SEON Revenue & Funding (2025)

hey folks my guest today is thomas kedar he's the founder and ceo of seon he started the company with his co-founder when they were still students in university and built it from scratch his personal experience has sparked an interest in fraud prevention and his vision is to build an innovative go-to solution for online businesses affected by fraud tomas are you ready to take us to the top hey everyone thanks for having me yes of course i'm ready what's your personal experience did somebody rip you off or what um yeah it's very similar so with my co-founder benson we have launched a crypto exchange during our university years a couple of years back and we actually faced uh food issues ourselves so you know we tried to solve the problem uh ourselves but that we couldn't find an official solution we have decided to develop a tool in-house and then pivot it into 0 and now here we are getting ready for our csb very cool okay so you mentioned series b so you raised some capital how much have you raised to date uh we have raised so far uh 13 million usd one three or three zero one three one three okay and and i guess break that down for me when did you raise the first round um the first round was when we have started the company so about four years ago when we have formed uh the firm and uh then we have raised uh five hundred thousand uh as a seed investment and then we've done um breach round of one million and then we what year was the one million million was 2019 yes and then we raised uh 10 million euros and uh it was about a year ago uh in 2021 yes that's right okay and so i guess help me understand the need for the uh 10 million euros why do you need to raise capital to grow the business uh we have opened our first international office here in london where i'm based at and as well as um we have expanded to uh us so we've opened an office in austin and to indonesia jakarta where we have about this location our business development office interesting okay tell us more about the product so who's paying for this and what are they using it for um we work with some of the largest network banks such as revolut new bank we work with subscription services such as patreon we work with um online gambling companies online lending companies the api companies so uh like after pay and what to use attack for is basically based on uh someone's email address or phone number we can associate your digital profiles to one single data point and then uh we provide an api access so our clients can send through these data points get the rich data take it back and make better decisions based on those and in december alone how many times has your api hit how many process like api processes uh it was more than uh 90 million nine or nine zero nine zero nine zero million just in december of last year 2021 that's right that's that's incredible and how that's across how many companies who are hitting the api well we have uh just close to 200 direct customers but since we have some payment gateway customers we are protecting more than five thousand online businesses out there i see how many how many partners do you have that are one to many um so can you repeat that yeah so you have 200 direct customers and you reach another 4 500 or 4 800 through partners how many of those partners do you have the gateways um we have about four or five gateways so not too many i see okay so those four or five gateways bring you another four or five thousand sort of indirect customers that's right yes i see and how does the majority of the 90 million eight monthly api calls come from the payment gateways or your 200 direct customers yeah it's more than the rest so the big bigger ones these are all small long tail longtail merchants um the majority of the revenue and the api cost comes from bigger businesses 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 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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 evaluation 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 but are the bigger businesses the ones that use you directly or the gateways uh directly okay so the 200 direct customers that's your biggest asset your biggest customer base your most revenue okay that's right and how do you price for this i mean obviously per api hit sort of pricing is very popular these days you look at snowflake and others but how do you do it um very similar it's usually usage based so we pay uh i mean we charge our clients micro fee for each of the api calls and then it's a cost paid such as aws does it's very straightforward we try to do the opposite and then what everyone else does in our industry so it's a micro feed per api call and then what else um that's it that's it okay so how micro we talking like a tenth of a cent or something like that um it's between four to eight cents oh okay so i got it so four to eight cents and has it always been that way or if you're moving sort of up or down market no it's always been like that and we've never raised prices since the beginning okay got it so so force four to eight cents per api call and do you make people buy like a number of credits ahead of time or do they pay as they go us space you go so this is why it's so friction free so we always post post a bill our clients so they don't have to top up anything they can just you know use the system and and then next small beginning of youtube charter interesting and so when you look at on average the 200 direct clients you know they all obviously you know hit the api different amounts of times but what's your sweet spot what would you say the average customer is paying you per month um the average uh the acv is um around uh right now like 55 000 us dollars a year so about 4 500 us dollars a month i would say yep uh okay that that makes sense and um and are those are they they're not committing those contracts though right they're basically paying as you as they go yeah yeah very cool give me more of the back story here so you launched in 2018 um you you've scaled now do you have a co-founder yep yep my co-founder bansa he was music university friend uh he is a ceo of the company he's based in budapest and did you guys just put equity 50 50 at the start oh no it was it was different we we you know uh invested uh different upfront so we have come to an agreement between us but uh we are both happy with this agreement okay so you own more he owns more uh yeah i think uh yeah since i'm the ceo and i i i have uh you know uh started with the investment as a bootstrap investment i i almost yeah i think it's important right so so just be clear it sounds like you put in some of your own money at the beginning to help get the business going and because you put in money and your other co-founder maybe didn't put in as much or put in none at all you got more equity at the start yep that's correct i i see okay now you know you're scaling nicely right so 200 customers out of 4 500 per month are poo i mean that i mean that would put you at about 900 thousand dollars per month in revenue is that right yep yeah actually okay over that are you passed a million a month yet uh not yet that's very close very cool that would be a fun thing to celebrate if you're doing about 900 000 per month right now in revenue where were you exactly a year ago do you remember uh we were uh about third of it one third okay so where is most that growth come from is the same 200 customers thinking the api more expansion revenue or is it brand new customers all together um we've got lots of brand new customers so we have almost doubled our client base but as well as we see a healthy growth from the existing clients so our ndr metrics uh are very good what is the ndr how far above 100 it's uh very close to 200 actually okay about 200 percent yeah that's great obviously that's it doesn't surprise me you're able to raise this much capital uh with that kind of ndr um do you have any gross revenue churn um not really it's like five percent a year we don't see you know businesses uh switching from us to their tools what you see is they cease to exist usually due to some you know business continuity issues such as kobe and so on so tomas 5 gross revenue churn means 105 expansion for a total ndr of 200 about 200 percent interesting do you have a game plan for driving that expansion revenue in other words customer success reps that are incentivized with expansion or how do you do that yes yes we have a bonus scheme in place for customer success but uh since you know it's a usage-based pricing we usually grow together with our clients for other people listening using a transaction-based pricing model or a per api call per seat whatever they're thinking about bonus plans for their css as well can you tell us a little bit more about how you structured your csm bonus plan yeah it's uh you know we set up some base numbers for the uh expansion based on historical data and then anything top of that they get uh you know a chunk of the revenue uh which is extended on the bills on top of the average expansion so it's it's not too much but it's uh you know it's it's very motivational i would say and and you know it's it's something that you know i was not thinking before but our chief commercial officer actually has uh came up with the id and we have implanted just recently and actually it works very well so i can recommend to all the startup founders out there so for 2022 you just did this right so what is what do that what does that see what does the csm have to get above in terms of mdr before they can start earning a bonus oh that's a good question um i i i would have to look up i can't say on top of my mind what do you think it is do you maybe have a no range or an estimate uh i i can look up right now okay and just now i love founders with models in front of them they're my favorite founders always yeah uh net expansion uh should be uh at least a two percent uplift from previous month uh the space and then they earn also the same amount of commission based on that but yeah it's uh it's a new scheme so um as far as uh you know i i so thomas if someone so if i'm one of your csms and i get 100 000 of revenue from last month those customers to upgrade to about 102 000 this month that's the minimum target but if i get them to upgrade 110 000 so there's 8 000 above target how much as a csm would i get in commission on that extra 8k um i think uh yeah it's a good question i think it it would be like uh around the five percent it's it's a bit like it's still based so two percent net expansion get two percent commission so if they have that special expansion let's say like 50 grand they get two percent of which which is one thousand and if it would be five percent let's say hundred thousand can get five percent which is five thousand so one time or is it recurring commission it's recurring for how long uh it's yeah paid monthly and uh that's a good question i think uh at least for i think i got this for one year one year yeah that makes sense very cool i'm seeing more and more founders do this and so thanks for the transparency i think this is another good data point for folks to learn from so okay your per api billing is proving to be very effective your product is very strong people are banging the api more which is driving your expansion revenue through the roof you've chosen to raise some capital managing dilution as you raise obviously very important right so a year ago you said you're at about 300 000 bucks a month in revenue or 3.6 million run rate that's when you did your 10 million series a right and most founders in a series they are selling like 10 to 20 percent of the business were you sort of in that same range yeah just can be okay yeah okay cool so what would that put you out of did you break 100 million evaluation post money uh no not yet close to it somewhat close uh in us yeah yeah yeah but uh this time for the b we will be of course exciting but you're you're raising right now it sounds like the b why is now the right time to raise um yeah it's uh we had two very strong months in terms of prevention and expansion so i think that that's you know a good momentum to go on the market i think it's also the the climate still is uh is is very good and as you know i have explained some of our matrix then it's actually like uh you know very healthy so um i think i think this is the right time we still have like more than any runway so we are not you know in a position where we will need you know cash quickly but we are also feeling that you know since we have two very strong months it's the right time yeah that makes it timing is is very important so how much are you targeting to raise in the series b uh yeah it's hard to say we'd like to rely also on the guidance from the investor we have some plans but you know i wouldn't share them up front as long as uh the top sheet is not signed and the money is not launched in but yeah it it will be it will be announced very soon actually around what uh it will be announced very soon i mean the raise process that takes a while i mean so so like i mean i guess what i'm asking is are you trying to do like a 20 to 30 million dollar series b or more like a 60 to 80 million dollar series b uh yeah yeah it's more like 60 to 80 million dollar series b and what valuation i mean do you think you can command like a 400 500 million post money valuation raising that much or no uh i think it's definitely double you think what it's definitely double okay so if you raise it like a 70 million series a you can get up to like 150 180 million series b something like that um yeah well you know we raised uh 10 for our a in in euros and then this time uh it's going to be uh you know hopefully at least uh six to eight times multiplied so rb will be yeah around 60 um to 280 that's what we're aiming at but you know it's uh still uh ongoing so it wouldn't uh well what i'm trying to get though thomas is how you're managing dilution so raising 60 million on 120 million valuation you're selling a third of the business that's money all right no i mean valuation would be like of course uh you know we would title the same amounts before so standard dilution you know between 15 and 20 percent got it so you think you can go out and command like a 400-ish 420 million dollar pre-money valuation something like that yeah yeah 40 40 x multiple well that's uh you know what to see on the market today is uh it's quite insane you know like violations are multiplied uh a multiplier of the uh uh uh 40 to 80. uh we see c80 and and you know we see where we end up but i'm quite optimistic so i hope for the best yeah i know there's a comp from last month or last week that closed cognizam 25 million bucks in revenue uh about doubling year over year uh raised at a 436 million dollar valuation so you know we're seeing 20 to 80 x multiples all over the place um yeah well good luck you have to let us know if that sort of goes through now um that capital what would you use it on i mean dilution's dilution right you're going to sell 10 20 percent of the business why do you need it um yeah we would like to open um some more offices in one hand and of course uh you are you know mainly uh increasing the uh number of teammates in uh our headquarter which is in budapest hungary that's where we keep the whole r d and product development so we would like to add uh almost 100 new engineers um the team right now is uh there's 140 people there how many engineers uh about 70 currently 70. okay very cool or and just to close out the sales questions for you so how many folks on your sales team carry a quota right now um all of them how many um yeah we have uh about 10 bdms and we have the similar same amount of sdr's so we got uh yeah 20 and because of course bdrs too but they don't have quota really so so 10 carry a quota um no i mean like uh the mediums have uh you know like a quota for for the bonus scheme and of course the sdrs have just monthly minimum quota i see got it and then the see how many csms you have um i think it's almost done now yeah yeah because they're recruiting so got it so between sdrs bdrs aes and csm's we've got about 40 people on the sales team yep very cool all right let's wrap up here with the famous five number one favorite book uh uh not always rules you know what no rules number two is there a ceo you're following or studying uh so can you repeat that is there a ceo you're following or studying um yeah of course uh like uh jeff bezos number three what's your favorite online tool for building xeon uh favorite online tool uh let's say uh sigma number four how many hours of sleep to get every night eight hours and what's your situation to most married single kids um i have a partner but it's not right okay and how old are you i'm 27 years old last question something you wishing you knew when you were 20. uh i'm still 20. so uh when you were 20 2-0 2-0 years old oh yeah uh well yeah i'm a bit older that's uh something i wish i would know or i would done just something you wish you knew ah i wish i knew um yeah well like investing in uh in that acquisition is more important than uh you know i i would have thought back then but uh yeah you know it's a it's a journey we're all learning right guys sound.io launch in 2018 they help large neobanks and patreon and lenders quickly verify accounts that over 90 million api calls just last month hitting their system right to verify a bunch of these identities they grew from 300 a month in revenue a year to 900 000 a month today about a 10.8 million dollar run rate 200 direct customers another four to five thousand through payment gateways they partner with uh they raised a 10 million dollar series a last year sold between 10 and 20 percent now raising call like a 60 to 80 million series b at a much higher valuation we'll see what happens there a team of 140 70 of which are engineers thomas thanks for taking us to the top thank you too take care 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 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