StockCrowd Revenue, Valuation & Funding (2024)

hello everybody my guest today is sergey pavares he is uh running a company called stock crowd which is a cloud-based software that turns the digital channels of an organization into a source of money sergi you ready to take us to the top yeah all right so tell us what this means what's the company do and how do you make money um yeah well basically um we do money as a sas company we are a cloud-based software so our customers are paying for a setup and are paying for a monthly fee and this is our business model and um what we are doing is that um probably you know about crowdfunding uh currently crowdfunding um runs in a in a platform that centralizes the projects and the investors so what we have in mind is to decentralize the crowdfunding we think that it makes sense that every company in the world could have a tool to run its own crowdfunding campaign from its own website wherever it's the type of the crowdfunding they can they can ask for donations they can why does this have to be decentralized why can't i just go use quick starter or kickstarter to do this um because if you are a well-known brand first you will not you will not like you will you don't want to compete in a in a marketplace with other brands second you will not share the data with the third-party company third does not make sense for a big brand to forward the online traffic to a third-party domain and fourth does not make sense to have different um different profiles in the different platforms depending on the type of the crowdfunding you would like to run it makes more sense to have your own tool and run the crowdfunding from your own website okay interesting how many how much money has been raised through your platform to date uh 35 million and how much over the past year uh 23. that's great how much last month uh last month in january we rise uh two and a half okay got it so so 23 last in the last year two and a half last month right 2008 it's been our year i would say it's been the year when we really uh grow up quite uh quite strongly how do you make money as i was saying at the at the beginning our customers are paying for a setup how much uh that depends on the type of a customer if you are an ngo or a non-profit organization you will pay you will pay us around 1 000 if you are a profit organization and you you would like to use our software to um to get investors or you are thinking about um lending or equity then the setup is about 3 000. and then the monthly fee uh depends on what you would like to do with the software you will have a monthly fee that starts in 250 and goes up to 1000. okay on average what are they paying per month uh we have more customers that paying 1 000 that more customers than paying 250. uh i would say the average is going to be something like 750 something like that and what's the difference between someone who pays you 200 verse a thousand um yeah for 2050 you can run simultaneously only one campaign uh and with 1000 you can run for example a campaign for donations for your social corporate social responsibility projects and you could run at the same time another project for uh rewards because you are you want to get the working capital for a new product and at the same time you can run an equity campaign and when and walk me through kind of the history of the company when did you guys launch um we launched in 2016 late 2016. and 16 you said 2016 2016 yeah correct and the thing is that late 2013 i i sold my previous startup i sold it to our uh partners in saudi arabia and uh i was the crowdfunding industry i i was an advisor of a crowdfunding campaign i was a crowdfunder investor so is when i saw that uh there was a real limitation for the for the system if we uh continue focusing in platforms what did you sell that first company for excuse me say it again what did you that first company that you sold your last company what did you sell it for uh you mean the amount yeah um it was around 16 million us dollars one six or six zero one six okay and so did you sell did you use that capital to sell fund this new business or if you raise capital partially uh i use part of my capital but we we raise capital as well okay in stock crowd we we rise one million just to start up the company apart from from me and mike and the other co-founder and part for the rest of the investors and recently we raised almost four million euros to start the international expansion so about five and a half million usd total raised that's correct that's great and and how aggressive are you being in terms of team how many folks today um today we are uh 23 people half of them are engineers software engineers the rest are divided in customer success sales and marketing that's very good when where's your one base barcelona yeah we have an office the headquarters in barcelona we also have an office in in indonesia we have an office in manila um that is where where our main investor came from and we have another another office in madrid barcelona and a remote that's great and so over the past what i guess you let's see launch 2016 so over the past two three years how many customers have you scaled to uh we have currently 120 customers and sergey how do you i mean crowdfunding is usually like a one-time event and then it stops which obviously isn't good for a sas model because then they they churn and your turn goes through the roof so how do you make sure people stay sticky when they're not running a campaign yeah most of our customers are running uh continuously campaign because for example if you focus in in a corporate social responsibility project this is a this is a yearly project and and they are running one campaign after the other uh if you are thinking about uh lending uh most of our customers they continue having they they continuously have uh um needs to raise money for their projects so they are they are running new campaigns and then you have to consider one thing once the campaign is over the customer still needs the software because the software is the communication tool with the investors interesting okay so so with that in mind if people are sticking around it sounds like you have 120 today um can i take 120 times 700 you guys are doing about a million bucks in ar right now oh sorry because i started single yeah sergey no problem you have 120 customers at 700 bucks a month right now you're doing about a million bucks a year in terms of run rate right now i'll say it again please it's okay if you have 120 customers paying 700 bucks a month that means you're doing about 83 84 000 a month right now which is a million dollar run rate is that accurate um yeah that that's that's correct that's almost correct yeah okay what do you mean almost is a little bit a little bit lower or higher uh it's it's a little bit it's a little a little bit lower because that that depends on when the customer starts if a customer starts in in november then you make you multiply by 12 and that's not totally correct because that customer will pay you only two months so you've got to talk last month how much mrr did you have last month yeah last month we have an mrr nearly one thousand one hundred thousand okay um and where were you exactly a year ago in terms of monthly recurring revenue yeah in january last year we were in five thousand okay so again just to be clear something something doesn't sound right here you went from five thousand dollars a month in revenue a year ago to a hundred thousand dollars a month today correct okay so that's good growth where how did you sign up the first 10 customers um we had you mean when we had the first customer the first customer was in early 2017. you know how did you get your first customer uh how um as i would say that as as any startup in the world um using using uh context and using um um be really specific who was the first sign up and specifically how did you know them uh yes our first customer was a hospital in barcelona and we signed them because we know them because they they were they were very well known customer from our uh our uh our network okay what was the name of the company you cut out hospital it's a hospital in barcelona okay first hospital barcelona and how did you you said they're just in your network well that doesn't just magically happen how were they in your network uh because i i when i when i sold my company i decided to study uh a in in esa which is a business school and uh there in esa was in touch with uh with a teacher i explained to that teacher what i wanted to do and that was the teacher that was uh an advisor for that hospital to raise money for a new uh to renew uh refurbish uh one part of that hospital so the connection was through my business school very cool and the teacher introduced you yeah that's great okay so 23 people today five and a half million bucks raised how much are you burning or are you break even um well um last i would say january we are uh we went over the the break even the thing is that uh we are um we started to we started to run the plan for international expansion so so in february and march we will be far from our um break even because i understand that so i'm trying to understand how aggressive you're being so this month how much capital will you burn as you're investing in growth uh probably we'll burn one one um 150 000 and thank you it sounds like you're doing the conversion on the fly i appreciate that right okay so as you expand you'll probably be burning about 150 000 per month and your last round was when of funding uh it was before summer last year okay so almost coming up on a year and how much was it uh almost four million okay so that was really your first round after the million yeah yeah we burned the first million uh within a couple of years something like that okay very good okay so you're now investing in growth you're burning 150 grand a month but you've just raised four so you have you know 12 plus months of runway so you have time um how do you measure your churn and what is it today um it's quite low but uh we had to turn if customers are because our customers are paying for a 12 year 12-month contract and and since we start 2008 our turn is less than five percent five percent in revenue churn per month per year yeah and what's expansion revenue look like annually uh this year we have a budget of 2.2 million sorry so of the comp of the companies that signed up exactly a year ago you said five percent of the revenue from them will churn you'll also upsell them how much in terms of percentage will you upsell uh or do you not have or do you not do upsells no no we we do we do upsells because uh some customers start uh with with a basic uh price plan they try one campaign and then they want to to run another campaign simultaneously i want to they want to do more more things but uh i would say that um we don't have uh enough um enough information to let me ask it a different way does your does your expansion revenue from the group that sign up a year ago more than make up for the lost revenue from that group say it again please yeah this my my signal is quite poor but sorry it's okay if you churned five percent of your revenue from that you could sign up a year ago do the expansion revenue more than make up for that hole of course okay so you you're you're upselling customers by more than five percent annually so that's making up for the churn yeah but the thing is not it's not about the upselling is is about getting new customers i know but i don't want to i'm talking about churn cohorts not new customer growth okay i'm just talking about the group that signed up a year ago so five percent of their revenue churned and yeah you're adding back more than five percent so their net revenue retention is over a hundred percent yeah i would say yes okay got it obviously you're getting additional growth by adding brand new customers i'm talking about cohort cohort analysis though okay very good to me yeah yeah yeah now in terms of again you raise capital you're investing in growth so how aggressive are you being with customer acquisition so if someone's going to pay you 700 a month will you spend their whole first year of revenue to get them um currently we are uh we started uh uh last the last um [Music] last quarter of 2018 we started an inbound marketing strategy to generate quality content to uh start you know building the sales funnel so um we we are one of one customer uh paying 250 uh it's profitable for us after the six after six months okay so six months which means if they're paying you 700 bucks a month you're spending about 4 000 bucks to acquire the customer um yeah let's say yes because that depends on the things we do uh it's not the same if we don't have uh shows or or things and and if we for it's not the same if there is uh uh uh if we have to rent a booth in a show or if we just have to focus on digital marketing oh yeah but again generally speaking though a six month i mean people this is a number of people know they all have those same issues you just articulated but you right now have your payback period at about six months right okay correct yeah very good right all right uh let me ask you a question so you're doing caught a hundred grand a month right now or about a million two per year if someone came and offered you seven or eight million bucks to sell the company would you sell um i haven't honestly i haven't thought about that um um we i have we have a board so we first we have to think we have to talk with them but i would say that stock routes still have a very nice uh a nice path to to run and uh i think it's too early are you raising it are you raising capital right now no we are not but uh i would say we will we will have to do it meet next year okay so like q2 of 2020. right yeah very good all right let's wrap up sergey with the famous five number one what's your favorite business book uh the one from horror beach uh hard thing about hard thing right number two is there a ceo you're following or studying uh yes i am following the uh geco i am following um i am following as well with bill gates that is nobody's not a ceo anymore so yeah i would say the geco interesting number three what's your favorite online tool for building the company sorry again what's your what's your favorite tool for building your company hubspot number four how many hours of sleep do you get every night between five and six and what's your situation married single kids well sir what's your situation married single or kids married one kid and how old are you me yeah 45. 45. last question serkey what do you wish your 20 year old self knew what nice hurry what's something you wish you knew when you were 20. um to run my own company guys run your own company as early as you can he launched his company stock crowd which helps big companies crowdfund at scale and keep their own data on their platform he's doing a hundred grand a month right now in revenue up from five grand a month just a year ago the over 35 million bucks has been raised on his platform 2.5 million of that was just last month alone he's raised 5.5 million dollars burning 150 000 per month as he invests to scale with a team of 23 people in barcelona and remote locations net revenue retention over 100 six-month payback period currently sergey thank you for taking us to the top you are more than welcome thanks a lot