Treblle Revenue, Valuation & Funding (2024)

[00:00] Hey, folks. My guest today is Vedran Cindric. He likes to say he's a developer first. He started developing with PHP and MySQL when he was 18 years old, and since then learned everything he needed to become full stack developer with HTML, CSS, and all the works. He also ran a development company for ten years and then started building a service for himself to help with daily development issues. He turned that into a product called Treblle and [00:22] raised €1,200,000 to build it out. Vedran, you ready to take to the top? [00:27] >> Yeah, yeah. Hi, nice to meet you and glad to be here. You for You the [00:33] bet. So if people want to follow along, the URL is treblle.com. What's the company do? [00:40] >> So we help you with APIs. What we like to say, we like to say that our company helps you stay in tune with your APIs. That's just a nice marketing word, but in an essence, we help you understand what's going on with your APIs and the apps that use them. [00:59] What does that mean? Think a lot of people, when they want to connect to schools, they'll use things like Zapier or MuleSoft, these sorts of tools. Are you playing in that space? [01:07] >> So we're more developer focused, which means essentially you add one of our packages to your API, and out of the box, we give you features like real time API monitoring, automatically generated documentation, error tracking, analytics, and a lot more. So that's how we tend to bring value. The services you mentioned are more geared towards no code solutions rather than actual developer created APIs. [01:35] That's if my dev team at Founderpath relies on a bunch of API connections to keep the system running, we can install Treblle, and we'll get an instant notification the second an API had an issue. [01:47] >> Essentially, if you have an API, your developers and have multiple connections to it, like an app, a website, something, your developers probably today are having struggles with error tracking, monitoring, trying to figure out what went wrong, when it went wrong, how it went wrong. We help you with all of those things. [02:08] What would I pay you to do that? What's your average customer pay? [02:13] >> Because [02:15] >> our early customers were actually the clients of our agency, our kind of pricing tiers are skewed because they pay a really higher amount. But usually, I would say, you know, to get you started, you would pay anywhere between 50 to $100. But as your API becomes more popular, you would pay, you know, upwards to a thousand dollars. Because you have to understand the more your API is popular, the more data we need to handle and the [02:43] >> more data we need to process. So, essentially, if you have a company like Netflix, that could I'll let it. [02:49] This is for people man that that have an API that other people are using, not people using other people's APIs. [02:56] >> Exactly. Exactly. So if you have an API, essentially, and other people are using or you are internally using. So imagine, I don't know, like a game that you have on your phone, right? That's using API. So you can add Treblle to that API and you'll have better understanding what's going on with either your app or multiple apps for your API. [03:20] Got it. And how many customers are you serving today? [03:23] >> So right now, we've got around 200 customers. [03:27] And when did you launch? [03:29] >> Literally, officially, we didn't even launch, but we exist for, I would say, the past six months. We've kind of done, I would say, an open beta where we gave our internal clients the software, and they just kept recommending it to other developers. Now we raised our first seed round, and we're actually officially planning to launch in November this year. [03:56] How much did you raise in the seed? [03:58] >> We raised $1,400,000. [04:02] Okay, great. 1,400,000. And did you do that on a convertible note or a priced round? [04:07] >> Price round. [04:08] Oh, really? That's different. Most people do a convertible note this early. [04:11] >> Just Sorry, a convertible note. Sorry, sorry. Yeah. [04:14] Okay. And what cap did you use on the note? [04:19] >> Could you What do you mean by that? [04:21] Like, is it an uncapped note? Meaning they put in 1,400,000 at a cap, like a valuation essentially on the note. [04:27] >> Oh, yeah. So they put 1,400,000 and valued the company at 5,000,000. [04:33] Pre money or post? [04:35] >> Pre money. [04:36] Okay, got it. So 6,400,000 post. Yes. Okay, interesting. And how were you able to convince them to give you that valuation? Pre product, pre customers this early? [04:47] >> It wasn't actually unlike a lot of other people, we didn't actually have that many problem raising the round. Our story is a bit We attended web summit last November and a bunch of VC companies started reaching out to us. We didn't even plan to do. We didn't even have a pitch deck at that time. So we kind of put together Everything [05:11] was shut last year. Yeah. [05:14] >> Yeah. So essentially, we put together a pitch deck and a business plan and a bunch of European VC funds mostly reached out. We got around three term sheets and we chose Naota, our partner, because they had a combination of a great team and the best deal. [05:34] And who is we? How many founders are there? [05:36] >> So there's me and my co founder, Darko. [05:41] And then you guys split equity fiftyfifty? [05:43] >> No, no, I have a bit more. He has a bit less because I do I essentially build the entire platform and he's mostly a designer and our operational officer. [05:55] I see. Okay. Got it. That makes sense to me. Maybe something more like sixtyforty plus your new investor. [06:01] >> Yeah, exactly. [06:02] Okay. And you mentioned an agency many times. Tell me more about the agency. Is that still running today or did you shut it down? [06:08] >> So one [06:11] >> of the kind of prerequisites to the deal was that we would shut down the agency. That is what we actually wanted. We had the agency for roughly about ten years. We got it to a point where, you know, we've done a lot of work for a lot of international clients, big name brands. And we kind of naturally always wanted to have a product on our own. And it just, we, I would say not stumbled upon it, [06:39] >> but we kind of developed Treblle because we need it personally. And we wanted to give Treblle 100% of focus, so that's why we kind of sunset the agency, transitioned all of our clients to either friendly agencies or somebody else, and we're now focused entirely on Treblle. [06:59] And what year or how much did the agency do in its best year revenue wise? [07:05] >> A couple of million and the best year was actually 2020. The COVID year was coincidentally the best year. I think everybody kind of went double down on everything web or app related. [07:19] So a couple million. You're talking like $3,000,000 in 2020, something like that? [07:24] >> Yeah, yeah, something like that, yeah. [07:26] And how many folks worked at the agency? [07:31] >> It was always the core team of four, and then we would have maybe three people more depending on the amount of job we had. [07:39] And so what happened to the other two people? I mean, did you sell the agency off to them? [07:43] >> Oh, no, no, no. So all of them are now working with us in Treblle. [07:49] Why only two of you guys have equity? [07:53] >> Because [07:56] >> the two of us are the only founders, right? The other employees have equity as ESOP, right? So we dedicated an ESOP fund for our employees and gave them ESOP shares. [08:09] How big of an equity sharing pool, sorry, did you set up? [08:13] >> 8%. [08:15] Oh, 8%. Okay, got it. That's pretty generous. Okay, and so how many people are on the team full time today? [08:21] >> There's four of us now. [08:22] So four now? The [08:24] same four people from the agency. [08:26] >> We've literally just received the funds, I would say, twenty days ago, and we've literally just started the path to hiring. [08:36] Vedran, a lot of people are going listen to this and go, Wait, this guy's just on a $3,000,000 agency to go into startup with no revenue? I don't believe him or what am I missing? They're going to think you're crazy. [08:46] >> Well, again, we always wanted to do our own product. This day and age, it's really hard to find something that, A, you're passionate about and nobody else is doing, right? [08:58] Why that? Not call the agency? Why shut down $3,000,000 worth of revenue? [09:05] >> We [09:08] >> took care of our biggest clients. [09:12] >> Like I said, we found friendly replacements. We gave them to people who we know and trust, and that's it because we wanted to literally fully dedicate to Treblle. [09:23] And that's how you got your first customers, is you sold your old agency So clients to [09:28] >> essentially, we built Treblle together with them, I would say. [09:35] >> At the early stages, they were using Treblle, it just wasn't named like that. And then they gradually, you know, started using Treblle. We gradually started making it better, and now every single one of them is still using Treblle today, and they're recommending it to everybody, you know, in their circles, if you will. [09:54] And Vedran, 200 customers you mentioned earlier at a $50 ARPU, which you mentioned earlier, multiplying those would mean you're doing about $10,000 a month right now in MRR. Is that accurate? [10:04] >> We're actually doing a bit less, but something like that. Yeah. [10:09] Okay. So more like 8,000 a month, something like that. [10:11] >> Yeah. [10:12] Yeah. And where were you a year ago? Zero? [10:17] >> Something like that. We actually had I think around six months ago, we had around $2,000 give or take. And then as people started using the system, as we got recommended more, gained more and more users. But again, we're just literally getting started with this whole story. [10:39] Mhmm. Well, when did you You wrote the first line of code at the agency, it sounds like, which you launched back in 2011, almost ten years, eleven years ago. So you officially spun it out, I assume, when you got the funds and signed the term sheet. You're calling early twenty twenty one, even though you had people using this in 2020 via the agency. [10:57] >> Yeah, exactly. You're exactly right. The thing with this is because the way that we built it, it really required a lot of testing. One of the things that we do, of course, again, is we have access to every single request that is made on your API. So you can imagine if you have an API that has 10,000,000 monthly requests, we need to be able to handle that much traffic, right? So one of the things that we [11:26] >> needed to make sure that we could actually scale is the volume, scalability, and that we could do it at a cost. Right? So that's what we kinda spent at least, I would say, six months testing, doing, developing, and perfecting. And once we're we were done with that, we're act then we we got more confident about Treblle and and what it can do. [11:51] Great pricing plans for SaaS are usually a combination of, like, a flat fee for feature upgrades and then also utility based upselling. The utility based upselling you choose to use currently on your homepage is based off number of requests and a length of log retention. Why are those the right two utility metrics? [12:07] >> That's what we think at the moment that are right. You have to understand that, like you said, I am coming from a developer background. And And one of the things that I hate is complicated pricing. Right? If if I see a product, and I've seen many products, the worst things that I I could see is you want feature a, and that feature is only available in the highest plan. That's just gonna turn me off. So, the [12:33] >> thing that we wanted to do here is we wanted to give everybody all the features and you only pay for essentially what you use. We think that is the fairest offer we can make so nobody loses money and you get both of both words. Now, [12:51] the counter that will be a customer who signs up for you and then goes sign up on your $70 a month plan for 500,000 requests. A year from now, they're doing 10,000,000 requests, so now they're paying you 500 or maybe more than that per month. And in their head, start resenting you a little bit because they go, You know, our API is growing, but it's not because of Vedran and Treblle only. There's a bunch of other [13:09] stuff growing our number of requests. Why are we paying Treblle so much more? How would you think about that problem? [13:15] >> I think if they grew that much, Treblle would be their best friend because in that amount of time, we would have provided so much value and saved them so much money and time to them and their developer just on everything from debugging to writing documentation that they would be actually happy instead of sad. [13:37] All right, fair answer. What does churn look like today? Has anyone signed up and then canceled? [13:43] >> So far, no. So far, we haven't heard bad word about it. [13:47] Well, so just to be clear, everyone who signed up and was paying for our call six months ago is still actively paying today? [13:54] >> Yep. Yep. [13:55] Have you been able to measure expansion revenue yet? People moving from 70 to $500 a month? [14:01] >> We're trying to set that up, but we have seen a lot of cases where people, usually when expansion happens is like you mentioned, when somebody's API becomes popular. So usually what we see people do is they start with lower plans and then move to higher plans as their API scales. So while you're developing, you probably don't need the highest plan because your API is being used by a couple of people, but by the time you launch [14:29] >> and if you have a successful launch, your API is potentially used by thousands, if not millions. [14:34] Yeah, very good. And then what's it cost you? What's your cap to get a new $50 a month customer? Do you know? [14:41] >> Roughly around 8% to 10% of that amount is our cost. [14:48] Of that annualized value or the $50 a month? [14:51] >> Monthly value, yeah. [14:53] So you're paying $5 to get a new $50 a month customer? [14:57] >> Exactly, something like that. [14:58] Where are you spending [14:59] >> Sorry, that on services, sorry. I thought, so we pay, that's the COGS value. We don't know exactly with our employees, but this off of $50 that we pay, we spend like maybe, like I said, five to 10% on other services that we have to pay. Everything else is, you know, we haven't calculated in the amount we spend on our employees. As far as marketing goes, we haven't done any marketing yet, 50 nothing to dollars account. [15:33] Per month, you're spending $10 on COGS that you just need to make the thing run, and then you have employees not spending anything on marketing yet, so still too early to tell. [15:43] >> Yeah. [15:44] Vedran, great story here. Let's wrap up with the famous five. Number one, what's your favorite book? [15:49] >> The Steve Jobs biography. [15:51] Number two, is there a CEO you're following or studying? [15:56] >> Phew. Let me just think. [16:02] >> I do like the new Microsoft CEO, so I've been following him a lot. [16:07] Number three, what's your favorite online tool for building your business besides Treblle? [16:13] >> Trello. [16:14] >> Trello. [16:15] Number four, how many hours of sleep do get every night? [16:18] >> I try to get at least seven, eight hours of sleep. [16:21] And what's your situation? Married, single, kids? [16:24] >> I'm about to be married in less than a year. [16:27] Oh, congratulations. And no kids? [16:29] >> So far, no kids. Yeah. After we get married. [16:33] And how old are you, Vedran? [16:35] >> I am now 33. [16:38] >> 33. [16:39] Last question. What's something you wish you knew when you were 20? [16:43] >> That I don't know everything. [16:45] Guys, they launched an agency brand back in 2011, did $3,000,000 in revenue on the agency last year, then shut it all down when they got a $1,400,000 from an investor just thirty days ago at a $6,400,000 post money valuation for their tool, which helps you manage your API and make sure it's never going down up to a 100,000 requests, and you can scale nicely with the team. They're now doing about 10,000 a month in we'll call [17:08] it 8 to 10,000 dollars a month in revenue from $2,000 a month just six months ago with their team of four. Vedran, thanks for taking us to the top. [17:17] >> Thank you. Thank you. [17:20] 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 live. It is fun to watch every Thursday, 1PM [17:46] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [18:08] 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 are saying. Sign [18:30] 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 [18:38] let me know what you [18:39] 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 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. All right. I'll be in the comments. [18:56] See you.