TerminusDB Revenue, Valuation & Funding (2024)

hey folks my guest today is luke feeney he's the co-founder of terminus db the leading open source graph database before joining the business uh 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 born ready yeah your cool factor went up a ton over the past decade you went from politician to sas founder yeah well that depends on your perspective man that's an accurate statement all right tell us tell us about terminus where'd you get the idea so dermis is spin out from university we were my brother was a researcher a phd researcher in in computer science and trinity and they had a idea around building a very collaborative sort of data structure database and 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 a machine readable format so people can do kind of predictive analytics on history and so trying to look at the past and then get long journey trends into the future so one of the big ones was the rise of political violence in the united states uh recently so um 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 trend pretty well now he 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 you say academic spin out most people they poo poo on academic experience because usually 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 spin out how much equity does that university still own yeah so 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 percent so we we had a negotiation we got them down to about four percent that's about two percent 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 development as well a little bit here and there so so i think it's a good deal all round interesting okay that sounds like a great mix so so the university's on the cap table on day one you're on the cap table on day one i think who else your brother yeah so there's three founders my brother and another phd researcher uh who spun out a guy called gavin mendel gleason he's the cto we took a seed round directly out of university out at a bridge from a bridge fund so it's specifically designed for softer terms for what year was that it's called the university bridge fund no what year was that oh that year was 2018 sorry sorry 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 so how much did you raise in that round we raised 1.25 got it okay and when you say like fluffy terms so 1.25 seed in the u.s usually you're going to see that like a 6 to 10 million cap on a convertible note is that kind of what you got no no no i mean fluffy for uh for for ireland i'm afraid i find our feces aren't as enlightened as yours i see i see okay so what were the just generic high level terms in 1.251 so it's about like it's about evaluation by 3.5 of that or maybe a little bit more than that post money or free yeah that's pretty yeah so not too bad you know yeah i mean you're selling 20 20 20 of business about exactly so we were happy enough with that given what we've seen elsewhere in europe and um you know our valuations and back then valuations weren't quite as heavy as they are now um yeah and certainly european valuations are a significant discount to to us oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 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 founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to 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 not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation 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 all right let's jump back into the interview you 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 are paying you right now to use the technology 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 so when you say bottom on blue are you talking like average customer average software developer paying like 20 30 bucks a month sort of deal yeah yeah exactly i see and then trying to expand it into more seats expanded into more usage paper usage models then so at what point like you know i've interviewed maybe dozens is an accurate statement of founders that decide to go bottoms up and the biggest pain point i've heard that 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 payment expense if i had this problem others other problems how do you think about that yeah it is a big problem and and how do you join that all together i mean it's kind of a nice problem to have because it's a growing pain it shows the child it's very relevant across the organization rather than just relevant to an individual so like we 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 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 going with that strategy so we shifted to open source and bottom up just to try and um 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 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 need it and how many software developers are paying you today for the platform 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 wait that's a ton 700 developers are paying you for the technology right now 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 that's still great okay so when do they have to upgrade how much do you weigh for free what's the utility metric they hit where they go i gotta go start paying 20 bucks a month um so it's the number of people uh using a team so basically hit three on the team and then you got to go up to uh pay i see interesting okay it's like a it's like a little bit of a slack model there yeah okay so just to repeat um you said you've got seven seven hundred thousand downloads of the open source platform 700 folks using you actively of which 350 are paying yeah wow how did you this cell model i mean you look at sit at get lab and there's a couple other companies right now that started on top of open source projects then commercialize you know they contribute back to the open source project to keep the community healthy and robust do you have to spend a lot of time thinking about not pissing off the community as you commercialize and charge for stuff oh really um i mean we're fully open source now so basically 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 so 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 cloud doing all that devops work when i can just get this endpoint and get the exact same results anyway people are very used to that sort of you know process so it doesn't really it's not like we're competing one of the other it's a choice that people can make i mean i think maybe if we get a bit bigger and we start layering on more enterprise features that could become an issue but again it's a it's a nice problem to have yeah of course now can i back into your revenue 350 customers 20 bucks a month you're doing about seven can mrr today yeah something like that okay and if you're there around there today where were you about a year ago so you can calculate growth yeah well that's an interesting one because we we're a little bit higher than 7k because we have a bunch of enterprise customers on top of that as well and so we do some individual enterprise installations some of them are hangover from our past direct enterprise sales so um you know we were about 10k and now we're about 20k so we've done about 100 that's great growth yeah that's great growth um very interesting okay now now fill out the funding story for us so you did the 1.25 precede at a 3.5 free you have you raised more since then or no yeah so we did a seed then with voter ventures in the lead they're a dutch vc um and we raised about 3.5 total uh valuation of about 10 pre 10 10.5 okay got it so just to be sorry just to repeat that back to you raise 1.25 you raised 3.5 total today so you did 2 million on a 10 pre recently no we did a further 3.5 oh another 3.5 got it on it on a 10 pre right so that okay good so you're selling i mean you're selling what is that uh 15 ish percent 10 of the business fifteen percent yeah yeah that's not horrible okay so that's why i said the university never comfortable though as you know never comes 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 the open source metrics to support you know the next get lab sort of story you know you go for it you know it's managing dilution's a tough thing yeah it really is and 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 that's exactly right if you try and you know if you try and go too hard for revenue too early it's you're just never going to get to the bigger dream that's right yeah and so much of it is a personal decision of the founders i mean i mean tons of founders that could go for the big thing but they don't take the time to raise capital they're already doing three million a year with one million profits and they pay themselves all the profits so like that's a pretty good life you know yeah yeah but you're you're playing the fundraising game though fairly well right i mean if you're doing 20 grand a month right now on revenue what is that that's you know 240 a year so what you're i mean you guys got a pretty healthy multiple there 14 posts yeah yeah yeah i think i think we're doing okay i mean we we will be looking to raise a big chunk of more if we're going to grow the business in the way that we want to and what do you think you have to hit revenue-wise before you do a formal series a well that's a really good question you know because we would be more if you said to me i could get an extra thousand developers up on the platform building really interesting things versus another 100k uh 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 um applications that they're then selling on and and i think that's when you know you get into that series a can i just show potential for um 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 uh which one of those were we're really pushing as the metric for the series a round and my hope is that i'd be saying you know 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 ten thousand people even if only ten percent of them hit real value we're going to be you know huge how many individuals yeah how many i'm trying to quantify that how many individual developers contribute at least one line of code in the past three days so in the open source so we we we not that many now that doesn't so so it's it's as a data platform that people are really contributing so 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 back-end for whatever they're building i see how many folks are full-time on the team today 12 13. and how many engineers uh almost all engineers so there's 11 engineers oh wow and you're in double and out of curiosity what's this what's the senior developer going for these days in dublin 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 striper paying 350k for mid-range engineers i 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 you know you're you're shopping in a different market in a sense because you are talking 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 and really as long as you can pay enough so you know paying 100k that sort of thing and then uh you can do it luke on that note let's wrap up here with the famous five number one what's your favorite business book uh my favorite business book is um crossing the chasm that's a good one number two is there a ceo you're following or studying yes there is a ceo that i'm following or studying i i suppose i'd say i'll say bill gates okay fair enough number two is uh what's your favorite online tool for building terminus oh our favorite online tool for building terminus is uh well we use notion a lot okay fair number four how many hours of sleep to eat every night i get eight errors i'm sorry did you get more did you get more sleep as a politician or more sleep as a software founder software because i i because i started to read about everybody's obsession with sleep and realize that i should be getting more that's hysterical i have four kids as well nathan so eight hours is amazing wow okay that's what's gonna ask you so four k so you're married with four kids yeah and how old are you i'm 42 four wow okay last question something you wish you knew when you were 20. something i wish i knew as twenty jesus so much the share price of apple [Laughter] guys there you have it luke feeney with terminus db politician turned sas founder they launched back in call 2018 with a 1.25 million dollar seed round of 3.5 free money valuation they've since grown revenue from 10 000 bucks a month about a year go to 20 000 bucks 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 350 are paying 20 bucks a month on average just throws a 3.5 seed round at a 10.5 free money evaluation 13 on the team over there in dublin as they look to continue to scale luke thanks for taking us to the top cheers one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 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