are taking advantage of the marketplace and over your entire company lifespan how many shippers who pay for transportation have paid at least a dollar through your platform so we again uh over on that side also we try to bring in a small number of shippers that we want to create a core with and once we have built the core up to a reasonable size that's when we start attracting the smaller and mid-sized shippers so we when we bring in a a large shipper uh there's this large enterprise we don't really have uh a good sense in the market of what kind of numbers they represent so a large beverage company may spend somewhere around a billion dollars a year just on the truckload part of it moving goods no i get that education but how many do you have that have paid at least a dollar through your whole life lifetime yeah we we started uh bringing on customers at the end of 2020 and we have eight customers uh that we have brought on during this time okay got it so 20 now when did you launch 2020 is when you got your trucker but when did you launch the business we launched the business in 2018 we wanted to build out the platform we wanted to the first time we were introducing this kind of technology the predictive optimization technology so we tested that out over a very very large uh data set before we actually launched and went to the market and help us understand velocity today let's just look at january of 2022 what's the total project value that went through your platform in those 30 days yeah so that that has been a pretty crazy growth for us so when we talk about april last year april of 2021 right in the middle of covid when we are acquiring these customers and moving goods we started with let's say uh five to ten loads a week what's the dollar value of that oh yeah it's so uh if you analyzed it it would be 400 000 when we when we look at uh january that we just finished oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview uh we were somewhere in the in excess of 11 million analyzed right so a good 25 to 30 x growth during this period and how many loads is that through your platform in january 2022 that represents 11 million in project value yeah about 100 loads a week is what we do so about 400 total yep okay so so these are expensive right if we take 11 million in project value divided by 400 total loads these are 27 500 per truck on average like per per load what 2700 not 27 000 well if we take 11 million divided by that's the annualized that's the annualized number nathan okay got it so again the question was just in january how many did you do so you did about a million in january across 400 loads that's right okay got it so yeah i see what you're saying now so it's about 2 700. and what's the average use case are they shipping from ship driving from chicago to new york city or from san francisco to washington dc yeah there's not not a typical load for us we we are moving goods uh all the way from so southern california is big right all the stuff that is coming in on those ports it's going across the country so coming in from southern cal into dallas into the northeast into chicago into atlanta and then you are moving goods between northeast and the midwest that's a big volume everything from between texas atlanta in the southeast going up into uh the midwest and the northeast those are some of the busier lanes for us and then we do a little bit of stuff in the rockies where uh of course you get into all kinds of squirrely stuff as the snow snow starts coming down as heavy and shutting down highways when it does that this is fascinating okay so just to summarize the marketplace as it stands today has about 1200 people that drive trucks on it and you match them up with shippers who pay for transportation where you have eight big clients right now total right now your run rate you know they did about a million bucks in total project value across those eight shippers in january of the 400 loads that were processed how many truck owners the 1200 on your platform facilitated one of those 400 payments or 400 shipments so out of the 1200 that have joined the platform we have actively used 700 during our lifetime till this point so what you and actively use means you pay them at least a dollar you pay them at least a few thousand dollars yes okay so so yes but what happened to the other 500 you got you did all the work to get them on the platform and you haven't been able to get them any work yet yeah every single time so there are a whole lot of things that we go through so we go through a carrier betting period where we want to make sure that the customers are receiving the best quality service that they can and so you go through that period you're watching the carriers and then some of the carriers don't qualify they join the network they join the platform but they don't get through the qualification process that we have to bring them in and give them a load right what's the number one reason people don't make it through what's the actual reason there is uh there's a whole lot of uh historical data that we want to go through we want to make sure that the insurance requirements are met the safety requirements are met so we allow the carriers to self-register but if they don't meet the safety and insurance criteria there's uh it's very hard for us to work with them i see i see okay let's put this on a timeline so you launched in 2018 you get your first customers it sounds like in 2020 you're scaling out today have you bootstrapped this as you sure have you raised capital we have not raised institutional capital until now so we we have raised capital from all kinds of professionals from uh the supply chain space from the technology and finance space so a whole lot of people who have been very interested and very supportive how much have you raised from those people about five million okay and would you consider that like a seed round what we did the last was a precede followed by a bridge round uh now the terminology for the rounds has been changing all the time so most likely what we will raise next we are going to call it a series a i see i see but have you have you has always been on a convertible note paper or has anyone priced the round we have done a price round before you you have okay so some portion of the five million you raised today like the last tranche of that was at a priced round the valuation yeah after the price round we again went back to a safe note why did you okay well let's break that down so what was the valuation on the priced round that you did or a range is fine uh so that was below 15 million when we when we did the price round in uh the end of 2020. okay and how much did you raise on the 15 million valuation that was uh until that point we have raised uh right around 2.1 million until that point so 2.1 million okay so 2.1 million on notes and then those all converted at the 15 million valuation did you raise more money at 15 million like on top of the 2.1 or just 2.1 just the 2.1 including the price round and then we raised uh the rest of the three million after that on safe notes why did you go back to a safe note it's just uh when you're trying to do a bridge round nathan it's so much more convenient to go the safe route you can get it done rather quickly and you don't really put the owners of valuation again because the market today is where the valuations are pretty nuts especially in a freight tech kind of marketplace so just because that three million was that this year or was 2021 it was end of 21 beginning of 22. yes i see so 3 million c now what cap was that note at about 35. okay so it was your valuation still like technically went up right you're just comparing the price round to a cap that's right interesting um okay tell me more about we haven't talked about how you make money right you've had this great marketplace on a 2700 shipment how much do you make yeah it's so we don't we don't approach it as a very basic marketplace because there is those are a dime a dozen where a load comes in and they basically find a carrier and they try to make money from that where we make money is when we bring in all these loads from different people and we are able to utilize the resources that are coming in from the carriers from the truckers much more efficiently so for example a truck in a week would drive 2 800 miles and get paid for less than 2000 miles we use it for about 2 500 miles so those 500 additional miles generate let's say twelve to fifteen hundred dollars in additional revenue we take a part of that so we don't make money unless we are creating those efficiencies in the market so you're taking a percentage from drivers where you've taken unutilized miles driven and made them utilized more efficient not not directly in it so what we do is we sell transportation services trucking services to these large companies we buy trucking services from the carriers but we use a different model on that side so we might combine three loads from three different shippers on one side but then execute it as a round trip and that's where we create the spread and make money okay okay so in january how much did you guys make as a business about a range is fine not not going there right now why is that it's just uh the when we think about the margins and the ebitda for the business we think about it on more of an annualized basis when you look at the trucking market right now the trucking market is so up and down all the time but it has been at a crazy up at historic highs the last let's talk about annualized what do you what do you think you'll do in 2022 total revenue yeah we we we like to target the lower end of 12 and a half to 15 on that on that revenue that we bring in so got it so on the million that you processed in january which right now annualizes about 12 million you're saying you target between a 12 and 15 sort of take rate from that that's right i see i see got it so on a million you could say you know maybe you guys took you know 13 of that 130 000 bucks last month once once we start yeah so that that depends on how efficiently we execute the freight and so that part of the world fluctuates for us i see how much will that fluctuate this year like is it based off seasonality or something else it's not just based on seasonality it's uh based on when the customer enters where the efficiencies come in because every single time a new customer joins our ecosystem we start expanding the entire footprint including our current customers right so as we go through the expansion parts of it are less efficient than others but the idea there is as you are getting to 50 million 100 million 500 million you are going to stay become very very consistent at that 12 to 15 level and if you're doing sort of a million dollars in volume last month do you remember what you're doing a year ago so we can calculate growth rate uh zero well you said that you were doing you said that you did let me go back to my notes here you said that april of 2021 april 2020 is when you processed your first five to ten loads yeah so let's say april 2021 is when we did let's say 30 000. got it got it i see got it so you've basically it's only february we're about to be june february march april so you've only been business sort of 11 months but you've grown from your first month of revenue in april what about 30 000 bucks a month in revenue up to 120ish now something like that to a million 120 well oh sorry you're talking about volume not your cut i'm talking about your cut so if you're doing a million in january your cut was about 120 grand or something like that yeah so yeah back back then it would have been what three four thousand dollars yeah yeah yeah okay that's a big that's a big growth small base obviously we're playing games with percentages here but still a good growth rate um why i guess i just don't understand with that kind of growth rate i just don't understand why you wouldn't go keep things clean and do it on an a traditional equity round at like a 30 40 50 million valuation is it really that much faster is it worth it to go back to the note it's not about uh so so the note is just a component of the kind of round that you're doing in the timeline that you're doing it the reason we did the bridge round was we're talking to a lot of investors but uh the investor that you want to bring on as a lead investor that has a very direct implication on where the company is going to go so we are being extremely selective about who we want to lead that round it's not like we're trying to stay away from institutional money if we want to grow from 10 to 100 million we are going to need institutional money and we are going to go and do that round uh it's more is a question of not running out of runway and just making sure that you are going to get to the point where you have the right investor in how do you make sure that your marketplace has liquidity so let's say one of these eight shippers pays and needs you to ship shoes from chicago to denver uh but you can't go buy that inventory from any truckers because some other people are paying more than you there's a lot of these networks out there how do you guarantee that placement yeah it's not just a question of uh so that that was one of the thoughts that we had when we were starting out and uh we were extremely focused on it so that's the one big part where we talk about using the carriers more and more and more that we have in the network and not go for 50 000 carriers that's a big reason so the carrier loyalty starts building up and when you have that focus so in our case we have to be we have been able to maintain a good 99 plus load acceptance rate with every single one of our customers industry standard out there is somewhere between 50 and 70 so that's a big huge jump for us right and we we focus on that uh not stay away from oh if we have to pay a little bit more money we'll pay a little bit more money but over the long term the basic concept is if you're doing right by the carrier the carrier is going to be right by you and how many folks are on your team today full time 16 uh people full time how many engineers we have uh the engineering team of 10 people including product managers okay okay got it very interesting um it sounds like across eight customers i mean it sounds like what they're i mean eight into a million what they're each spending like 150 grand a month something like that some of them are just starting out right nathan so okay so the big huge pieces where uh some of these customers have uh some customers started in march and april last year some started in september last year some are just getting going so uh the numbers in january don't really reflect the overall volume that we are doing and why are you we'd already talked about like you have to you have to win two sides here why are these eight shippers choosing to go with you versus your bigger competitors that maybe can negotiate for lower rates yeah it's not about rates and it's not about what those guys bring in we have a fairly unique business model in that we we don't go for transactional pricing and dynamic pricing that pretty much everybody in the digital freight space is bringing in which are who name three people in the space uh so uh you have uh um let's say convoy out of seattle a great company uber freight there's a company called two companies called transfix and load smart out of new york all of them uh went after a very different problem in this space right they basically said you have a whole lot of phone calls very little automation in the brokerage space you have small carriers and owner operators have a very hard time finding a load and they basically automated that process brought those carriers into the mix and they did a great job of it right do you compete with do you complete with freight waves we don't compete with freight waves now what about flock freight not really because flock freight is also trying to do uh taking the less than truckload shipments and kind of executing that in a full truckload multi-stop model very very different from uh where we are trying to play but aren't you all competing for the same space on those six hundred 000 trucking companies in the us not not exactly so where we go is we don't really specifically go and try to find supply from the small to mid-size carriers or owner operators okay we we want to bring in the mid to large carriers because we are trying to create a virtual dedicated fleet in there and so when you are doing that you're basically finding the capacity from wherever you can find it and uh get that into the system and utilize them efficiently and that utilization that efficiency that optimization you're not really going to hear about that in this space at all nobody talks about optimization in this space when they're trying to approach this problem very cool as i love what you built a great story here in the meantime let's wrap up here with the famous five number one favorite business book uh let's see peter drucker i guess number two is there a ceo you're following are stuck in you know it's a that's a good question i i like what brad jacobs did at xpo uh i used to follow uh chris lofgren at schneider national uh there are so many of them yeah carol tommy is a great example at ups right now number three what's your favorite online tool for building the business oh that's a that's a tough one there's just so many different technologies that we've been able to use that have shortened everything that we are doing right now anything from all the the whole thing that aws has compiled in there then you combine that with uh all the stuff that is happening on the fintech site like brexit ramp on the hr side like gusto it's uh every one of them has an advantage now uh when we talk about the marketing side of it hubspot uh web flow all these things have just made it's so much easier to build the business this time around uh than what we used to have 10 20 years ago right number four how many hours of sleep to get every night that changes that changes nathan so anywhere from four to eight depending on what what day it is and what's uh what the financial situation looks like and what's your situation married single kids married with uh with a very beautiful kid yes okay one kiddo and how old are you i am uh oh man 55. 55 last question something you wish you knew when you were 20 oh if i knew uh how it takes a village to build a venture like this if i knew it the first time i was trying to build my startup it would have made it so much easier guys semicab.com launched in 2018 is helping helping eight folks that need to pay truckers to ship their goods he's helping them spend about a million dollars per month right now to access over 1200 truckers on his platform they aim to take somewhere between sort of 12 and 14 percent of that total million dollar volume they processed their first truckload back in april last year just 11 months ago so really healthy growth rate they raised their less equity around a 2.1 million at a 15 million valuation and then just raised this year or late last year this year three million call it a seed round back on a convertible note out of 35 million cap as they look to keep scaling uh up past 16 people we'll see what happens thanks for taking us to the top thank you nathan thank you for having me 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 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