How Serviceform Reached $1.8M Revenue and 420 Customers in 2022 (Interview with CEO Iranthi Gomes)

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is Aranti Gomez. She is she was born and raised in Sri Lanka and now based in Europe. She moved to Melbourne, Australia for university, then ran and sold a mobile coffee catering business. She found another business problem and built serviceform. She's now grown up to a team of 52 people and raised 3,000,000 USD. A Harry Potter fan, she builds Legos for fun and took up golf recently. Again, now building serviceform.com, which

00:20helps you get rid of bad customer experiences. Aranti, are you ready to take us to the top?

Iranthi Gomes

00:26>> Yes. Sounds good. Very exciting.

What Serviceform Does and Who It Serves

Nathan Latka

00:28What does that mean? Tell tell us an example of a customer using you and how you help them get rid of bad customer experiences.

Iranthi Gomes

00:33>> Okay. A good question. So with whatever we have done so far, Nathan, it's been that anything that we've offered is being around website conversion. So that has been basically the main focus. And something very important to highlight is our customer audience has always been the traditional business. So I don't know how much you know of the backstory of how serviceform was born, But, you know, the idea was that we were working with the traditional businesses in

01:00>> the hospitality space. And we saw that

Nathan Latka

01:02What year was this? When did you launch?

Iranthi Gomes

01:04>> This was in We actually started in early twenty eighteen.

Nathan Latka

01:09Okay.

Iranthi Gomes

01:10>> So before that, we had a little coffee catering business in Melbourne, then that's how serviceform was born. So when that happened, we were working with hospitality partners and, you know, these people were very good at what they were doing, very good at events, running a catering business, but knew very little about technology or even what's out there available in the market. So our customer audience is basically the traditional business. So if you think someone like

Nathan Latka

01:34So it is your coffee shop, your mobile coffee catering company would be a great customer for serviceform.

Iranthi Gomes

01:40>> Exactly. Perfect.

Pricing Model and Average Customer Value

Nathan Latka

01:42Very cool.

01:42That's amazing. And then

01:45help me understand how you price. Right? So are you selling $10 a month, a $100? What's your average customer paying per month?

Iranthi Gomes

01:50>> Right. Okay. So with even though we are SaaS, we are more service model SaaS. Right? And the fact that we're working with the more traditional business around real estate, automotive, anything in the service industry. So we do have the typical SaaS monthly subscription. So our pricing starts from about €250 upwards.

Nathan Latka

02:10A month?

Iranthi Gomes

02:11>> A month. Yes.

Nathan Latka

02:12Okay. What's the average customer pay, would you say?

Iranthi Gomes

02:16>> That's about 300.

Nathan Latka

02:17Okay. And your biggest customer pays how much?

Iranthi Gomes

02:20>> Yes. I was getting to that. So they pay about almost 4,000.

Nathan Latka

02:25Per month?

Iranthi Gomes

02:26>> Per month. Yes.

Nathan Latka

02:27And why do they pay so much more? You're giving them more leads or getting more product. They have more seats. Why do they pay so much?

Iranthi Gomes

02:31>> So it's a mix of a lot of things. It's a mix of so because when we start working them, it's because we have a whole set of conversion tools that we use. And right now, we've actually gone out of the space. We've gone into management, meeting scheduling, all of that. So, when we start working with them, it's always to do with conversion and with a few tools that, you know, can actually help them get started. But

02:51>> then, more time goes on, we add in the other tools depending on the size of the business. And then comes in more seats because we have our live chat software. We have our meeting scheduling, you know, seats. So all of that. And then also it depends a lot on the size of the business.

Nathan Latka

03:10Very cool. I love this. Okay. So that's helpful. You launched in 2018. Your company was your first customer, sort of, your mobile coffee company. How many customers are you serving now today?

Customer Count and Partner Channel

Iranthi Gomes

03:20>> So right now, a bit over 400. Around four twenty ish.

Nathan Latka

03:24Okay.

Iranthi Gomes

03:25>> But then if you look at it in the sense of, like, because we work with a lot of partners, our tools are live in about maybe over 2,500 websites.

Nathan Latka

03:32That's okay. So one of your go to markets is through partners?

03:36>> Definitely.

03:36Okay. Let's talk about that in a second. If we take your 420 customers, though, at the average price point of 300 a month, that would put you at about a $120,000 a month right now in revenue. Is that about right?

Iranthi Gomes

03:46>> Actually, it's more. It's about 150,000 in MRR right now.

Nathan Latka

03:50So your ARPU is a little bit higher then?

Iranthi Gomes

03:52>> Yes.

Nathan Latka

03:53Is great. Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second. But you log in,

04:17you connect your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company,

04:42you're gonna get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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

05:04this 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 founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple.

05:29Maybe you're going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right. We're gonna go back to the YouTube video here in a

05:51second. But if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. 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. Alright. Let's jump

Revenue Growth and Seed Round

Nathan Latka

06:18back into the interview. Okay. So if you're doing a $150,000 a month today in revenue, help us understand growth, Aranti. What were you doing exactly one year ago?

Iranthi Gomes

06:25>> So I think last year, I remember when we ended because at that point was when we raised our big funding round, a big seed round of 2,200,000. So at that point, I think we were about 65,000 in MRR. So I think growth wise, it's now been 8.5 to 9% month on month.

Nathan Latka

06:43Yeah. That's incredible. So 65,000 a month a year ago, up to $150,000 a month today. You mentioned a seed round. So you closed that last year. It's 2,200,000, you said?

Iranthi Gomes

06:51>> It was early this year. So we started commerce, like, the whole discussion late last year, and we closed it early this year.

Why Serviceform Raised Funding

Nathan Latka

06:57Interesting. And and, 2,200,000 pre seed round. I mean, most folks are selling 15 to 20% of their business in pre seed rounds. Were you in that same range?

Iranthi Gomes

07:06>> No. We are much more than that in terms of the, wait. I'm not answering the question.

Nathan Latka

07:11Yeah. So someone give you a check for $2,200,000. Most pre seed rounds, that equity investor is gonna get 15 to 20% of the business.

Iranthi Gomes

07:18>> Yes. Absolutely. It's around that.

Nathan Latka

07:20You were in that same range? Yes. Okay. Very good. So we could take 2,200,000 in times, like, six or seven. You raised it, like, at between a 10 and 15,000,000 valuation. Valuation, not multiple.

Iranthi Gomes

07:32>> You're you're hitting figures there.

Nathan Latka

07:34Alright. Very cool. Why did you need mean, look. Dilution's dilution. Right? You just give up 20% of your business. Why do you need to give up that amount? I mean, why can't you build this and bootstrap it?

Iranthi Gomes

07:43>> Well, multiple things. It's it also comes down to, like, let's say because me and Yarq, my co founder, it's just just the two of us who started, and now we are almost, you know, 60 based in both countries.

Nathan Latka

07:54Six zero?

Iranthi Gomes

07:55>> Six zero. Wow.

07:57>> I know. Right? So we started in Finland because he's Finnish. We were operating the coffee business in Melbourne, but then we realized if we really wanted to do business globally, it would make sense maybe if we moved ourselves into Europe. So, he's Finnish and that's when we opened up the actual business in Finland. But then we were operating in the Finnish market. And if you have operated in the Finnish market, you would know a lot of

08:20>> companies don't tend to go outside. So everything that we were doing, everything we were learning was very much towards the market. And we realized it was time for us to step out. And then that's when we thought, hey, it might be nice to bring in people who have done this before, get new ideas, move into different markets. So, with that in mind, and then we really wanted to push and grow the business. So then, of course,

08:46>> we thought investment would be the way to go. And then that's when a Swedish VC a company backing Minds came on board.

Team Size and Customer Success Model

Nathan Latka

08:55Yep. 60 people. That's a so for 1,800,000 revenue, that's a lot of employees. It's it's taking you a lot of humans to generate not a lot of revenue. 30,000 of revenue per employee. Why do you need so many people?

Iranthi Gomes

09:07>> Good question. So with us being SaaS and working in the traditional space, you know because right now, I'm sitting at WeWork in London. And if you go and ask anyone here about what a CRM is, a conversion software, they'll all know what it is. But you go out and speak to much of the businesses out there, they don't know, right? So working with that target market, we have seen that we just hand over the tools to

09:32>> them and tell them, great, you paid us a month in subscription fee. Now you can go figure it out. And here's your help documentation. It just doesn't work that way. We have tried it. So, we have a whole customer success team in place to make them successful. So, with that, we have many humans on board.

Nathan Latka

09:53How many on customer success?

Iranthi Gomes

09:55>> So I think we have about 15

Nathan Latka

09:57success are they based?

Iranthi Gomes

09:59>> They're based in Finland, Sweden, Spain, and Sri Lanka.

Nathan Latka

10:04Okay. I mean, but how do you how do you pay? So, I mean, what I'm looking for here is, are you paying some of these 60 employees, like, really low amounts of money? That's the only way that you could generate revenue at 30 thou I mean, profit when you're doing 30,000 revenue per employee.

Outbound Sales Team and Quota Structure

Iranthi Gomes

10:17>> Yes. But I I also wanna touch on one more thing. And the other reason why we have so many people is because our entire business so far, I would say maybe about 95% of it is outbound sales driven. So that's where, you know, more people come in sales. And we have about 25 person sales team.

Nathan Latka

10:35Do they all have a quota?

Iranthi Gomes

10:36>> Actually, 20.

Nathan Latka

10:39Do they all have a quota?

Iranthi Gomes

10:41>> Yes, we do. But the fact that the quota is around about six deals a month per person.

Nathan Latka

10:51Which is how much revenue?

Iranthi Gomes

10:53>> So it ranges it'll be about 1,500 in MRR.

Nathan Latka

10:56Okay. So you're asking them a sales rep in a year to add 1,500 of new MRR per month, or that would be 18,000 of new MRR per year. Right, times 12 is about 216,000 of new ARR per rep per year. How do you pay a rep if they're only bringing in $200,000 of new ARR?

Iranthi Gomes

11:13>> So we structure a lot of it through so we, of course, we have the base fee, and then we structure most of it through a performance fee.

Nathan Latka

11:22Mhmm. So if if you were hiring me, what would my base fee be?

Iranthi Gomes

11:25>> It depends. I'd have to interview you, and we can

Nathan Latka

11:29Let's let's say I'm let's say I'm, like, I'm I'm a junior. I'm just getting into sales. Like, what's the lowest my base could potentially be if I'm working for you?

Iranthi Gomes

11:36>> So it'll be about, I would say, 2.5?

Nathan Latka

11:39Per month?

Iranthi Gomes

11:40>> Per month.

Nathan Latka

11:41Okay. So 2,500 per month. And then if I hit my quota target, how much could I earn over the year?

Iranthi Gomes

11:46>> Let's see. So our commission model is very much structured towards MRR. Right? So with every, deal brought in, we do two x in MRR. Does that make sense?

Commission Model and Contract Terms

Nathan Latka

11:58No. So if I close a $100 a month deal, how much commission do I get on that?

Iranthi Gomes

12:02>> You make 200.

Nathan Latka

12:05What if the customer that I bring in churns after one month?

Iranthi Gomes

12:09>> So that's the other thing. So because we do as a service model, we don't we don't charge them also I mean, we don't do any separate setup fees. But what we do is on a minimum base, we charge them either three months, six months, or twelve months. Then, you know, guarantee that they pay up for three months.

Nathan Latka

12:29That makes a lot of sense. Okay. And is this why you've been able to more than double your revenue year over year? It's the sales motion?

Iranthi Gomes

12:36>> Yes. It is. And and something that we've been really trying to figure out this year, which we started, is the marketing side, the inbound side. But we all know how it takes time. Finding the right message, that definitely takes time. Outbound versus what has worked really well for us. And then we are focusing We are basically doubling down on what's working for us.

Cap Table and Founder Ownership

Nathan Latka

13:00Yeah. That makes a lot of sense. Now when you launched the company, you mentioned a cofounder. Did you guys split fifty fifty at the start? Yes. Even Steven, right down the middle?

Iranthi Gomes

13:09>> Even Steven.

13:10>> And fun fact, we also married.

Nathan Latka

13:11No.

13:12Ah, that makes it a little easier. Okay. So the only other people on your cap table besides you and your spouse is the pre seed investors and maybe some employees with the ESOP pool?

Iranthi Gomes

13:24>> Yes. And then we also do have a few angel investors who came on board when, you know, when we started right in the beginning.

Nathan Latka

13:31What did they put in? How much total?

Iranthi Gomes

13:34>> So that in total, we have about 2,500,000 raised.

Nathan Latka

13:38Okay. So the angels put in 300,000 back in 2018?

Iranthi Gomes

13:41>> Yeah. So it it didn't come all at once. So it was like, you know, bits and pieces because now they have been on board with us for, you know, ever since we started.

Nathan Latka

13:49Fair. Fair. Fair. Okay. But you and your your spouse still own together, what, about, like, 75 to 80% of the business? Something like that?

Iranthi Gomes

13:56>> I think it's about 65.

Revenue Targets and Market Expansion Plans

Nathan Latka

13:57Yeah. 65. Okay. That's not bad. Very cool. Alright. What do you wanna grow revenue to with this new round of funding? So you spend the full 2,200,000. What do you hope revenue is at when you run out of that money?

Iranthi Gomes

14:06>> Okay. So let's go with years. So by the end of this year, we're estimating to hit about 170,000 in MRR. That's roughly about maybe 1.5 to 1,600,000 in revenue. And next year, what we're very excited about is getting that up to 500,000 in MRR. And this now, our main markets that we're operating has been in Finland, Spain, and Sweden. And Finland has been the market that's been doing well so far. So we want to get, Sweden

14:37>> and Spain up to that same level. And then we have plans to expand to a few other markets.

Nathan Latka

14:42Well, Aranti, we're certainly rooting for you. This is a great story. You guys got a lot of revenue here before you did that 2,200,000 round. So hope you come on in a year and give us an update. But in the meantime, let's wrap up with the famous five. Number one, what's your favorite business book?

Famous Five: Books, Tools, and Personal Insights

Iranthi Gomes

14:55>> Business book. How to influence friends. No. I can't remember what's the word.

Nathan Latka

15:02How to Win Friends and Influence People.

Iranthi Gomes

15:03>> How to win friends and influence people. Yes.

Nathan Latka

15:05Alright.

15:06Number two, is there a CEO you're following or studying?

Iranthi Gomes

15:09>> I've always been a huge fan of Richard Branson. I think I would give my entire entrepreneurship career to him.

Nathan Latka

15:15Yeah. I love that. Number three, what's your favorite online tool for building serviceform?

Iranthi Gomes

15:20>> Google Chat. That's Okay. One main tool that it's been very important.

Nathan Latka

15:25Number four, how many hours of sleep do you get every night?

Iranthi Gomes

15:29>> Depends. Five?

Nathan Latka

15:31Six? Five? Okay. Situation, married well, you're where are you now? You're married. Any kids? No. No kids? Okay. And do you mind me asking how old you are?

Iranthi Gomes

15:38>> I'm 29.

Nathan Latka

15:4029. Last question.

15:41Something you wish you knew when you were 20.

Iranthi Gomes

15:44>> Something I wish when I was 20. Well, that I would live in The US because I've always loved New York and I did it.

Nathan Latka

15:54Guys, there you have it. Serviceform.com launched in 2018 after she sold her mobile coffee delivery company. Serviceform helps small companies and SMBs like her coffee company get more leads faster. Got 420 customers today that pay on average $300 a month, doing a 150,000 a month in revenue, up from $65,000 a month just a year ago. So really nice growth. She just closed her pre seed 2,200,000 round at between a 10 and 15,000,000 valuation. Her and her cofounder,

16:18which also happens to be your spouse, still own over 65% of the business. We're certainly rooting for them. Aranti, thank you for taking us to the top.

Iranthi Gomes

16:25>> Thank you, Nathan.

Nathan Latka

16:28One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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

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