TerminusDB Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Luke Feeney. He's the cofounder of terminusdb, the leading open source graph database. Before joining the business, Luke worked in the Irish foreign ministry for a number of years. He was Ireland's acting ambassador to Greece from 2016 to 2017. Luke, you ready to take us to the top? [00:15] >> Born ready. [00:16] Now your cool factor went up a ton over the past decade. You went from politician to SaaS founder. [00:21] >> Well, that depends on your perspective, man. [00:25] That's an accurate statement. Alright. Tell us tell us about terminus. Where'd you get the idea? [00:30] >> So terminus is a spinout from university. We were my brother was a researcher, a PhD researcher in computer science in Trinity, and they had a idea around building a very collaborative sort of data structure database and spun out from there. It kind of came from this very big project called the Global History Data Bank, which is trying to record all of the social and political data sets from all of human history and then provide them in [00:58] >> a machine readable format so people can do kind of predictive analytics on history. Interesting. So trying to look at the past and then get long jure trends into the future. So one of the big ones was the rise of political violence in The United States recently. So the Academic Lead made a prediction back in 2010 that there'd be a big uptick in political violence in The United States in 2020, 2021. So he kind of caught that [01:23] >> trend pretty well. Now, didn't call the pandemic, but he was able to pick that stuff out from well structured, large data that you're able to run machine analytics on. And so when [01:34] you say academic spinout, most people, they pooh pooh on academic spinouts because usually the university keeps a ridiculously high percentage relative to the value they're going to add to the company over the years. So, how did you manage the spinout? How much equity does the university still own? [01:45] >> Yeah, so it's like and that's a big problem in Europe as compared to The United States. So, Stanford, for example, has gone very progressive on that. So they let them spin out and then expect them to give the money back just in terms of like, you know, you're a billion dollar company, give us a few million there for an endowment, whereas Europeans are much more, let's get our 10%. So we had a negotiation. We got them [02:08] >> down to about 4%. About 2% now. That's fine. They still create value for us. We talk about our link to them. We run events on Trinity. You know, they're a big center of innovation. They help us in some international business developments as well, little bit here and there. So I think it's a good deal all around. Interesting. Okay, that sounds like a great mix. [02:29] So the university is on the cap table on day one. You're on the cap table on day one, I think. Who else? Your brother? [02:36] >> Yeah. So there's three founders, my brother and another PhD researcher who spun out, a guy called Gavin Mendel-Gleason, and he's the CTO. We took a seed round directly at a university at a bridge from a bridge fund. So it's specifically designed for softer terms for companies it's trying to called the University Bridge Fund. [02:56] No. What year was that? [02:57] >> Oh, that year was 2018. Sorry. Sorry, Nathan. Yeah, 2018. So, yeah, so they're like it's like softer terms to try and get companies to spin out. So the Irish government backs it with a bunch of other institutions. It's professionally managed by a VC called Atlantic Bridge, and they look for companies mostly, I'd say, in the med tech world, but also [03:16] how much how much did you raise in that round? [03:18] >> We raised 1.25. [03:20] Got it. Okay. And when you say like fluffy term, so 1.25 seed in The U. S, usually you're going sit at like a 6 to 10,000,000 cap on a convertible note. Is that kind what you got? [03:28] >> No. No. No. I mean, fluffy for for for Ireland. I'm afraid. I see. I see. [03:37] Okay. So what were the just generic high level terms in one point two five one one? [03:40] >> So it's about like it's about evaluation by 3.5 of that or maybe a little bit more than that. [03:45] Post money or pre? [03:47] >> Yeah. That's pre. Yeah. So not not too bad. You know? [03:49] Yeah. I mean, that way, you're selling 20% of business about. [03:52] >> Exactly. So we were happy enough with that, given what we've seen elsewhere in Europe and, you know, our valuations and back then valuations weren't quite as heavy as they are now. And yeah, and certainly European valuations are a significant discount to to U. S. [04:08] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:32] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:56] get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is [05:18] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired, the valuation and the multiple. Maybe you're [05:44] going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if [06:06] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the [06:32] interview. You've raised some more, but before we get your full funding story, let's take a step back just for a second. Tell me about the customers. Who who are you paying you right now to use the technology? [06:40] >> So we're focused on software developers. Like, we are developer tooling. So we're trying to go bottom up, we're trying to attract software engineers to use it to bring it into businesses, and there's a real range of different sorts of software engineers working in, you know, martech, ad tech, working in research, working in a bunch of different areas like that, but it's very, very much a bottom up strategy. [07:05] So when you say bottom up, Luke, are you talking like average customer, average software developer paying like $20 to $30 bucks a month sort of deal? [07:10] >> Yeah. Yeah. [07:11] Exactly. I see. [07:12] >> And then try and expand it into more seats, expand it into more usage, pay per usage models then. [07:18] So at what point, like You know, I've interviewed maybe dozens is an accurate statement of of founders that decide to go bottoms up. And the biggest pain point I've heard, this surprises a lot of people, is the moment when there's four or five people in one organization that are personally paying for the software and you want to move it to one company credit card that the CTO is buying a seven seat license for. That's the hardest [07:39] expense if I had this problem. Others have a problem. How do you think about that? [07:44] >> Yeah, it is a big problem. And how do you join that altogether? I mean, it's kind of a nice problem to have because it's a growing pain. It shows that you're going relevant across the organization rather than just relevant to an individual. So like we try and do a sandwich strategy then. So then start approaching the CTO to say what the value is and then try and bring it through as being a more enterprise sale at [08:08] >> that point. Like when we came out of university first, we were very much an enterprise sort of company. We tried to do large scale graph installations to solve big enterprise problems like, you know, predicting how many how much stock you need to have in your physical warehouse. So we have enterprise sales chops. We just felt that it was going too slow. We weren't going to be able to get the growth targets that we were looking for [08:31] >> going with that strategy. So we shifted to open source and bottom up just to try and give us that that potential runway to grow to be something really big rather than what was becoming a kind of consultancy, you know, case by case. And so we can do the enterprise sales and we can prove our value top down. We just needed the engineers to start using it to show the management, you know, why they should why they [08:56] >> need it. [08:57] And how many software developers are paying you today for the platform? [09:01] >> So we have about 700 people up on the cloud version, but we have about 700,000 downloads of our open source version as well. [09:08] That's Wait. A ton. 700 developers are paying you for the technology right now. [09:12] >> Well, paying or, you know, a small amount. Some of them are paying. I'd say about 50% of those are paying customers and about 50% are on the free tier in the cloud. [09:21] That's still great. Okay. So when do they have to upgrade? How much do you give away for free? What's the utility metric they hit where they go? I got to go start paying $20 a month. [09:29] >> So it's the number of people using a team. So they basically hit three on the team and then you got to go up to pay. [09:37] I see. Interesting. Okay. [09:38] >> It's like a it's like a little bit of a Slack model there. [09:43] Yeah. Okay. So just to repeat, you said you've got seven seven hundred thousand downloads of the open source platform, 700 folks using you actively, of which three fifty are paying. Yeah. Wow. How did you this whole model, I mean, you look at Citic, GitLab, and there's a couple other companies right now that started on top of open source projects then commercialized. They contribute back to the open source project to keep the community healthy and robust. Do [10:07] you have to spend a lot of time thinking about not pissing off the community as you commercialize and charge for stuff? [10:13] >> Not really. I mean, we're fully open source now. So basically, we we we sell a hosted version of the open source software. We don't have enterprise features that aren't available in the open source right now. Really, it's a matter of convenience for software developers. So it's usually like, hey, I'm already working for a big company. They're willing to pay for for software. Why would I go about, you know, containerizing a Docker, getting it up in the [10:39] >> cloud, doing all that DevOps work when I can just get this endpoint and get the exact same results anyway? I see. People are very used to that sort of, you know, process, so it doesn't really it's not like we're competing one or the other. It's a choice that people can make. I mean, I think maybe if we get a bit bigger and we started layering on more enterprise features, that could become an issue. But again, it's [11:00] >> a it's a nice problem to have. [11:02] Yeah, of course. Now can I back into your revenue? 350 customers, $20 a month. You're doing about seven k MRR today? [11:09] >> Yeah. Something like that. Okay. [11:10] And if you're there around there today, where were you about a year ago so we can calculate growth? [11:15] >> Yeah, well, that's an interesting one because we're a little bit higher than seven k because we have a bunch of enterprise customers on top of that as well. So we do some individual enterprise installations, some of them are a hangover from our past direct enterprise sales. So, you know, we were about 10 ks and now we're about 20 ks, so we've done about 100% [11:39] That's great growth. Yeah, that's great growth. Very interesting. Okay. Now fill out the funding story for us. So you did the 1.25 pre seed at a 3.5 pre. Have you raised more since then or no? [11:50] >> Yeah. So we did a seed then with Volta Ventures in the lead. They're a Dutch VC, and we raised about 3.5 total. A valuation of about 10 pre. Ten, ten point five pre. [12:05] Okay. Got it. So just to be sorry, just to repeat that back to you, you raised 1.25, you raised 3.5 total to date, so you did 2,000,000 on a 10 pre recently. [12:13] >> No. We did a further 3.5. [12:14] Oh, another 3.5. Got it. [12:15] >> Yeah. On a on a 10 pre. Right. [12:17] That okay. Good. So you're selling mean, you're selling, what is that? 15 ish percent, 10% of the business? [12:23] >> 15%. Yep. [12:24] At 15%. Yeah. That's not horrible. Okay. So that's why I said the university. [12:27] >> Never comfortable though, as you know. Never comfortable. [12:29] I know. I mean, it's tough though. It's a balance. I mean, if you guys are gonna play a long term game, which it sounds like you've got the open source metrics to support, you know, the next GitLab sort of story, you know, you go for it. You know? It's managing dilution is a tough thing. [12:42] >> Yeah. It really is. And I I agree wholeheartedly with that. You're kind of you know, how ambitious can we be? How ambitious do you feel that you can be versus, oh my god, I just love some revenue because it would allow me not to sell so much of the business. [12:57] That's exactly right. [12:58] >> If you try and, you know, if you try and goes too hard for revenue too early, it's you're just never going to get to the bigger dream. [13:05] That's right. Yeah. And so much of it is a personal decision of the founder. I mean I mean, tons of founders that could go for the big thing, but they don't wanna take the time to raise capital. They're already doing 3,000,000 a year with 1,000,000 in profits, and they pay themselves all the profits. So, like, that's a pretty good life. You know? Yeah. Yeah. [13:20] >> It's tough balance. It's good life. [13:21] But you're you're playing the fundraising game, though, fairly well. Right? I mean, if you're doing $20k a month right now in revenue, what is that? That's, know, $240,000 a year. So what you're I mean, you guys got a pretty healthy multiple there through 14 post. [13:32] >> Yeah. Yeah. Yeah. Yeah. I think I think we're doing okay. I mean, we we will be looking to raise a big chunk more if we're gonna grow the business in the way that we want to. [13:41] What do you think you have to hit revenue wise before you do a formal series a? [13:45] >> Well, that that's a really good question, you know, because we're we'd be more if you said to me, I could get an extra thousand developers up on the platform building really interesting things versus another 100 k in revenue, I chose the thousand thousand developers building on the platform because it shows that it's got real life to grow. It shows that people are trying to build new and exciting applications that they're then selling on. And I think [14:10] >> that's when, you know, you get into that series A, can I just show potential for, you know, how much we could grow and how many people we have using the platform versus how much do I have to show that we've already done? Yeah. And that'll become a big question for us about which one of those we're we're really pushing as the metric for the series a round. And my hope is that I'd be saying, you know, [14:36] >> you know, it's it's it's it's a no brainer because we've got 10,000 people building on the platform. And those 10,000 people, even if only 10% of them hit real value, we're we're gonna be, you know, huge. [14:50] How many individual people Yeah. How many I'm trying to quantify that. How many individual developers contributed at least one line of code in the past thirty days? [15:00] >> So in the open source, we not that many. [15:03] Doesn't so [15:05] >> it's as a data platform that people are really contributing, they're hosting their data on the platform, they're using it, they're opening their databases on a minute by minute basis, hour by hour basis, they're building applications that are solving real business challenges out in the world, And that's really what we want to see is that they're using the platform as a backend for whatever they're building. [15:24] I see. How many folks are full time on the team today? [15:27] >> Twelve, thirteen. [15:28] And how many engineers? [15:31] >> Almost all engineers. So there's 11 [15:33] Oh, wow. And you're in Dublin. Out of curiosity, what's the what's the senior developer going for these days in in Dublin? [15:38] >> Yeah. Well, until you guys sent Stripe over to us, it was a lot cheaper. I mean, I I see on these boards on Reddit that Stripe are paying 350 k for mid range engineers. Mean, that's madness in Ireland. And so, you know, yeah, it's expensive, but you can definitely pick up real value out there as long as you're, you know, pick you know, you're you're shopping in a different market in a sense because you are talking [16:03] >> to people that want to do something more than just, you know, be a cubicle within meta. They want to give something back. They want to contribute to open source. They want to dream of a better future. And really, as long as you can pay enough, so, you know, paying 100 ks, that sort of thing, then you can do it. [16:25] Luke, on that note, let's wrap up here with the famous five. Number one, what's your favorite business book? [16:31] >> My favorite business book is [16:35] >> Crossing the Chasm. [16:37] That's a good one. Number two, is there a CEO you're following or studying? [16:42] >> Yes, there is a CEO that I'm following or studying. I I I suppose I'd say I'll say Bill Gates. [16:48] Okay. Fair enough. [16:49] >> Number two is that what's your favorite online tool for building terminus? [16:54] >> Oh, our favorite online tool for building terminus is well, we use Notion a lot. [16:59] Okay. Fair. Number four, how many hours of sleep do you get every night? [17:02] >> I get eight hours. I'm sorry. [17:05] Very good. Did you get more did you get more sleep as a politician or more sleep as a software founder? [17:09] >> Software. Because I I because I started to read about everybody's obsession with sleep and realized that I should be getting more. [17:14] That's hysterical. [17:15] >> I have four kids as well, Nathan. So eight hours is amazing. [17:19] Wow. Okay. That's what I was going to ask you. So four so you're married with four kids? [17:24] >> Yeah. [17:25] And how old are you? [17:26] >> I'm 42. [17:27] Four. Wow. Okay. Last question. Something you wish you knew when you were 20. [17:31] >> Something I wish I knew I was 20. Jesus, so much. The share price of Apple. [17:36] Guys, there we have it. Luke Feeney with terminusdb, politician turned SaaS founder. They launched back in, call it, 2018 with a $1,250,000 seed round of 3.5 pre money valuation. They've since grown revenue from $10,000 a month about a year ago to 20,000 a month today. A combination of bottoms up approach plus some enterprise deals. Over 700,000 downloads of their open source protocol, 700 actively using it, three fifty are paying $20 a month on average. Just raised [17:59] a 3.5 seed round at a 10.5 pre money valuation. 13 on the team over there in Dublin as they look to continue to scale. Luke, thanks for taking us to the top. [18:07] >> Cheers. [18:09] 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 alive. It is fun to watch every Thursday one [18:34] p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two p. M. Central. 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 [18:56] acquisition, a big 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 [19:17] are saying. Sign 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 and 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, but I do it so that we can all learn. We have to [19:37] counter those people. We got 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.