SpaceBasic Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Madhavi Shankar. She is building a very cool tool called spacebasic.com or spacebasic.com, digitizing student experience for universities. Alright. Madhavi, are ready to take us to the top? [00:12] >> Yes. [00:13] Alright. So what is spacebasic doing? Are you selling to the university or the student? [00:17] >> So we are a B2B SaaS platform. What we do at spacebasic is we digitize student campus housing communities. All of the tasks that happen on day to day basis is completely digitized. What we do from that data that we collect from the day to day tasks is we go ahead and kind of, with our analytics, turn that into useful information for universities and students. [00:44] Very cool. And we'll say happy Diwali, right? That's all the noise in the background. [00:48] >> Yes. You can hear a lot of crackers going off. It's Diwali here in India today. [00:53] I love that. I love that. Okay. Very cool. So got it. So you're you're I totally understand the use case here. Who's buying it, though? Is it the owner of the real estate that's housing or is it the college themselves? [01:03] >> So it is a platform. It's a B2B SaaS platform. We sell directly to the universities or independent student housing communities. So that's how. And once they onboard, then they go ahead and enroll their student population onto the platform. [01:20] I see, got it. Okay, taking you to the backstory here, like what are they paying you today to use the technology on average? [01:26] >> Right, so on an average, it depends. We charge between $4 to $9 per student per year, Since it's still, you know, that's the basic version, but like when we add the AI aspect of it, it kind of customizes. There's an enterprise pricing available as well. But that's the, you know, average ballpark of how a university would pay us here in India. [01:46] And how many like, when a university signs up, how many students are you just signing up for when they're from their first test? I mean, it's gotta be hundreds. Right? [01:54] >> Right. So, you know, at the moment, we work with about 65, 70 universities, about 150, 60,000 users in total, and that's our current user base. We want to kind of go 7x or 10x that next year post the COVID situation. But so far, that's what we've been able to achieve in terms of user base and universities that we work with. [02:23] So just to be clear, 70 paying universities and all of the students under those 70 add up to a 160,000? [02:31] >> All the users. So we have users. When I say users, what I mean is students, staff, educators, administrators, their parents, etcetera. So all of our users in total come up to about one fifty, one sixty thousand users. [02:45] How many paid seats do the seventy universities currently have on the platform? [02:49] >> We charge per student per year. Yep. Though we have different users using it, at the moment we just charge the students. And we are about around 55 to 60,000 students on the platform. [03:02] Wow. Okay. Amazing. So, I mean, can I take can I take 60,000 times $4 a seat? I mean, you're doing something like $200,000 a month in revenue? [03:10] >> Yes. That's right. A year. [03:12] That's amazing. Oh, a year or a month? Oh, a year. Got it. Yeah. Yeah. [03:16] >> Yeah. A year. So you yeah. There's a conversion with the local currency, so I've kind of turned that over. It comes up to 4 to $10 or 4 to $9 a year. [03:26] Well, this is great. So you're doing about $250,000 a year or about $20,000 per month, right? [03:32] >> That's correct. Yes. [03:33] Okay. This is a great story. Take me back to when did you launch this? When did you get your first customer? [03:38] >> So a bit of a backstory is I started my journey working for startups back when I was in Sydney, Australia. So I joined a product company there, one of the founding employees. Started really early, kind of really my love for startups began there. And learning from that in 2016, I met with my current co founder who's based out of the Bay Area, kind of met casually, then decided we want to start this back here in India [04:09] >> because digitization in terms of just student life outside of e learning was very minimal. So we kind of came back, did a lot of due diligence, and what we thought what we saw was the student housing segment was completely unstructured, very pen and paper driven, and that's why we started spacebasic. And we kind of did a pilot run end of twenty seventeen, but we actually went live with the product in quarter one, end of quarter one [04:42] >> in 2018. [04:44] 2018. Got it. So you've built and built and built. Is great. Have you bootstrapped the business or did you raise capital? [04:50] >> Bootstrapped the business. In 2020, we were cash flow breakeven, and we raised, you know, our first round of funding, you know, more of an angel round this year in May. [05:01] In May. Okay. How much did you raise? [05:04] >> So we raised a small amount. We have not disclosed the dollar amount for the funding amount. We raised a really small amount just so to build the technology platform and to kind of also scale up sales and marketing. But we plan to raise about a million, million and a half coming coming this year. [05:22] Madhavi, I wanna know the first I wanna know the first capital. This is an important part to your story. It's how you build your MVP. You hire your first people. I mean, are we talking like a $100,000 raised or 200 something like that? [05:32] >> We're talking between 250 k to a $500,000. [05:36] I see. I see. Got it. Okay. And what did the $250,000 enable you to do? Was it hires, marketing, something else? [05:42] >> Yes. The key areas where, you know, why we're just, 250 k to 500 k was for marketing, to get more feet on the street for sales, as well as to invest in technology. We really wanted to build out the AI part because we had all this data, but, we really wanted to turn that into valuable information. And that was one of the key kind of takeaways from this year's learning as well. And we plan to kind [06:13] >> of now expand to the entire university population and not [06:20] >> just the student housing segment. So we've learned a lot process this year. [06:26] And you mentioned, are you sorry, you're raising now or you're gonna raise next year? [06:30] >> Next year. So the plan is to raise next year. [06:32] I see. I see. Got it. Very cool. Okay. So $250,000 to $500,000 rate on a pre seed round. It's helping you guys to grow, make some hires. What's the team size today? How many people? [06:41] >> Today, we're about 15 on and off. That's our total team size. But if we take in our advisers and all of our, you know, consultants, we're a team of about 21 people. [06:52] How many just full time? [06:54] >> 15. [06:55] Oh, the 15 is the full time. Got it. How many of those are engineers? [06:59] >> So we're about six engineers. We have about seven sales marketing, and the rest are customer support. [07:09] Tell me more about the sales and marketing folks. They can't go and sell student by student, but I guess they can go sell university by university, right? [07:16] >> Right. That's right. So we sell directly to universities. Every university has an average ticket size of about 800 to 1,200 students. That's an average size. So what we do is we do mostly referral. Word-of-mouth works a lot, and we've also kind of directly reached out to customers. We've had some amount of inbound come in this year as well. But it's been a very kind of a still figuring out phase for sales and marketing, but we really [07:44] >> want to expand and be aggressive about that in 2022. [07:49] Mhmm. Oh, I love that. Now, it sounds like, again, growth is nice. You're doing about $20,000 a month in revenue today across 70 universities. Do you remember where you were exactly a year ago? [07:58] >> Yes. So, we have grown about 35% in terms of new customer acquisition. Also, here in India, the COVID second wave kind of gave us like about four, four and a half months of complete shutdown. Universities have started opening up now over the last one to two months. But regardless of that, we've still done about 35% of new customers'sales. And I feel like a lot of, in terms of existing student population, it's not 200% capacity because [08:30] >> of COVID. But I definitely see that increasing, you know, around now, which is enrollment time, October, November, December. [08:41] I see. So last year at this time, were doing about 13,000, 14,000 a month in revenue and you grew that 30% up to 20,000. Yeah. [08:48] >> Uh-huh. Right. So [08:49] During last COVID, pretty impressive. [08:52] >> Yeah. We actually broke even during COVID. I I I was surprised myself that, you know, that kind of happened, but we also pivoted a little bit. So I think that really helped us achieve that. [09:02] Tell me about the equity splits on the founding team. Do they split it equally or no? [09:07] >> So we we have, you know, we have ESOPs. We have since, you know, we are two co founders. It's not split equally, but it's kind of split in a way where there's some for investors, future investors, ESOPS, and the two founders. [09:25] How did you, when people set up their first ESOP pool, a lot lot of people don't even know what that means. Employee stock option pool, it's basically equity for you to recruit talent in the future. But everyone, there's no real art or science to how you set that up. How did you guys choose to set that up at the start? I mean, imagine you do that with a seed round and how big did you set aside? [09:40] 10%, 5%, something else? [09:43] >> You cut out. [09:45] >> Yeah. We cut out 10%. Again, you know, with ESOPs, the thing is we wanna kind of really we want, you know, employees who are really passionate about the product to or the company to really have that skin in the game and not just [10:01] >> have a conversation in terms of salary. We've seen ESOPs to be a great option. And I've personally seen that work with my previous organization as well. And I really wanted to bring that to spacebasic as well because I see, you know, that could be really helpful for people who are passionate about startups or at some point want to start their own later on. I think it gives a lot of learning. So personally, it was important to [10:25] >> me and I wanted to bring it here. [10:26] No, I think that's smart. 10% there. And then most founders'SaaS based, when they're doing their pre seed or seed rounds, are selling about 15% to 20% of the business. Were you guys in that same range? [10:36] >> No, we were not. We [10:40] >> were around 5% to 6% or less than But, [10:45] >> know, again, it was a very, as I said, it was a very small round and we want to kind of save up equity once we reach our major milestones so we get a better valuation when we raise the next round. [10:57] Yeah. I mean, raise you raised that 250,000 seat at a cap of, like, 5,000,000, something like that, five to 6% of the business. That's that's pretty impressive, actually. [11:05] >> Thank you. [11:06] How are you able to do that? You you guys were pretty early there there still in revenue. [11:11] >> Right. But, you know, what we also have is not just revenue, right? We have the potential revenue, our market size, our team, and all of those factors considering. So more of a it was more of an angel around which is you can look at it as a, you know, bridge note or not even a bridge note, what was the word? Safe note. You know so we didn't, that's what it was. It was more of a you [11:35] >> know early, safe note round, but we will convert that next year. You know, a proper fundraising round. [11:43] Very cool. How much are you targeting next year, you think? [11:47] >> You know, we're still yet to finalize on the math, but I'm thinking maybe a million or so is what we're looking to raise. [11:54] At what? A $10,000,000 to $20,000,000 valuation? [11:58] >> Well, you know, it'll be good to get a 10, but we'll have to see. [12:02] Yeah. Yeah. Very cool. Okay. Anything else we missed? Obviously, folks can check out the company at spacebasic.com. Anything else, Madhavi? [12:09] >> No. Well, thank you so much, Nathan. It was great chatting with you. [12:12] Let's wrap up here quickly with the famous five. Number one, favorite book? [12:19] >> Lean In. [12:20] Number two, is there a CEO you're following or studying? [12:23] >> Yes. I I I actually kind of read recently, you know, a book about Elon Musk, and I also read a book about Bill Gates and how he founded Microsoft. So that was pretty interesting. [12:33] Number three, what's your favorite online tool for building spacebasic? [12:38] >> You know, I use a lot of tools, but my favorite being Canva, super handy. And apart from Canva, I use also use a tool called Pitch for my presentation. So I've really gotten fond of that off late. [12:52] Number four, how many hours of sleep do get every night? [12:56] >> More than I used to before, but about six to seven these days. [12:59] Okay. And what's your situation, Madhavi? Married? Single? Kids? [13:03] >> Single. [13:04] Alright. No kids. And how old are you, if you don't mind me asking? [13:07] >> Sure. I'm 31. [13:09] >> 31. [13:10] Last question. Something you wish you knew when you were 20. [13:13] >> Oh my gosh. If I were 20, I wish I studied entrepreneurship as a course, you know, which was not even an option. You know, startup was not a buzzword when when I was studying. So I wish I wish I had exposure to that. I would have started off much sooner than I did. [13:28] Guys, spacebasic helps universities in India manage the student housing experience. They had $14,000 a month in revenue a year ago, doing $20,000 a month. Pretty impressive considering the second wave of COVID in India shut down most of these schools. 70 universities worked with them. They're now growing very quickly. 250,000 raised in their pre seed round, sold five or 6% of the business. Now looking to scale out to more students. Currently, have 60,000 students on the platform, [13:52] 160,000 users across those 70 universities. Madhavi, thanks for taking us to the top. [13:57] >> Thank you so much for having me. [14:00] One 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 [14:25] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [14:48] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign [15:09] up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, I do it so that we can all learn. We have to counter those people. We got [15:29] to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.