Founder Interview
How Arka 360 Grew from 50 to 380 Solar Installer Customers in One Year on $200K Raised (Interview with Siddharth Gangal)
- Interview Date
- January 20, 2021
- Interviewee
- Siddharth GangalCo-Founder
Company Metrics at Interview Time
Customers (2021)
380
Customers (prior year) (2020)
50
Seed Funding Raised
$200K
Team Size (2021)
20
Cheapest Plan (2021)
$70 per month
Historical Snapshot
These numbers were reported by Siddharth Gangal during the interview recorded in January 2021 and are a historical snapshot, not current figures. See Arka 360’s current numbers.
Key Takeaways
- 01380 solar installer customers as of January 2021, up from 50 a year earlier
- 02Founded in 2017 while Siddharth was a senior in college
- 03Raised a seed round of about $200K in 2018 and had roughly broken even month over month since
- 04Team of 20 people, including 9 engineers and 3 quota-carrying sales reps
- 05The cheapest plan was $70 per month, and the most expensive went up to $150 per month with add-ons
- 06Churn was about 25% a year
- 07Channel partners got 30% of the first-year revenue from each customer they introduced, then 5 to 10% in years two and three
- 08Customers in seven countries, with 95% of them in India
- 09Not yet actively fundraising, but looking to raise around $1M to $1.5M within six months, hoping for a valuation of around $6M
- 10CAC was about 35 to 40% of a customer's first-year revenue
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2021) | 380 | Founder interview, Jan 2021 |
| Customers (2020) | 50 | Founder interview, Jan 2021 |
| Seed Funding Raised | $200K | Founder interview, Jan 2021 |
| Year Founded | 2017 | Founder interview, Jan 2021 |
| Team Size (2021) | 20 | Founder interview, Jan 2021 |
| Engineers (2021) | 9 | Founder interview, Jan 2021 |
| Sales Reps (quota-carrying) (2021) | 3 | Founder interview, Jan 2021 |
| Cheapest Plan (2021) | $70 per month | Founder interview, Jan 2021 |
| Most Expensive Plan (with add-ons) (2021) | $150 per month | Founder interview, Jan 2021 |
| Annual Churn (2021) | 25% | Founder interview, Jan 2021 |
| Channel Partner Revenue Share (Year 1) (2021) | 30% | Founder interview, Jan 2021 |
| Channel Partner Revenue Share (Years 2 to 3) (2021) | 5 to 10% | Founder interview, Jan 2021 |
| Channel Partners (2021) | 2 | Founder interview, Jan 2021 |
| Countries with Customers (2021) | 7 | Founder interview, Jan 2021 |
| India Customer Concentration (2021) | 95% | Founder interview, Jan 2021 |
| Sales Rep Monthly Quota (2021) | $5,000 per month | Founder interview, Jan 2021 |
| CAC as % of First-Year Revenue (2021) | 35 to 40% | Founder interview, Jan 2021 |
| MRR at 50 Customers (2020) | $3,500 per month | Founder interview, Jan 2021 |
Growth Breakdown
Customers
The Solar Labs (now Arka 360) grew from around 50 customers at the start of 2020 to around 380 by January 2021, what Siddharth called a pretty steep growth rate. Cold calling and outbound took it to about 100 customers, and channel partnerships with solar manufacturers brought in the rest. The first five customers came from cold calls to a Google Maps list of solar installers in Delhi.
Team
The company had grown to a team of 20 people by January 2021, with 9 across engineering and 7 in business operations. Each of its three quota-carrying sales reps had a quota of $5,000 per month.
Funding and Profitability
The company raised a seed round of about $200K in 2018 and had roughly broken even month over month since then. At the interview it was not yet actively fundraising, but was looking to raise around $1M to $1.5M within six months, hoping for a valuation of around $6M, to fund marketing, international expansion and new products.
Revenue
At 50 customers a year prior, the company was generating approximately $3,500 per month. Churn was about 25% a year as of January 2021.
Growth Strategy
Cold Outreach to Scale Early
The founding team cold called solar installers found via Google Maps searches, starting in Delhi. This approach landed the first five customers within one month of launch and helped the company scale to around 100 customers.
Channel Partnerships with Solar Manufacturers
The company partnered with solar manufacturers who introduced the software to their dealer networks. Two channel partners were active as of January 2021. A partner got 30% of the first-year revenue from each customer it introduced, then 5 to 10% in years two and three.
Organic SEO and Content Marketing
Some of the marketing budget went to SEO and Google Ads, but Siddharth said most of the money went to content and longer-term initiatives.
Seat-Based and Feature Upsells
Upsell opportunities included selling additional seats to companies with more designers or engineers, and offering add-on features that could take a plan from $70 to $150 per month.
International Expansion
With customers in seven countries but 95% of them in India, Siddharth said the company would put around 50 to 60% of the planned raise into marketing and international expansion and around 40% into new products.
Best Quotes
“It's a subscription software for solar installers, which helps them design and engineer solar PV systems. So you can engineer how a solar system would go up on your rooftop, and it helps the installers create sales proposals that ultimately help them close deals.”
“So today we have around 380 solar installers using us.”
“So we just picked up a list on on Google Maps and, like, solar websites and just cold called.”
“So a year ago, we were approximately at around 50 customers. So we've had a pretty steep growth rate during 2020.”
“We raised a small seed round of about $200,000 back in 2018. And since then, we have sort of broken even month over month.”
“So we are a team of 20 people, around nine across engineering and around seven in business operations.”
“So our CAC is approximately... It's sort of a little hard to calculate. I would take it at about 35%, 35 to 40.”
“So some of our investment is on SEO ... and we actually spend most of our money on content and longer term initiatives.”
What Happened Next
At the time of this interview in January 2021, The Solar Labs (now Arka 360) had around 380 customers in seven countries, had raised a seed round of about $200,000 in 2018 and had roughly broken even month over month since. Siddharth Gangal said it was looking to raise around $1 million to $1.5 million within six months, hoping for a valuation of around $6 million, but was not yet actively fundraising. Visit the Arka 360 company profile on GetLatka for current figures.
View Arka 360’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Product Overview
- 0:26What the Software Does
- 0:47Pricing Plans
- 1:01Founding Story and Launch Year
- 1:12Current Customer Count
- 1:20How the First Customers Were Acquired
- 3:25Growth Rate and Year-Ago Comparison
- 3:55How They Grew During COVID
- 7:00Seed Round and Breaking Even
- 7:16Plans to Raise Capital
- 8:32Team Size and Sales Reps
- 9:23Where the Raise Would Be Spent
- 10:02Customer Acquisition Cost
- 10:32Marketing Channels
- 11:10Famous Five Rapid Fire
Introduction and Product Overview
Nathan Latka
00:00Hello, everyone. My guest today is Siddharth Gangal. He is building a tool that helps with AutoCAD and Salesforce installation for solar installers at thesolarlabs.com. He loves solar and technology and started this business when he was a senior in college. His vision is to help solar installers scale their businesses and thereby make solar more accessible to the world. He'll do this by installing better engineering solar systems. Siddharth, you're ready to take us to the top?
Siddharth Gangal
00:24Yep. Let's let's do it, Nathan.
What the Software Does
Nathan Latka
00:26So just to be clear, is this a piece of software you're selling?
Siddharth Gangal
00:29Yes. It's a subscription software for solar installers, which helps them design and engineer solar PV systems. So you can engineer how a solar system would go up on your rooftop, and it helps the installers create sales proposals that ultimately help them close deals.
Pricing Plans
Nathan Latka
00:47And what do they pay you per month on average to use the technology?
Siddharth Gangal
00:52So we have a couple of plans. So our cheapest plan is for $70 per month, and our most expensive plan goes up to $150 per month.
Founding Story and Launch Year
Nathan Latka
01:01And, Siddharth, you started this as a senior in college. What year was that? When did you launch?
Siddharth Gangal
01:06So that was back in 2017.
Nathan Latka
01:112017.
Siddharth Gangal
01:11Yeah.
Current Customer Count
Nathan Latka
01:12And how did you get... Mean, how many customers are you serving today?
Siddharth Gangal
01:15So today we have around 380 solar installers using us.
How the First Customers Were Acquired
Nathan Latka
01:20Wow. How did you get the first 10?
Siddharth Gangal
01:23Okay. Great. Great question. So the first... Guess the first five came in through... So these were the customers that we were already working with while we were developing the product. So we took a lot of user feedback from them.
Nathan Latka
01:38Well, But, Siddharth, but how did you... What do mean? I mean, how did you get your first five connections?
Siddharth Gangal
01:43Oh, okay. So we just picked up a list on on Google Maps and, like, solar websites and just cold called.
Nathan Latka
01:51Okay. So hold on. Take me into that story. So what did you search specifically in Google Maps?
Siddharth Gangal
01:58Solar installers near me.
Nathan Latka
02:00And where were you?
Siddharth Gangal
02:01So I was in... So interestingly, like, we were in Delhi. Sorry. I I was still a senior in college when we did this... These initial user interviews. So we had traveled around 200 kilometers to Delhi, and we did all these interviews over there. What we searched for is just, you know, we ended up at at a hotel, searched for solar installers near me.
Nathan Latka
02:26In Delhi, though. You were in Delhi,
Siddharth Gangal
02:28Correct. Correct.
Nathan Latka
02:29That's great. And how many showed up? What was the total list?
Siddharth Gangal
02:34How many... Sorry?
Nathan Latka
02:36How many showed up when you did that search? How many showed up on Google Maps?
Siddharth Gangal
02:41So in Delhi, there were about 300 installers. So so we had a list of 300 to call from. We managed to get around 40 interviews done in a space of three months. So
Nathan Latka
02:55Got 40 interviews done, and then five of them converted to customers?
Siddharth Gangal
02:59Yeah. Five of them converted, like, within one month of launching. And approximately, I guess, 30 of them would be our current customers.
Nathan Latka
03:1130 of the... An original 300 on the list.
Siddharth Gangal
03:11Yeah.
Nathan Latka
03:11And can we do the math, Siddharth? 380 customers times $70 a month, you're doing at least $26,000 a month right now in revenue?
Siddharth Gangal
03:24Right. We are.
Growth Rate and Year-Ago Comparison
Nathan Latka
03:25And where were you about a year ago so we can calculate growth rate?
Siddharth Gangal
03:30All right. So a year ago, we were
03:36So a year ago, we were approximately at around 50 customers. So we've had a pretty steep growth rate during 2020.
Nathan Latka
03:45So 50 customers. And what does that mean about how much in revenue per month?
Siddharth Gangal
03:51So we were approximately at $3,500 per month.
How They Grew During COVID
Nathan Latka
03:55Yeah. So that's a lot of growth. How did you grow so fast during COVID? Did you just keep just using Google Maps to find list and cold calling?
Siddharth Gangal
04:02No. So we added a couple of more... We added three more channels. So first was cold calling and outbound, due to which we scaled up to about a 100. And after that, we got into channel partnerships with solar manufacturers, through which they introduced us to their dealers and people they sold to, and used those connections to scale to the rest.
Nathan Latka
04:24And how many channel partners do you work with today?
Siddharth Gangal
04:27Today, we work with two.
Nathan Latka
04:29Okay. And how much... They must incentivize them somehow.
04:32Do you pay them for me?
Siddharth Gangal
04:33Yes. Yes. We do.
Nathan Latka
04:35And is it like a fifty fifty sort of split, or how do you structure that agreement?
Siddharth Gangal
04:39So it's it's more 30% to the to the introduct... Introductory and 70% to us.
Nathan Latka
04:4830% over what period of time?
Siddharth Gangal
04:51So that's for the first year, and we pay around five to 10% for the second and third years. And after that, it's our customer.
Nathan Latka
05:01Oh, that's great. Now, do customers stick with you that long? What does your churn rate look like?
Siddharth Gangal
05:08Right. So we have lost about so we've lost about maybe 25% annually.
Nathan Latka
05:17Okay. And that's on a revenue basis, 25% revenue churn?
Siddharth Gangal
05:21Yes. Yes.
Nathan Latka
05:23And now this software, obviously, I imagine these folks you're selling to have a lot of budget. Do you upsell them anything, or just $70 a month is the only opportunity?
Siddharth Gangal
05:32Right. So that's that's an area we're struggling with right now. We're trying to figure out more ways of upselling. So one axis for us for upselling is selling them more seats. Right? So if you have more designers or more engineers, you buy more seats. So that's one axis. The second is we're also building out new features like, you know, that further enhance the... In either the engineering capabilities or the sales capabilities. So that then, you know,
06:01has add ons, certain add ons, which take that $70 to around $150.
Nathan Latka
06:06Mhmm. Yeah. You upsell based off number of projects, residential projects. You upsell based off number of commercial projects, and you're looking now to sort of invent new things for you to be able to upsell against.
Siddharth Gangal
06:17Right. That's right.
Nathan Latka
06:18Do you have a second or third sort of product that you upsell, or is it all just the solar installation software?
Siddharth Gangal
06:24Right. As of now, it's the solar installation software. But we're looking... Again, you know, we're building more. So the next thing for us to do is to go into more customer facing applications. So for example, tools that allow the installer to send a proposal that the end user can interact with.
Nathan Latka
06:24Mhmm.
Siddharth Gangal
06:24So, know, stuff like, e signing, stuff like viewing, you know, three d models, right, with the customer so that they can talk over a design.
06:55That's that's the things that we are building. So again, these will be apps.
Seed Round and Breaking Even
Nathan Latka
07:00And, Siddharth, have you bootstrapped this or raised capital?
Siddharth Gangal
07:04We raised a small seed round of about $200,000 back in 2018. And since then, we have sort of broken even month over month.
Nathan Latka
07:12That's good. Congratulations. That's great.
Siddharth Gangal
07:15Thanks. Thanks.
Plans to Raise Capital
Nathan Latka
07:16Do you have any plans to raise capital now?
Siddharth Gangal
07:20Yes. We do. We do.
Nathan Latka
07:21How much do do?
Siddharth Gangal
07:22We're looking to raise around one to one point five million dollars in the next six months. So as of now, not actively fundraising, but we will be in the market soon.
Nathan Latka
07:35Mhmm. And what valuation do you hope to raise 1,500,000 on?
Siddharth Gangal
07:41So we are hoping to push around a $6,000,000 valuation.
Nathan Latka
07:44And how are you feeling about that? I'm trying to get a read, but you're a very calm, cool, and collected guy.
Siddharth Gangal
07:51Right. So I think it's a reasonable ask. The sector is very fast growing, and there's interest. There's also market trends, like with Joe Biden becoming The US president for one. He has a great green initiative, green jobs plan, which would spur solar in The US. And The US is sort of the leader in terms of policy. So many countries copy what their policies are. So we expect that to have a trickle down effect on the rest
08:27of the world as well. So that will lead to more solar, hopefully.
Team Size and Sales Reps
Nathan Latka
08:32Yep. Yep. Now what does your team look like today, Siddharth?
Siddharth Gangal
08:36So we are a team of 20 people, around nine across engineering and around seven in business operations.
Nathan Latka
08:44How many how many quota carrying sales reps do you have?
Siddharth Gangal
08:48We have three three quota carrying sales reps.
Nathan Latka
08:51And what quota do you assign to them?
Siddharth Gangal
08:54So each each person is supposed to bring in around I'm sorry. I'm having to sometimes convert INR to USD, so sorry for that.
Nathan Latka
09:05Take your time.
Siddharth Gangal
09:07Around 6,000... Sorry. No. It would be $5,000 per month.
Nathan Latka
09:13Got it. So they need to bring in something like $60,000 of new monthly recurring revenue per year or about $800 in new ARR.
Siddharth Gangal
09:22Right.
Where the Raise Would Be Spent
Nathan Latka
09:23Something like that. Interesting. Okay. Very cool. And where else would you... So let's say you go do raise this 1,500,000. Where would you spend the money? Where do you think you can drive growth?
Siddharth Gangal
09:35So right now, much of our current users... So we're... Even though we're across, we're active across seven countries where we have customers, 95% of our customers are in India. So we would use around 50 to 60% of the capital for marketing and, you know,
09:54like international expansion and around 40% on new products and building strongly on the product we have.
Customer Acquisition Cost
Nathan Latka
10:02Love that. What's it costing you right now on a fully weighted basis to acquire a new customer that pays $70 a month?
Siddharth Gangal
10:13It costs us around... So our CAC is approximately... It's sort of a little hard to calculate. I would take it at about 35%, 35 to 40.
Nathan Latka
10:22Of ACV?
Siddharth Gangal
10:24Of the first year revenue.
Nathan Latka
10:26Yeah. So that would be something like between $250 and $350, something like that.
Siddharth Gangal
10:31Yeah.
Marketing Channels
Nathan Latka
10:32Yeah. Okay. And where are you spending that money? Are you advertising or how's marketing?
Siddharth Gangal
10:38So we have a percentage that goes as incentive to our quota carrying reps, right? And approximately on top of that is our marketing costs.
Nathan Latka
10:50Mhmm. But where do you spend those costs? Is it Facebook ads, LinkedIn, somewhere else?
Siddharth Gangal
10:55Alright. So some of our investment is on SEO, and some of... On Google Ads.
Nathan Latka
10:55Okay. Google Ads.
Siddharth Gangal
10:55And and and we actually spend most of our money on content and longer term initiatives.
Famous Five Rapid Fire
Nathan Latka
11:10Makes a lot of sense. We're rooting for you, Siddharth. Let's wrap up with the famous five. Number one, favorite business book?
Siddharth Gangal
11:17Never Split the Difference.
Nathan Latka
11:19Number two, is there a CEO you're following or studying?
Siddharth Gangal
11:23Jeff Bezos.
Nathan Latka
11:24Number three, what's your favorite online tool for building the business?
Siddharth Gangal
11:29Asana.
Nathan Latka
11:30And number four, how many hours of sleep do get every night?
Siddharth Gangal
11:33Around seven and a half.
Nathan Latka
11:35And what's your situation, Siddharth? Married, single, kids?
Siddharth Gangal
11:39Nathan, I'm 25. I hope to be single for a few more years.
Nathan Latka
11:43All right, not married, no kids, 25. Take us back five years. What's something you wish you knew when you were 20?
Siddharth Gangal
11:50Twenty twenty. That, don't worry too much. So I was at college at the time, don't worry too much.
Nathan Latka
11:57Guys, he builds software that helps solar installers install the panels more effectively and at a lower cost. He launched in 2017 while in college, cold called solar installers from a Google Maps listing landed that. That's why he got his first five customers. Now today, doing about 26,000 a month in revenue. Significant growth during COVID, 380 customers on just $200,000 raised. Looking at potentially doing a $1,500,000 round here at a $6,000,000 valuation in the next six
12:23months. Watch out for this guy. He's onto something. Siddharth, thanks for taking us to the top.
Siddharth Gangal
12:28Thank you, Nathan. Pleasure being here.
Nathan Latka
12:31One 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 live. It is fun to watch every Thursday, 1PM
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13:38that 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. 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 counter those people. We gotta push
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14:03See you.