Tapclicks Revenue & Funding (2024)

hello everyone my guest today is he is the ceo silicon valley veteran of technology and marketing solutions he's an angel investor entrepreneur and fortune 500 executive and is now building his company called tap clicks he's got a bse from the sjsu and is an alumni of harvard business school babak are you ready to take us to the top i sure am all right tap clicks last time you were on was about oh february 2018 you said you had about 3 000 customers 100 employees uh where are you guys at today how you doing things are looking really good so we're now at about 5 000 agencies and media companies using our platform to service millions of smbs and national advertisers and we're approximately 250 people 250 people and those are those are 5000 those are actual paying customers not like you know free or okay and you said 250 team yes all still san jose no we're all over the world now so our main areas are san jose uh boston montreal nashville and then we got teams now in india as well as latin america very good and for people that missed our first interview together help them understand what the company does well really at the core of the business we help large and medium-sized agencies and media companies manage all their marketing data and operations with a platform that offers io workflow analytics and reporting that's really what we do as a product line these companies get incredible efficiencies through using us they can service their customers really really well by offering basically storyboarding how their campaigns are doing for them managing all that big data unifying it visualizing it and reporting it so that anytime anywhere somebody wants to see that data at their level they can see it through our reporting solutions or analytics dashboards and arpu's still around 300 bucks a customer per month well you know as you know we have different types of customers and on average on the middle to high end we're looking at 2 000 a month and then it goes all the way down to hundreds of hundred hundreds of dollars per month yeah i mean what do you think of fair averages across the entire base three four hundred no it's probably higher it's more like uh 900 to a thousand bucks okay okay so fair i mean that that's triple what it was you know two years ago so you've driven some expansion revenue it sounds like new product lines yes we're we're really excited about our new product lines that you know what we call the marketing operations platform is taken off very nicely both in the large customer base and media medium-sized agencies we're seeing growth in the number of agencies and it's all of it is getting traction we've introduced new products in in the area of marketing as well such as seo serve site auditing etc so it's it's really becoming a full platform right now now when i take 900 bucks a month times those 5 000 customers i mean that puts you at like 4.5 million a month right now in revenue is it accurate uh no it's lower than that so i i think i i made a the numbers too high then on the average side so okay so so how many but it is 5 000 customers yes okay and so and our poo would be closer i mean if you're doing 400 bucks a month on average that would put you i mean what is that 400 times five thousand two million bucks a month yeah you're closer yeah okay got i mean have you got have you guys broken two million a month at this point no no no do you think it'll happen in the next month or two we're expecting to do 20 million arr uh in in q2 we expect to hit that in this quarter so it's a little lower actually okay so just to be clear 20 million in terms of runaway would be 1.6 million a month you're hoping to break that kind of this quarter so what are you at today one and a half one and a half okay so that would be yeah that would be a 300 rpoo 300 bucks times 5 000 customers puts you about 1.5 today yeah and that is that is from a growth rate perspective uh you know you were doing about 1.1 in mr last time you were on so so does that sound about right to you uh yeah i think when we talked last time it was about 1.1 yeah it was so again that was around december of 2017 as when that would have been um so what is i mean what has growth been year over year would you say my view on the growth on the um on the revenue side i feel like we were doing when we talked about 10 million in revenue and we we closed the year at 15. uh in terms of in terms of cash collected or run rate cash collector okay and so december 2018 which would have been four or five months ago you were doing what about 1.2 1.3 a month that's right okay got it that means you only would have added like 200 000 in new bookings in terms of mrr uh last i mean all last year is that right no no no i don't think so so i think we added um we've added about the number 1.1 was really from feb i believe and i i'm not as quick as you're doing that math but i would say i want to say that we've gone from a million to million and a half okay okay got it for over uh that would have been uh over what period of time about 12 to 13 months got it and you're at 1.5 today hoping to break 1.6 here in the next uh two or three months yes that's good um let's get off the numbers here for a second let's talk strategy so so growing the company right what has been your kind of growth channel to go from you know again you have 3000 customers 18 months ago now you're at 5 000 where have you gotten them it's a combination of uh just organic growth and i think we discussed we had some acquisitions along the way that has really helped our growth as well okay tell me about one of those did you do an acquisition last year we did yes come on back don't let me pull out of you what was the company why'd you do it it hasn't been announced so i can't announce it right now but we do do an acquisition recently we did do one that's in the area of uh mobile uh reporting as well as collaboration tools i'm really excited i want to share that with you but i can't okay how much how much have you raised today we have done 10 million of venture debt last year about a year ago and uh we had some seed funding as well from some angel investors yeah you told me last time we had five million raised in equities so you have 15 million raised total when you add the equity plus venture debt throughout the history of the company that's correct yeah why do i mean how are we able to lock down 10 million of venture debt i mean that's that is a little i mean that is way more than what most people will do the usually it's a per it's like you know anywhere between four and maybe three and six x of your mrr 10 million and you're doing 1.3 i mean that's almost like call it 10x your mrr uh it's yes probably somewhere around there i would say that in general the our partner really believes in our vision and our strategy and what's going on with the company wait why the hell does that matter venture debt doesn't care what your vision or strategy is there's no equity upside for them they just care a little bit these guys are a little bit different they're they're like a hybrid model of venture debt and equity so i i wouldn't put him into that who who is it who is it boathouse capital okay so do they take warrants and covenants and things that's right oh okay so yes they do yes they do that's right got it got it got it now that was on that was on the back i think obviously uh with sas capital as well right yeah so we we already took care of that one so sas capital is no longer our partner i do want to say they're a great company to work with okay so that was the 3 million you took back in april of 2017. you're saying you already paid that all back off that's right i see okay and they did not okay and the 10 million was just from boathouse that's correct have you seen i mean you're you're rare in that you have chosen to hold on to equity and go this kind of venture debt route which by the way i don't think it's a good or bad thing i actually like it i like that you're holding on more of the company um any downside you've seen by doing that anybody any been any temptation to just say screw it let's just go raise equity not anything like that i'm saying i think the the package that they offer from a hybrid model is very very attractive to a company like ours it does really reduce dilution and i think i view it as lower cost equity really the way it's structured uh i do believe that as the company is growing and we have very high hopes now we're at 5 000 we got the right amount of people to have that momentum so we're going to continue our growth and i think we're going to be looking at about 7 000 agencies and media companies by the end of the year and much much higher growth rates so when you look at that then you start thinking about okay the next round is going to be large and it's going to be equity yeah are you burning capital today in terms of profitability are you at break even just a little bit like a little bit as like 100 grand or like a 5 million no no it's like 100 100 and where is most that going head count yeah the majority of our expenses had count that's where it's at yeah um churn is critical as you know in any kind of sas company especially the world you're in where these folks can be finicky sometimes last time you were on we didn't dive deep into this so i want to do it now i mean what does your churn look like your revenue turn annually look like we're net revenue positive and our turn is looking really good right now it just keeps getting better so we're at less than one percent uh on the uh logo churn okay when you look at all of 2018 gross revenue churn before you add back expansion was about what all of 2018 gross revenue churn as you said i mean if it was about one percent a month it'd be about 12 percent yeah you can that that was our logo turn i would say that gross revenue churn would be somewhere around there okay and no upselling revenue accounted for right now now now let's add back expansion revenue so what percentage how much would you expand those cohorts in terms of upsells i would say it's about the same okay so you turn 12 but from the same customers you up saw another 12 so your net revenue retention is about 100 that's right you're looking at a zero trend essentially on revenue net net churn yeah um and then talk to me about getting these new customers you said a lot of it's organic and inbound but what's your fully weighted cac today in terms of getting a new 300 a month customer it's really low the majority of it comes from uh just inbound leads people doing organic searches we're not spending much on the low end of the product line it's all basically organic traffic that's coming in so i would say it's extremely low i don't have an exact number but i mean look at you you said you have 250 people on the team right that's right how many of them are sales people are customer success you're looking at about 10 sales for people and the majority are on the enterprise side okay yeah i mean so those are obviously that those are 10 salaries you're in california people can do math and assume what those salaries might be i mean there's potentially a million plus just there so i mean do you know what your full weighted calc is uh for the interpret it's i'm not going to say that number right now i mean first off that's usually not something people hold close to the vest it's not usually proprietary do you just not know it yeah i i wouldn't say i don't know the exact number right now and i don't want to quote it and the reason is this we have gone into a new model of enterprise versus mid-range versus self-serve products and each one of them has a different cac i would say that they're very low they're extraordinarily low on all sides the 10 people that you mentioned are well but sorry back i'm going to cut you off but like saying low cac is actually not a great way to measure cac right cac is usually measured as a ratio and it's usually a payback period and usually it's the same no matter what the cohort is you know usually it's like a 14 to 24 month payback depending if it's small business mid-market or enterprise it doesn't matter which one it is the ratio is still the same right so my question to you is are you optimizing for a certain payback period 14 16 18 24 months oh on the on the enterprise side we're looking at about a six-month ratio months is not a ratio so what do you mean a six-month ratio being able to collect the money that we spend to win that customer within six months we'd like to record that in six months and uh in in historically it's been much lower than that because it's all referrals for the most part from one large company to another on the low end it's also very low as far as i'm concerned the cost of acquiring the customer is low because it's all organic traffic sure that costs money though right or you know content going out doesn't just magically appear you have to have content writers and you have to then quantify that right so uh okay six month payback period makes a lot of sense um really using ventures have to hold on to the equity that's great um any plans to raise additional capital any plans to raise additional capital here and in the near future yeah like to we've got we'd like to go look at another round of 10 to 20 by within the next year okay equity or debt i'm sorry equity or debt it's going to be equity okay and what do you think you'll be able to raise that you know let's say you raised 20 million bucks what do you think what do you hope to raise that in terms of valuation uh i'd rather not say that because that's really a negotiation and you know there's all kinds of different metrics these guys have i rather have that discussion with the with the bankers well that's why i'm asking not what are your terms but what is a valuation that you would hope to be able to get to uh you would hope that you're uh over 100 million okay so you would like to sell less than 20 of the company right so pre free money call it 80 post money 100. yes okay and you think okay good i mean you know your space better than i do you think at your current run rate you're doing about 18 million bucks uh in are you thinking you can probably get there i mean that's i mean that's actually pretty conservative that's like a four or five x yeah i i do believe we can easily get there and i'm being conservative but it really depends on the market at the time where we go for the raise as you know yeah uh it's you know what are the multiples for sas companies right now they're really good uh we'll see how it keeps going yeah that's good and blah blah i forgot to give this to me when you launch company what year we launched really in january of 2010 was our first stab at it i would say the actual tactics came together really in 20 january of 2015. very good let's wrap up here with the famous five number one what's your favorite business book it's uh made to stick number two is there a ceo you're following are studying right now there's a couple of them that are like there are newcomers uh the uh dora from uber and satsang gurudev from into it number three is there a favorite online tool you have for building your company a favorite online tool uh for building the company right now i'm leaning toward linkedin number four how many hours of sleep to get every night you know you you didn't believe me last time i'm looking at three to five right now it's actually done a little longer and what's your situation married single kids married with three kids and how are you i am 53 last question what do you wish your 20 year old self knew uh 20 year old self would have known better the power of the value of great talent and teaming up with that talent would be number one and the second one is you know the the value of networking guys tap clicks he as uh just about to pass 20 million bucks in ar feeling a lot of his growth based off venture debt 10 million recently raised with boathouse it's a combo of obviously debt plus equity 250 people on the team today six month payback period on their acquisition channels churning 12 percent of their revenue but adding that back so 100 net revenue retention team of 250 people burning about 150 000 per month right now nice growth called 30 year-over-year going from about one to one point five million ish uh in mrr as they look to continue to scale past five thousand customers but thank you for taking us to the top thank you for your time