How Toggle3D Is Democratizing 3D Content Creation With a 10-Person Team After a $9.5M Acquisition (Interview with CEO Nima Sarshar)

Intro and Overview of Toggle3D

Nathan Latka

00:00Guys, there you have it. He built it early in 2018. First lines of code raised $2,000,000 at VC and said, you know, I really don't like raising money. I just wanna build something cool. Let me go join someone who can do the money part for me. So he went and do a publicly traded company. Now the tech's starting to take off. They've got a great team with dash and Nima working together to launch toggle3d. If you

00:16believe in the metaverse, you believe in three d objects, if you believe that the future of content is three d and you really believe in AR, toggle3d is the pickaxe that they are going to sell to that gold miner, setting themselves up for success by now spinning out to their own publicly traded company. We'll see what happens next. Hey, folks. My guests today are Dasha and Nima. They were there on the Ground Floor at toggle3d.com, which

00:36is a three d studio for everyone. Dasha and Nima, you ready to take us to the top?

Nima Sarshar

00:41>> Nice to meet you. Absolutely.

Nathan Latka

00:43Nice to meet you too. So, Dasha, real quick, you're head of product, I believe. Correct?

Nima Sarshar

00:47>> Yes. For toggle3d.

Nathan Latka

00:49And, Nima, are you your founder, CEO?

Nima Sarshar

00:52>> Yeah. Yeah. I mean, we're incubating it inside the the current place we are, but, yeah, things may change, but but as it is today, yes.

Nathan Latka

01:00So what I'm hoping to learn from you guys is there's lot of founders listening right now that get incubated inside of a corporation or an accelerator, and then they wanna spin it out. And there's a lot of challenges with that. So how are you guys doing this? Like, I guess, let's start with when inside of the accelerator where you're being incubated, what year? When was the first line of code written for toggle3d?

Origin Story: 3D.ai and the Nextech Acquisition

Nima Sarshar

01:19>> Yeah. I mean, the story is actually a little longer. I had a startup company called three d dot ai that the current company bought. And the gist of the idea of the story is that we wanna make three d content democratized and accessible because we think the world is three d, and you gotta you know, your content needs to be three d, especially for ecommerce and commercial stuff. That was the that was the beginning of 3d.ai,

Nathan Latka

01:45>> but the tech

01:45What what year was that, though? Put it on timeline.

Nima Sarshar

01:47>> It was February. When we started. But the technology that turns two d photos into three d, and there's limitations with that, just with the AI and and the rest of it. But I always thought that everything that's ever built is designed by someone and oftentimes in CAD. So what if we give the tools? Eventually, I thought for this to really become become really scalable, you gotta give them the tools to do it. So when we were

02:16>> bought out, that was part of the

Nathan Latka

02:17So so, Nima, what what year were you bought out?

Nima Sarshar

02:20>> February 2021.

Nathan Latka

02:22Okay. And did you raise money at the company before you were bought out?

Nima Sarshar

02:25>> Yeah. Yeah.

Nathan Latka

02:26How much did you raise?

Nima Sarshar

02:27>> Couple million. Yeah.

Nathan Latka

02:28Okay. So like 3,000,000, something like that?

Nima Sarshar

02:31>> Let's say 2.

Nathan Latka

02:32Okay. And why sell? Why not just keep building that company?

Why Sell to Nextech Instead of Raising VC

Nima Sarshar

02:35>> Precisely because of what we're talking about. Because I could have gone and tried to basically get, you know, raise my own funding and do my own thing and IPO it. But the conversation we had with Evan, who's the CEO of NextDay, who bought us, The understanding was we come and we incubate it here, and we spin it out as a as its own IPO company, and that's exactly what we're doing. So the the multiple paths you

03:00>> could do, then that way, don't have to worry about financing. There was a great team, Josh included. We jumped in, and we really built it up.

Nathan Latka

03:09Well, I mean, but if if three d AI, though, was on a tear I mean, you'd already raised money. You'd already raised $2,000,000 of equity. If it was on a tear, you wouldn't you wouldn't have sold it. You would have just kept building. So what happened? I mean, was this really like an acquihire that you needed to sort of go in? And I mean, help me understand why you made that decision.

Nima Sarshar

03:23>> Yeah. I

Nathan Latka

03:24mean, it wasn't like

Nima Sarshar

03:25>> a massive buyout, but it was an acquihire. We all made money. Investors made money. But but, again, the point is that this somebody this needed a VC, to be honest, that's really what the I guess that's what you're trying to figure out. There are people who made the question from VCs was, well, does everything need to be three d? Do you need a three d version of a toothbrush in e commerce? Or is it just going

03:54>> to be about, for AR, chairs and tables and whatnot, right? And it was really hard to convince them otherwise. So you needed someone who would back you back you and already believed that. And that's that's why it kinda Evan and I, you know, clicked. Right? But now that, you know, I don't even wanna wanna say metaverse or whatever. Now it's pretty clear that the next version of doing commerce online is to have your products in three

04:24>> d. It's just not about the AR where you put the where you put, like, a chair in the room or whatnot. Imagine you're an Alibaba seller that's that does b two b selling, and which is something we're gonna target with toggle as well. It's like, how do you present your product in a way that's interactive, immersive? People could turn it around, try it, and yes, AR is good. You could kind of transport it across the oceans

04:52>> and see it in that place. But even if you want to buy a toothbrush, but if you wanna buy a 100,000 of them, you do really wanna see it in all. It's three d glory. Yeah. And that's exactly what's happening. It was hard to convince people to do that.

Nathan Latka

05:08Oh, 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 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

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07:31interview. The the just moving I wanna move past the acquisition to talk about the product today and how you how you guys plan to grow it and the spin out. But I believe I believe based on my research, Nextech AR Solutions Corp, because they're semi public here, they they released the deal price was about 9,500,000 in total share consideration is what they bought you guys for. You'd raised 2,000,000. So, obviously, now all that's inside one

07:53company, but now you're now doing the opposite. You wanna spin it back out. So why the decision to go in, and now why the decision to come back out?

The Spin-Out IPO Plan Explained

Nima Sarshar

08:00>> Well, that's just how we create value, right? So you could basically I could have tried to raise and I tried to raise, right? I mean, I didn't get the right terms I needed. You could have raised and basically built the same product with Build, Inc. As a pop, as a, you know, as a private company, right? Or you just say, get acquired, incubated here, and these things often don't work out, but it is working out right

08:24>> now. So I don't, I mean, I've seen incubation or whatever. It's a weird thing. There's a reason why there's VCs and whatnot. But what I learned is that there's a whole world of public markets where you could actually work with the other side of the coast to to raise money, get a product out. It's not that different. But now we're gonna IPO POE right off of another public company, which would have been a lot harder doing

08:53>> a private

Nathan Latka

08:54But public shareholders of this company, if this is crushing it, would not want it to be spun out Because then Oh,

Nima Sarshar

08:59>> oh, so Nextech is gonna be the biggest shareholder of toggle. So it is actually creating value for the shareholders.

Nathan Latka

09:07Okay. But you said you did the deal because you didn't want the deal with private VCs. You couldn't convince them to raise money. So then that's why you joined. But do feel like you now you can convince private investors to give you money if you're gonna need it in the future?

Nima Sarshar

09:18>> Oh, we are. So when we're spinning out a company like toggle, even if you're doing it as an IPO, you still need investors. And and that's part of

Nathan Latka

09:26I don't understand what you mean by that. What do you mean you're spinning it out as an IPO?

Nextech as Largest Shareholder of Toggle3D

Nima Sarshar

09:29>> So next tech is a public company Right? Listed on Canadian Securities Exchange. So we're gonna IPO a new company, which basically spin out part of next tech, but it's gonna be its own public company, toggle3d Mhmm. Listed in the same exchange. And then about half or more of the shares of that company would be owned by Nextech, basically.

Nathan Latka

09:54Nima, why go through I mean, Dasha, why go through all that? I mean, I've I've had folks have friends listen on the exchange, and they they tell me that they spend sometimes up to 1,000,000 a year on just admin fees of being public. Right? You just gotta check a bunch of boxes. Why I mean, you guys aren't at a $100,000,000 in revenue. I mean, why go deal with all that scrutiny?

Nima Sarshar

10:12>> Do you want Dasha, you want me to take it out? Dasha, you want that one?

10:16>> It's right back at you, Nima. Yeah.

10:18>> Alright, Nima. You take it. Their exchanges it's a combination of things. So Canadian Securities Exchange has been really, like, they're meant for entrepreneurs. They're just another think of them as another way of they're for the builders. This is not like a Nasdaq where you literally need

Nathan Latka

10:37to do There's still admin fees, though. Right? I mean, you know, you can spend 200, 300, $500 a year on admin stuff just because because you're public.

Nima Sarshar

10:45>> I don't well, there there is there is still fees, but there's also the opportunities. You have the liquidity to stock. At the same time, you don't have to go chase VCs every day, right, in theory. I mean, if if your product is doing well, so it's just another path. And and right now, like, you really don't wanna be out there in the VC land trying to chase money. So I'm pretty happy. Like, I could not have

11:09>> done this if it was outside with the very same technology at all. It would have died.

Nathan Latka

11:15Dasha, let's flip back over to here the product. Right? Because, yes, there's the metaverse happening. There are crypto worlds being invented. There is VR and AR, all of which you guys are selling the pickaxe to the gold miner. Right? I mean, it feels like that's what this could be here. What are who's paying you today? Is it is it brands like, you know, big Procter and Gamble brands doing the toothbrush team as example, or is it

Who Is Paying for Toggle3D Today

Nathan Latka

11:37more like, you know, the the ape world's being created in metaverse?

Nima Sarshar

11:41>> Yeah. So we're seeing a little bit of everything. With toggle3d, what we've done differently than what's out in the market right now is we've democratized that entire process of three d modeling. What that means is yes, we're still offering this tool to experience three d artists and manufacturers with CAD files, but we've also opened up the doors for people that have never three d modeled before. But with this new rise of, as you said, the metaverse

12:02>> and these VR, you know, XR experiences, this is the way for them to create that content. Something that we've been hearing a lot in the industry is the bottleneck behind all of these cool experiences is that content creation. So toggle3d opens up the doors for anybody to be able to create that content, whether that means populated in XR scenes, you're using it on your e commerce site, you're using it for B2B sales. All of a sudden,

12:28>> everybody has the opportunity to create the digital version of what they see in the physical world.

Nathan Latka

12:33This is very cool. And so what are you charging on average? What's the average customer pay you to use the tech?

Nima Sarshar

12:38>> Yeah, so we're still very new as a product. We're sort of in this beta phase, but the way that

Nathan Latka

12:42we're Are you pre revenue? Are you pre revenue today?

Free Tier Strategy and Virality

Nima Sarshar

12:45>> We're starting to see it. We're starting to see it come in. So we have Okay. I think actually explaining the pricing plan might help answer this question a little bit because we've divided up the platform today into two major pricing plans. The first one is completely free. So a lot of these disrupting technologies we see in the market, that's what helps us really reach virality is to let people have access to the platform, limit the amount

13:08>> of access in terms of the amount of projects they can create, upload size, you know, limit some features, all that good stuff, but give them enough so that they can try the platform, ultimately fall in love with it and continue being a user that will hopefully upgrade and continue using toggle in their everyday creation.

13:25>> So with that, we have that upgraded plan. We have the pro plan.

Nathan Latka

13:28>> Hold on.

13:28So on the free plan real quick, on the free plan, how many creators invented at least one three d object in toggle3d over the past thirty days?

Nima Sarshar

13:38>> Oh, yeah. I mean, I don't have it for the thirty days, but since we've released it in beta end of September, we have about 145 users on the platform today. And I wanna say about 85% of them have made a three d model and published a project.

Paid Pro Plan Pricing and Features

Nathan Latka

13:53That's very cool. Okay. So 145 since September 2022, 83 of them were active. So more than a 50% activation rate, which is great. As head of product, this is the key thing, right? Onboarding. What do you know you've got to get a new sign up to do in the first thirty days for them to become an addicted user that use you every day with their whole team?

Nima Sarshar

14:10>> Yeah, so the first thing is you have to upload a file. So you have to upload a file, you have to get your object into the design scene. And what's really cool about toggles, we start from CAD files. So ultimately we're prompting the user to upload a CAD file and convert it into a web friendly format because it's not like you can just upload a CAD file anywhere today, no matter if it's three d or two

Onboarding: Getting Users to Upload Their First CAD File

Nima Sarshar

14:29>> d, they're very heavy files. A lot of these softwares won't support it. The web will definitely not support it. So we are doing this conversion process where we're converting it into a web friendly format, easy to use, and now very easy to distribute among all these uprising platforms in the XR world.

Nathan Latka

14:46I love this. We have about three minutes left folks. So, help me out here, Dasha, real quick. The paid plans, what do those look like?

Team Size and Equity Structure

Nima Sarshar

14:52>> Yeah. So the paid plans will give you everything that we have to offer today at toggle3d, all the cool features, more designs, and we are seeing people try it out. So we're seeing people try it out. We're seeing people convert.

Nathan Latka

15:04Dasha, come on, talk money to me. What's the price?

Nima Sarshar

15:07>> $29 a month.

Nathan Latka

15:08Okay. $29 And a that is that for unlimited objects, unlimited uploading of file sizes?

Nima Sarshar

15:13>> Yeah. Yeah. Unlimited designs. We do have a file size restriction of 75 megabits right now. We're growing that. So it won't be a limitation forever, but right now, yeah, unlimited designs.

Nathan Latka

15:23Can It's per seat, right?

15:2529 per seat?

Nima Sarshar

15:26>> 29 per seat. You can export as much as you want off the platform. We're really creating some value here.

Nathan Latka

15:31That's exciting. Okay. Super cool. And last couple of questions here. Total team size today, just working on toggle3d. How many folks, Nima?

Nima Sarshar

15:38>> I guess, Dasha knows better. But

Nathan Latka

15:40Okay. Dasha, how many?

Nima Sarshar

15:42>> Yeah. So we have about 10, under 10.

Nathan Latka

15:4610. 10. Okay. And I guess last question here might be wondering about, how do you guys decide, Dasha, how much equity you own? Nima, how much equity do you own? How much does Nextech keep? Like, when you spin out, how do you decide make all those decisions?

AR Way Spin-Out as a Template

Nima Sarshar

15:57>> It's it's been done before inside Nextech. So we spun out pretty successfully another company called AR Way out of Nextech. It created a lot of value for Nextech shareholders. It's its own thing just within it's been only like a month or two months that I think it's valued maybe at 35,000,000 or something. So there's almost a structure that is so Evan was the CEO of Nextech, but we've been through this once, and and and we're just

16:28>> following the same plate.

Nathan Latka

16:30And what is Nextech's total revenue? It's it's public. I just don't know it.

Where to Find Toggle3D Online

Nima Sarshar

16:34>> Honestly, I don't wanna say something that it's I know it's public. It it's tens of millions.

Nathan Latka

16:39Tens of millions. Okay. Yeah. Okay. Yes. You're spinning it out. So this this is great. So listen. Guys, help help my audience out. If they wanna go explore the product a little bit, where can they find you guys online?

Nima Sarshar

16:48>> Toggle3d.com.

Nathan Latka

16:50Toggle3d.com. Guys, there you have it. He built it early in 2018. First lines of code, raised $2,000,000 at VC and said, no. I really don't like raising money. I just wanna build something cool. Let me go join someone who can do the money part for me. So they went and do a publicly traded company. Now the tech's starting to take off. They've got a great team with dash and Nima working together to launch toggle3d. If you

17:08believe in the metaverse, if believe in three d objects, if you believe that the future of content is three d and you really believe in AR, toggle3d is the pickaxe that they are going to sell to that gold miner, setting themselves up for success by now spinning out into their own publicly traded company. We'll see what happens next. Dash and Nima, thanks for taking us to the top.

Nima Sarshar

17:23>> Thank you. What a the pleasure. Thanks.

Nathan Latka

17:27One 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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