Showell Revenue, Valuation & Funding (2024)

hey folks my guest today is sami shoony he's the ceo and founder of a company called schwelle he's been an entrepreneur for 15 years started a web development agency while studying at the university and now is building the firm focused on sales enablement all right sam are you ready to take the top hey nathan uh thanks for having me here you you bet you're in a hot space gong outreach sales loft it's very competitive how are you differentiating uh actually we are not competing against gong and sales for example so it's more about against chauvin and high spot so high spot high spot also big big company what was the other one you mentioned uh show but show pad and high spot yeah okay so how are you differentiating what's different uh well they are mostly targeting you know larger enterprises while we are maybe targeting more small and medium-sized enterprises okay so what's the average customer paying you would you say per month uh fifteen to fifty thousand uh sorry annually fifteen thousand annually to five zero thousand annually yeah yeah okay so about caught a thousand and two thousand dollars per month yeah exactly and and tell me a little bit about the product what are they paying for where they get so shortly say sales enablement tool so what it means is that it provides the relevant the right content for sales teams at every step along the buying journey so that they are able to present and share the content with their prospects and clients and and where are you today in terms of customers how many total uh we have about 300 customers right now 300 when was the first one when did you launch so we launched back in 2012 so we have been around for a while uh although we kind of did a reset a couple of years ago when we raised our receipt round how much was the seed uh one million one mill and what year was that uh 19 2019 19. why was 1 million the right amount to raise in 2019 um well it felt like right amount uh we didn't want to raise race more we didn't want to race less okay then the call would hit and things changed a little bit so we were planning to open offices a couple of offices uh we still do those of we still still do have those offices but um now things have of course changed a lot what valuation did you raise the million on uh about six million okay was that high or low at the time did you like that i thought it was okay at the time do you remember how much revenue you were doing at that time uh a little less than one million one million okay wow that's great so how did you get your first customers back in 2012 let's get the journey to a million yeah well basically uh as you said yourself we had a web development agency so we did have some customers so uh customers came to us asking for a way how they could uh get their sales collector into the ibis so basically we kind of just started building a beta beta versus and testing would it work uh seem to work uh so that lead us here yep okay so how big was the agency in like 2011 remember how much revenue the agency did just by itself the agency back in 12 was maybe about one million one and a half million okay so not not a small agency now is that you shut down no no it still exists but we kind of this was a spin-off but we completely separated those two companies couple of years ago and when you say spin-off what does that mean for the cap table how much do you own uh well i i personally own about one third of the comp and how much does the agency own uh nothing okay who owns the other 66 percent yeah as i said uh we raised seed rounds so we have of course going to venture capital um in the background and then we have you know private owners who are also employees of the company oh very cool so you let your employees buy or is it a stock option pool basically you give out equity uh we don't have actually currently a stock option plan uh we have you know kind of um given the the stock for for some of the employees great previously yeah i see very cool and it sounds like that 300 customers today in a 1500 a month average price point you're what is you're doing about 450 000 a month in revenue today not accident not actually that much but uh we are getting there okay when you think are um i would say that end by the end of this fiscal year so right now we are at about 3 million arr we we don't calculate mrr that much so it's not that relevant for us because customers pay us you know 12 months ahead and there are always annual contracts well sure but but for financing you just divide by 12 to back into your rate so about 250 260 per month in revenue or about a 3.2 million dollar run rate but again most that cash is up front so you should you've been able to be them pretty cash efficient if it's always annual upfront payments yeah it's a it's a really good situation at the moment so you know the cash class is good so we don't have that yeah and you've grown 3x since your million dollar raise at a 6 million valuation what do you think you're worth today evaluation wise um 30 to 50 million and why why that well just just by looking at our you know customer base we have you know really good logos uh you know well well-known brands from all over the world uh we have a really good you know growth rate at the moment um we also launched the world's first kind of a product lit growth model premium model um sales enablement tool just recently so what's the team size look like today how many folks uh it's not a huge team it's about 40 people four zero yep how many engineers are you an engineer no i'm not i i do kind of talk and i know some coding we have about one fourth of the people are you know engineers okay got it so call it ten of them are engineers how many sales reps uh at the moment we do have uh well we have sdrs and account executives so it's the total theme size is about 10 to 12 at the moment how many of them are like actual aes that carry a quota uh six six so you have one sdr for one ae that's the ratio yeah and and you're the guy to ask this because your sales enable and software what quota do you set these six people at i'm sorry could you repeat what quota do you give these six sales people with um yeah it's it depends on of course if the ae is junior or senior uh and when when he started but uh i would say the average is about uh 150 000 to annual that's what they have to sell or that's what their on target earnings are uh that's kind of the minimum minimum target so they need to sell 150 000 of new ar each year yeah depending on of course if they're junior or senior and if if you're a senior it's about 300. okay but let's just do senior at 300. that you know a lot of aes are paid like hundred thousand dollar bases and then when they hit their million dollar quota for the year they get another hundred grand on top of that so they make 200k all in ote you usually want a 51 ratio there so if you hold your 300k quota divided by five that means engineering that that means their full entire earning salary base plus commission is like around seventy thousand dollars i bet you paid people more than that yeah yeah it's a it's a kind of a you have to remember that uh shovel is a finnish company so we are based in finland and because of the call we did a big change in our strategy so we kind of concentrated all our people in finland so the seller is not that high as it would be for example in the west coast usa god i mean but now we're in a remote world it also doesn't matter where you live if you're a good aea someone in san francisco can hire you and pay you 200 tickets a year you know exactly yeah so how do you retain your best people when you're competing in a global marketplace now how they not get picked off um well we do have most of the people uh you know placed in finland right now so it's about more about also the location what offices so you know we have the world's best healthcare world's best you know education system you know okay the tax rate is quite high but then again you get you know good services nature clean air everything so for us it's more about the location there now are you burning capital say or are you profitable uh we are slightly burning at the moment but we are going to do what does slight burn mean i'm talking five grand a month 30 grand a month yeah it's about five grand a month okay so are you planning to raise right now or are you going to stay with just a million we are actually planning to raise the next round which rates uh seven to 10 million and why is seven and 10 million the right number it's it's right number because we want to go full ahead with uh kind of two kind of arrows or heads so we we first of all we want to use the uh do the sales net growth and we also want to do the broccoli growth so we do need you know to hire new uh sales people but we also have to hire new engineers and uh really you know get the product itself into shape where it can sell itself which churn churn is really slow uh low at the moment so it's about three point uh five and unclear and i know that's very low yeah and you have more expansion revenue than that um no do you upsell customers more than the three point five percent so your number yeah yeah yeah yeah sure yeah yeah so it's nrr is about 112 at the moment well congrats that means you're expanding accounts by 16 14 or four percent are turning so that is 112 that's great do you know what you're painfully waiting to get a new customer your cac yeah uh that's quite high it's about one and a half times not annual uh income so we're talking about you know 20 000 at the moment why is it so expensive um well you know we have been growing quite rapidly now so i'm talking about you know the cac uh since last six months so we have hired you know new people uh new tools like you know we start to use outreach for example lan and many other tools so you know the expenses have i've also you know grown a lot now great story here sammy let's wrap up with the famous five number one what's your favorite book um i have to say that it's it's not a kind of typical business book it's the you know story of steve jobs yep number two is there a ceo you're following or studying i'm following quite many ceos and i have to say that you know i'm you know watching really closely for example the show but ceo peter chan bj and um but i i i can't say any any particular you know ceo that i like the most or what's the most number three what's your favorite online tool for building showel uh i would say hubspot is our you know number one tool number four how many hours of sleep did you get every night i try to get seven to eight okay i think i get it what's your situation married single kids uh not single not married so between not married and how are you and any kids or no yeah i have two kids two kids how are you how old you how old are you i i'm 42 42 last question what's something you wish you knew when you were 20. um i i i kind of wish that i would have been maybe more you know bolder in my my you know actions and moves guys they launched an agency back in 2011 they ended branch a million dollar agency before in 2012 launching a sas product that sas product today passed a million dollar run rate in 2019 when they raised a million dollar round on a six million dollar valuation now today they're at three point two million dollars in ar looking to raise a seven ten million dollar round on a 30 to 50 million valuation they have 300 customers basically break even right now 40 people on the team 10 engineers we will see what happens next they are competing in a very hot space shawl's in the company sales enablement software sammy thanks for taking us to the top thanks for having me and have a nice day 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 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