Snaplogic Revenue, Valuation & Funding (2023)

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is help on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka when I do webinar interviews or I give big speeches to thousands of people all over the world I usually will talk about data and sometimes show my dashboards like my SAS dashboard as I'm growing my SAS company the top inbox or my website dashboard which shows how I take Impressions to convert them into email leads and convert them into customers for Nathan la.com the funny thing is guys I build these dashboards with myself no developer and it's basically free and I use one tool to do it you can see the tool at Nathan la.com analytics I'll tell you more later in the show this is episode 16 52 and coming up tomorrow morning we have Maria on she invests $120 million into Financial technology companies if you're a female and you want to see more female Founders and smart women in our world you don't want to miss Maria her company's put through 39 graduates so far and accepting 6 to8 new per year with the New York partnership fund good morning everybody my guest this morning is grav Dylan he's an early investor in a company called Snap logic he joined us CEO in 2009 when he saw the potential to transform how companies integrate applications data and devices for digital business he spearheaded snap logic's rapid growth and overseas its strategy products and operations he was previously the co-founder and CEO of Informatica gra are you ready to take us to the top I'm on it all right let's let's have some fun so first things first I want to understand the trans transition from Informatica to snap logic so what happened at Attica why' you leave Yeah so basically look I uh built that my I would wouldn't say I we in particular my co-founder and I built that up from a garage we had a $75,000 SBA Grant um that we used and then raised Venture Capital to build that into a market leader in the data warehousing and ETL space how much total did you raise we raised $13.5 million got it those were different times it was uh the world for the internet um and it was uh it was uh just um just a uh wonderful time for two for me as a 27y old chief executive uh but it was a lot of working Sundays you know it was 12 odd years of working Sundays took it public uh in 1999 uh was uh then ran it for another 5 years couple of busts 99 bust the 2003 bust 911 and it was 11 12 years is is a long time it's time to go and I think also fundamentally uh this is getting long- winded here but my strategy was to go build new products and you know in a in that kind of public environment there wasn't an appetite for risk there was more of an appetite to harvest earnings per share and so on so it you know it was time for me to move on uh in hindsight I was probably crisp year or two before I did move on be a capitalist a cold-hearted capitalist with me for a second you personally wanting to get your own wealth out of Informatica you deserved it you worked hard to build it how did you extract money for yourself from this did you sell your shares back how' you do that yeah so look I am not a coldhearted capitalist I'm a company builder for me wealth is a byproduct and uh you know it's uh it's just who I am you build something great there's enough for everybody so how did we do it so first of all when when I did the IPO I was able to sell some of my shares at after the IPO in a secondary which is a very good way there was no lock uh no because in the secondary process you registered with the SEC for a secondary sale of shares and some of those Shares are sold to uh uh the some of the proceeds go to the company and some of the proceeds go back to the selling shareholders which were some venture capitalist I took a portion of my uh my shareholding and sold it but it's an open in public view there's a book you build a book uh thanks to uh Charles Phillips and some of the people in Morgan Stanley some of frankot tron's Team here in uh Silicon Valley we did a $480 million secondary of most of the proceeds went to the company but what was what was the primary what you raise in the initial public offering you know I think it was less than 100 it's so uh yeah and so and that's the way to do it that's our Tablo did which which shares some Finance board members with my old company and so on really the secondary was four times as much as the initial huh yeah if you do well that's the right way to do it interesting uh look because the IPO you're also trying to build a brand for yourself nobody knows you as a company or as an executive so if you do a modest IPO you're going to price it so there's wealth uh for the new buyers and as they do well they get a sense you do a couple good quarters and you have the right momentum and then uh they're very much more confident of buying a bigger chunk and at that point you can price it more efficiently instead of trying to do it all in one go and I I certainly feel that was good policy so take us through the exit here how when did you what year did you leave the business in and then how did you get involved with SNAP logic yeah so I left in July 2004 um and for one year I did nothing uh I had certain bucket list items I wanted to learn a language so I learned Spanish I wanted to uh travel in certain parts of the world want to spend some time with my parents before they got too old I did that and uh I also wanted to win the bet that many of my friends made with me that I wouldn't last more than six months so I basically left the country and moov to Argentina I'm like win this I got to get out silicon you you had no internet connection so you were going to win that bet no matter what I was going to win that bat by moving far far away and uh and so I did anyway so uh so how did I get here so basically what I did after Informatica as you can imagine after the time off came back to the valley and then boom it begins right you know someone who knows someone who has an idea and uh many ideas came up I joined a couple of boards I was on a board with then what became our investors in recent horowits I was on a board with them couple other not sort of pro bono type of board things people had helped me and it was time to help others and from that uh I was in a board meeting and you know it became pretty clear that this uh business internet we called it I'm ashamed to admit about 10 odd years ago uh which we now called cloud computing is going to be a big deal you know uh people aren't just going to buy books on the web they're going to balance their books on the web and uh and as that became clear it became clear to me that there was an opportunity for integration 20 no scre up sorry I was going to take you through so 2009 you joined officially kind of a CEO when was the company launch though how long had it been around before you joined yeah so the company actually I put the capital into I would say a science project in about 2006 from my pro bono work on various boards uh and I said to these guys the first couple five six people I wrote him a check and said guys if there's a business here prove it to me and if it is we'll go get the capital for it what was the risk you took what was the check size the initial check was a million dollars okay got it and and was still The Honorable amount to launch something with sure was that part of an Angel round uh no it was I would say well how do we do it you know we structured that as convertible debt because i' been negotia with myself how do I set the valuation that's got to be one of the first first convertible notes really obviously everyone does them now yeah it was a very early one y and I had very good advice from uh my attorneys at Morrison and Forester who had also been attorneys for me at Informatica and at Bea and other companies and they're fantastic guys and they said look how would you set the valuation I'm like that's true why don't you do a convertible note and uh convert that at the first outside money that comes in and in the meantime your Capital goes in as debt and then you convert and that's exactly what we did got and then fast forward to today and then we'll go back to more of the story how much Capital total have you guys raised you know we've raised 136 million okay um and uh it's been in successive rounds uh initially Venture within rent Horowitz and then ignition uh who've done very well with Splunk and they understand machine data from that investment and fabulous return and then most recently we brought in V truvian Partners who are a global growth Equity Firm uh headquartered in London opening an office in Silicon Valley so they led the most recent round and that was the $40 million Series F in December that's correct and what is the okay so now let's kind of dig into from a product perspective all the product people listening will get excited about this so so try to explain to us what does SNAP logic do and and what do your customers pay you for right so look what we are seeing is essentially a rocky do movie right so what was Rocky one for me was in the mid90s people are getting rid of main frames to Bringing In what we now call client server technology okay so what did we do we built companies like Informatica to hook up those products with each other and with the Legacy that existed prior it was a very good run for us and we all grew very well Sap's become a monster company we got informatic at over billion in Revenue ultimately sold for $5.7 billion so so what we're doing as snap logic in a sense is similar we are connecting the new Cloud applications to what is now Legacy which were the new applications 20 years ago right so so it's it's it's in a sense Rocky too and look I'm not alone right if you think about work day what is that is Dave and an Neil kind of doing their second act they did the same thing in client server they're doing it in the cloud now what we're doing as snap logic is expanding out the product set who provides all provide all kinds of connections not just ETL like we did at Informatica but also realtime ones uh to provide app integration in addition to data integration from a single platform and and that is we think just wonderful because we are writing in the wake of the cloud so G you're probably going to hate this analogy so I'm going to ask for forgiveness beforehand and then say it anyway uh is this basically an unsex version of zapier but way more important because so much of this old infrastructure still permeates the the software industry you know I would take that maybe and say I don't dislike it you know I think if you look at if and zapier they're consumer Place yeah um and there have been companies like bump whove tried to do certain kinds of things and you can get a lot of millions of people using it but uh you know I haven't seen them be able to be big companies and we saw that in the past with uh a variety of uh companies trying to do screen scraping technology in the 90s and so on and they're still around they get to couple million and they hang around they get they get millions of users but they don't get millions of dollars so so I would take that and say yes that is the problem at every strata of business what they're solving at if in zapier is at the personal level how do I you know I I use if for example to shop for I'm giving the secret away I shop for used Leica cameras on Craigslist and I have an if trigger that goes off somebody lists a like a camera on Craig list perfect usage you can use appier in the same way but if you're trying to connect your workday human Capital management system with your sap Financial system and you're a big multi-billion dollar business whether you're Adobe in Hightech or astroica in Pharmaceuticals or you are um someone in the uh in the food business like Denny's or Subway well you know what you probably need something like Snap logic yep so yes I would say we're the industrial version makes good sense of some of these toys out there and uh you know we do a pretty good job on the industrial end of it makes makes good sense all right and what is the walk I don't want to get into every cohort of customer you have but is this a SAS model it's a baz model that's correct platform kind of platform as of service so but in general monthly a true Cloud product a true Cloud product it runs there's always a cloud element to it and then you have varying degrees depending on your data gravity if you have a lot of on Prem data then you have a big what we call Ground Plex a lot of snap logic it's like Google Chrome there's some piece running here some piece running in the cloud so that partitioning balloons up on here and there's less in the cloud and so what's the average G take me back to your customer stuff here so what's what's the average customer would you say paying you per month or per year about 136 per year okay $13 $36,000 that's kind of your ACV yes okay got it I want to make sure it's $136,000 yeah not we'd be in trouble we'd be in trouble if it was $136 okay $136,000 annual contract value that makes good sense and then um when you're measuring I mean this is a big business I how many employees you guys have we're right about 250 although by the time this podcast is over it could be 2 262 I don't know let's hope and I want and I want 10% commission cheerfully cheerfully and that's just just throw me a bone all right so 250 folks uh I imagine with $136,000 ACV you're looking at seven figure ltvs correct you know probably more than that I mean what we saw in my old company was some of the larger companies were eight figures y um and it's you know so we we've got many customers in seven figures already for anom uh and it's just a start because what and here's a way to think about it you can always do S8 figure value if you can provide more than that to the buyer of it you know as a business person you can always buy that what you can sell yep what is the the reason I asked the question about LTV is I assume you guys have a a pretty significant kind of inside Salesforce and and that bring me to the question of CAG so what are you willing to acquire a new customer yeah you know it's it's it's modest we don't sell inside we have inside uh qualification people uh sdrs we call them um they're basically someone says Hey contact me I'd like to see a demo typically an SDR takes that call makes sure it's in the Target segment lines it up with the right sales rep and then the sales rep then engages what's your ratio of sdrs to sales reps it's you know depending on the territory one is to one or one is to two Okay in some of the newer places it's more one is one uh as we're expanding aggressively in Europe and Australia so that's more one is to one which is what we were in the US two years ago but it's one is to do now and how many of the 250 total employees are sdrs boy you know less than 20 okay got it that's good to know so less than 20 so so what are you I mean as a CEO that's kind of driving this business and your Prof forers your your Excel sheets Etc I mean what are you willing to spend on CAC knowing what your other economics look like you know I'm willing to spend what gives me I would say the incremental operating leverage this is uh probably the one Financial term I know I study electric engineering not Finance you Sak you to I am very you to sneak that term in somewhere in this 15-minute interview right my finance committee made me what the hell does that mean what does that mean it's actually straightforward right uh and and we look at it as uh as some of the ratios in SAS you're looking for a way look if you spend money today on sales and marketing at what point does your leverage flip over if you put in say a million dollars in sales of marketing today is that going to produce more than a million or less than a million in next quarter right so so we basically think about and the reality is there are diminishing returns at some point so we are willing with a capital that we've raised and and you know frankly we're not a hype company we're a buzz company customers love us I'm you know what we we are now getting deals where it's we've been in business for a couple years we have hundreds of customers all over the globe all the way from you know sort of a through z is that would you say that's like like 500 700 give us the general range about 700 about 700 okay 750 actually okay so 750 the who who it's the who's who it's stuff like you know McKenzie and Verizon and you know people like Denny's and you know Bristol Mar squib and it's the who's who but the point is if you're in business for a couple of years inevitably in it there's turnover you know what we're getting so many people calling us on their new job and saying hey man come in here how do we get this in here y you know that to me that combination of having a breakthrough product a transformational product at a time when cloud is just exploding all over is is the magic moment for us so so really when it comes down to CAC Etc I'm willing to spend into that demand but I am not willing to lean over skis to the point where we jeopardize and bet too much on the future let me let me let me try and pour some concrete around that uh you're more interested in what I'm willing to spend whatever it takes but the payback period that's really what you're talking about you have to get your cash back in the first four months no I wouldn't say four months but I would say we're willing to invest as long as our we're looking at incremental growth linked to that investment in a good way you know um four months might be too short that might be just the initial value but if I'm looking at say a large company I don't know pick somebody we don't have which is getting harder um I don't know who should we pick on um hang on running down my list a we don't have City bank yet okay so what does City Bank have well they have 50,000 developers uh of which about 10,000 people or a couple thousand maybe close to 10 do ETL jobs how much we spend yeah extract transform load which is sort of an integration for data right how yeah I was going to say using comparables what are they worth to you you know if you think about it fully loaded what is the cost of a human being in New York and then some of stuff is offshore so Blended rate $550,000 a year per person let's say it's 5,000 well that's 155 that's 75 million year is what they're spending yeah y you're taking five grand times the 50,000 employees I'm taking 150,000 times five grand and 75 right and then if my zeros are correct that's 75 million a year and that's one company okay so so if I can come in and show them how those guys could go faster or they don't need that many the truth is data is exploding so they're going to need all those guys they can just get a lot more done with the same guy I'm the reason I'm digging here is because so many I think it's totally wrong for SAS Founders to focus so exclusively on LTV to CAC ratio what's more important is the speed of LTV in other words if your lifetime value in terms of months is seven years you can't spend onethird of LTV on CAC because it takes you too long to get the money back that's correct yeah correct so you nail right it's payback period thank you thank you there's advantages to being older and one of those is I've seen a few bubbles go bust right you're way smarter smarter than us that's it but but no not always but the flip side of that is you don't want to be too conservative right because the early market share you get is the best market share always y right it it's so much harder for Amazon to exp expand into brail today or set up operations in India because there are people there so they have to go deal with them first right so so this is where that that business metric comes in so so look you know when we were starting Informatica this is coming on 25 years Bob auster who was a CFO of Oracle he was some of the people who put money into Oracle uh also funded uh business objects and Informatica with the same people and that taught me a lot and here's a simple simple rubric here it is if you do try to do six figure deals and try to have more customers than employees there you go there you have it few last questions go ahead yeah you know you're right few last quick questions here just before we wrap up um uh I'm doing the math 750 customers you know minimum of call it 136,000 ACV or your average you guys are well to the what nine figures in AR now right now not all of them are direct customers some of them are oems as well okay so we have to we we're not going to break it up as easily um because look in a private company atmosphere you want to um you know sort of obey some of the uh The Quiet Things That you have to be before you're ready to really disclose your MERS give me a huge range that lets you stay vague enough and the reason I asked the nine figureure number I mean in today's day and age when I talked to you know the folks at sauce Labs I just had on that raised about as much as you guys have they talk about getting into the you have to be really in the nine figure range between 100 million and 150 million to really think about going public have you guys broke that nine figure AR rate or no no okay got it but close maybe you know I like what we're trending so here's what I can tell you I love gr I love you this is great look if you deal with Wall Street investors this is nothing he's got a big smile on his face how can I get around this dude no but but let me let me give you a feel for it right a company that can double its Revenue as we have done for years and will continue to do four years to come has nothing to fear you'll be fine you know no doubt we're burning through a modest amount of cash we've raised about half of what the average SAS company does to an IPO half you know now I'm a little embarrassed that it's 10 times more than I raised the first time around but that was Perpetual it was in the last century you know things are more expensive now certainly engineering talent and so on but that said what we're doing is building a robust business which no doubt is growing aggressively but also has a feat on the ground you know a good stance like I told you guys at the top of this episode I have amazing data and you guys know from my interview style I love data but what I have more than data is making it actionable via beautiful dashboards that I can view on my phone on my TVs and my living room or even on my laptop as I'm traveling and the company that I use to create these dashboards which pulls in data from my lips in back end my Google analytics backend Salesforce and other data sources is called clipfolio you can see an example executive dashboard or my social media Command Center or my web metrics dashboard at Nathan la.com analytics that's Nathan la.com SL analytics and you can try it there for free for 3 months it's clipfolio you can try it free for 3 months everybody else has to pay so you get it free for 3 months Allan's a good friend he's a CEO of the company he came on the show I said I love your product can I feature it so Nathan la.com analytics go check it out now very good all right let's wrap up here with the famous five Groove these are like this is like cake compared to these other questions okay okay number one what's your favorite Business book I would say the Power of Habit number what people think is business book but I love it number two go ahead you want to expand on that one no that's okay okay number two is there a CEO you're following or studying right now Andy Grove I still read his books that's my second book I outut management he's a good one rest in PE he's the man yeah missed missed lost a good one there uh number three is there a favorite online tool you have like a QD scheduling you know I would say uh probably just Gmail I I like what they do it's it's it's it's probably my favorite thing right now I'm looking for if somebody wants a big check uh for us to uh buy something I'm looking for the modern equivalent of seven habits how do you do quadrant to time management and planning it's really missing we have a lot of to-do lists a lot of noise we need more signal in our scheduling and in our strap planning because look money we can make or lose time we can never buy so I'm actually in the market for something so let me throw it out there interesting that's good I bet you'll actually to get calls or tweets from that that's good number four how many hours of sleep do you get every night you know seven is a good night the average is uh I would say between five and a half is my wife listening to this no hopefully not hope not um I'd say probably close rounds up to six just to make sure I can uh keep peace at home uh but uh but boy seven is a good night and what's your situation obviously you're married any kiddos two kids two kids two wonderful girls you know uh 16 and N they amazing yeah they're amazing and how old are you you know I just eared 50 oh congratulations last that's a that's a big one that's a big one all right last question gr take us back 30 years what do he was your 20-year-old self neww you know I would say I wish he knew more that opportunity knock softly you know we get so busy solving problems sometimes we don't allow the time and space to listen for that opportunity that soft knock that's probably the one thing I would say to myself you know listen better I love knock softly yeah there you guys have it from Groove Dylan took over jumped in wrote a early check betting on some Founders in 2006 put in a million said show me this is a real business 2009 he liked what he saw joined a CEO they raised about $136 million uh company is called Snap logic they've bought and they're helping out 750 true Enterprise customers you're talking you know $130,000 acvs here helping 750 customers really wire all of their uh just human res everything online right anything that's connecting any data streams Etc anything like that right an Enterprise version of zaper and some of these other tools at a much larger scale they've got over 250 folks spread around the world 20 of them are kind of are in the SDR uh SDR kind of role again 750 customers paying on average call it you know about 10 grand per month leading to about 7ish million in mrr he won't confirm or deny that but I'm is doing the maap groove thank you for taking us to the top my pleasure thank you for having me if you enjoyed today's episode go back and listen to G with pull yesterday piple indexes 3.5 billion people so you can quickly access and get anybody's contact data it would mean the world to me if you guys got any value from this episode if you would go leave a review on iTunes right now and then subscribe you know I hustle like heck to get these episodes out every freaking day for you guys and trust me I love it I would do it with no listeners but boy oh boy it makes my day and it makes my team's day when we see great reviews and get your feedback so thanks so much okay top tribe I love giving away free money I feel like o we're giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the free $100 from Google right when you sign up with my website poost provider HostGator go sign up now to get your free money hostgator.com Nathan again that's hostgator.com Nathan