How Strayos CEO Ravi Sahu grew to $10M revenue and 22 customers in 2024.

hello everybody my guest today is ravi sayu he's a founder and he is the founder and ceo of a company called strayos before founding the company he spent more than 12 years working globally with fortune 500 companies like att verizon british telecom and various other roles from product management to building teams for large digital projects his area of expertise in artificial intelligence and data analytics drove him to launch streos which is essentially a tool that helps with 3d visual intelligence platforming and mapping using ai and drones to reduce cost and improve efficiency in mining job sites robbie are you ready to take us to the top absolutely okay to the top so streos is it a first off is it a sas company is that how you bill yes okay enterprise software as a service company and you sell directly to the mining operators or the sites well we sell directly to the mining operators or anybody who is servicing uh in the mine so either a driller drilling oems or somebody who is doing the blasting in the mining sites interesting okay and on average what do they pay for a year for this tech it's a 50 000 system uh per year okay that's a good average starting point yeah well okay so that's the starting point what's the average would you say across your customer base uh average if uh usually in this uh type of workflows we uh we have to have four or five stakeholders drillers blasters query manager and someone who is doing the compliance so at least the typical system looks like a five or six uh subscriptions uh so that's a you know average starting point but if they have about 40 or 50 people working in the same mining site everybody needs to sign up okay so so how make that clear for me the average customers may be paying are you saying 250 grand per year no average customer of one license cost about you know a thousand dollars so five uh stakeholders they'll be paying five thousand dollars per year per uh per month and then you know usually it costs you know fifty thousand to sixty thousand dollars as a starting point okay so base 50 grand plus additional user licenses have caught 50 to 60 grand on top of that so about a hundred grand is a fair average yeah okay interesting okay uh tell us more your story here when did you launch a company what year uh so we launched the company back in uh 2016 about mid-2016 at that point of time we had just the initial prototype that didn't do anything for the users and uh we launched the actual product the first version in july 2017. and who's we how many team members um uh so uh we started with uh you know just initial team members with one of my uh partner who comes from the mining and blasting industry uh so we were you know two or three team members were there and then later we expanded the team uh late uh so how many today two were twenty baby onboarded uh you know key executive team uh members and then also you know couple machine learning uh so robbie how many today total uh we are 11 uh team members 11. that's great and then fast forwards over the past two years how many customers have you signed up uh so we have uh about 40 enterprise customers at the moment yeah okay that's great i mean can i kind of back into revenue then 40 customers paying an average ac of 100 grand means you're doing about 300 400 grand a month right now is that about right uh not necessarily because everybody's ticket size is like different uh so we're roughly in about and not everybody is kind of at the paying moment because the sales anchors are very long to get to the contractual part uh which is basically it's usually six months so some are um some are still kind of in building mode we have about uh paying customers how many 22. 22. okay so can i take same map 22 times the acv you're doing about 180 grand a month yep and where were you a year ago in terms of uh in terms of a monthly recurring revenue in november 2017. oh we were zero but you're pre-revenue at that point yeah oh that's great how did you sign up 22 people so fast at those contract values uh so mostly we sell through distributors uh so we have distributors we have existing relationships in this mining organizations are to their network dealer network uh those who have are already present in the sites so most of the selling that happens uh through the distributor network uh and then we take on to the uh director uh you know customer success as well as onboarding part and then you know taking them into our entire product journey and have you raised capital or are you guys bootstrapped uh we we raised a precede round back in 2017. so how much total have you raised today yeah it's about uh 650k 650 thousand bucks and that was a convertible note or equity or debt or what don't worry about oh great very good well congrats there talk to me about about stickiness have you lost any customers uh yeah it's too early to say but you know we have not lost any customer yet uh and the reason is because like i mentioned the longer the sales cycle is you know it takes a lot of time to get them comfortable and they want more they invest in the on the time a time period where they're constantly using it so they are not only testing the product but also you know they're getting the accurate data from it so uh the timing is the key part so we've not lost the customer yet except just one churn we have is mostly because you know in their site they were not allowed to use drones because it was very close to the uh faa uh compliance or you know airport area sure that's the only one churn that we have but other than that uh got it are you spending any money on sales and marketing uh uh it's mostly on the field sales side with no uh money on the marketing we did some content marketing how many people on the field sales team uh just one at the moment okay so one person has closed all 22 accounts uh no it's kind of you know we recently onboarded him so uh all 22 accounts uh it's uh it's a combination of through the distributors as well as uh you know me going and meeting them personally the field sales guy will recently hire so what kickback do you pay the distributors if they bring you a customer uh usually it's 20 commission okay got it so yours basically your customer acquisition cost is twenty percent of first year acv correct yeah okay so a hundred thousand dollar account you'd spend about twenty thousand bucks to acquire that customer oh interesting okay and only in year one or do you keep paying the distributor every single year uh the renewals are five percent oh that's smart they're not spending money on the uh they're not spending any time in kind of keeping that uh relation there usually then falls back to us yeah that's smart and uh where's the team based uh so we're in st louis and also we have team members uh the development team in india as well that's great in bangalore st louis and uh and india and then we didn't spend a ton of time on the tech so tell me how this actually works a drone flies over the job site and maps all the tunnels underground i mean what's the value there what do they do yeah so we are we are not we're not doing anything underground yet um so typically in the mining or any uh aggregate or query industry if you see you know you need to build highways you need to build roads and what you first the first thing you need is materials right and when we think about mining we usually think about you know metals or any other you know precise metals you know in the mind but my this is an activity that happens on a daily basis which is uh drilling and blasting so you you drill holes and you blast material and you're basically you know generating material rocks but the current process which they used is very uh tedious and unsafe so you're using a laser scanner putting in different areas and walking around the high walls and the cliffs so what we are replacing that with is with drones a low-cost drones as well as the drone flies in 10 minutes capture the data and we have an automated processing engine which turns them into 3d models so now we are generating a report about the geometry of the terrain and the geotechnical attributes so now they can make accurate decisions about where to drill holes how deeper it needs to be what's the diameter should be and then how much amount of explosives is required to blast it so that the accurate energy distribution would be there and the accurate size of rock will come out that has a downstream effect about the supply chain of transportation of this material because if you have an accurate balance size rock you're not spending more money on breaking those rocks into a crushing plant uh and that's all get distributed to any other job site of your you know if you're building highways or if you're building uh you know houses you know you need those material interesting are you planning right now and raising any additional capital particularly computer vision and machine learning platform which basically uh gives them the ability to make accurate drilling and blasting design decisions so ravi are you planning right now on on raising any additional capital uh yes uh so we are we are looking for kind of you know really mostly on growing the customer base uh so that's where kind of focusing more on the growth side so yes we will be uh raising an additional capital uh how much do you hope to raise uh roughly about 1.5 million so that's another like cd round uh mostly focus on the growth side and and if you raise 1.5 million what are you targeting in terms of a pre-money valuation [Music] uh so that's number kind of you know still uh we have not come to the conclusion yet what would make you happy right now depending upon the revenue numbers that we are trying to hit we will be looking into seven to eight million dollar valuation and then once we hit uh some more revenue numbers it will be uh the range of you know 10 10 to 12. yeah have you ever looked i mean obviously it sounds like you want to go raise equity capital but you take dilution on that have you ever looked at using like venture debt to fund some of the growth so you don't get diluted uh we have not uh we've not looked at the venture debt uh as a model yet uh especially because uh we don't have you know really good understanding about you know and uh the part that we are looking is some uh strategic fit so someone coming from this industry and uh where we can expand the business you know more focused way yeah would you raise venture debt if you like the terms and understood how it worked and they didn't you know didn't have to take dilution we might consider but i think at this stage of the business we it's mostly about you know accelerating the growth and we don't see venture debt as a tool for us to propel the growth is that because you don't know how to spend money to make more money uh it's mostly about we're looking for an investor not just coming from the money perspective but also a network as well as uh some if you're raising money from somebody from the heavy industries or the oem uh focus investors you know that will uh propel our boat ten times then venture debt is just the money for us you know uh and uh how do we manage that effectively yeah so that's kind of welcome all right let's wrap up with the famous five one word answers if you can number one what's your favorite business book uh so i uh recently read a book uh called the autobiography of uh it's not a business autobiography of a yogi uh not a business book uh but i learned a lot of business kind of you know i digested like a lot of business elements from there good number two is there a ceo you're following or studying uh ceo again um uh right now uh one of the ceo that i use it's uh slack ceo so he stuart butterfield let's do it but i feel great number three what's your favorite online tool for building your company a favorite online tool so we use uh zoom a lot okay that's a good one zoom number four how many hours of sleep to get every night so usually i get about six hours i'm trying to increase it more uh i have a you know young year uh young baby as well so one kid and are you married yes and how old are you uh i just turned 34. 34. last question what do you wish your 20 year old self knew i think take it um take it a little bit slow uh mostly because you know um once you are in twenties you uh your mind kind of races into different direction and uh you don't know what uh so it's kind of you know taking it like a little bit slow about you know what uh what's the future you want to build and what's the impact you want to have rather than just kind of you know jumping into it guys take it slow from strayos they sell again drone ai technology to drilling oems folks in the blasting industry anything related to mines they've got 22 customers today paying about 100 000 acv so doing about 180 grand per month right now they were pre-revenue a year ago so healthy growth quickly they've been efficient with the capital they've raised 650 grand is what they've raised so far too early to talk about churn and things like that however they are spending about 20 000 bucks to get that hundred thousand dollar acv account and that's a kickback to a distributor who's driving a bunch of their sales uh they've got about 11 people right now based in st louis and india again founded in 2016 uh looking for hopefully a strategic investor soon where they want to hope to raise 1.5 million bucks on maybe a eight or nine million pre-money evaluations robbie thank you for taking us to the top thank you nathan