How Trufan Reached $1.5M ARR and 75 Enterprise Customers Helping Brands Unlock Consumer Data (Interview with Co-Founder Aanikh Kler)

Introduction and FaZe Clan Investment

Nathan Latka

00:00Hey, folks. My guest today is Aanikh Kler. He's 23 years old and the cofounder of Trufan, a company building products to improve brand engagement while compensating users for their data. He's passionate about gaming and esports and is also an investor in FaZe Clan. Aanikh, are you ready to take us to the top?

Aanikh Kler

00:14>> I am, Nathan. How are doing?

Nathan Latka

00:15What is what is that? The Fozzy Clan. Am I even saying it correctly?

Aanikh Kler

00:18>> It's FaZe Clan. So Of course. FaZe is a obviously, they're an esports organization. They've been probably around for well, I'm 23, and I've been watching them since I was, like, probably 11, 12 years old. So probably, like, ten, eleven years. And, yeah, actually, they recently just announced they're gonna be going public soon, which is super exciting. The first, in my opinion, like, major esports organization to go public. So, yeah, super excited. And, again, like, I I

00:44>> grew up being a massive Call of Duty nerd. So to be able to kind of join them as an investor almost two years ago now was really awesome.

What Trufan Does and Who It Sells To

Nathan Latka

00:51Alright. Tell me about Trufan. What's the company doing? Who are you selling to?

Aanikh Kler

00:55>> Yeah. Absolutely. So Trufan as a basis is I talked about on the bio. Like, really what we aim to do is help enterprises collect compliant consumer data in a way that, you know, really cuts the the consumer into the data equation. So we work with large enterprises like Netflix or the NBA to essentially allow them to better understand their audience through data. So the main areas we focus on are web data, first party data like emails,

01:19>> phone numbers, mailing addresses, and social media data, like a user's data on Instagram or Twitter.

Pricing and Average Contract Value

Nathan Latka

01:24And what do these these customers on average pay you per month to use the technology?

Aanikh Kler

01:29>> Yeah. So, you know, we definitely range. Like, we have, you know, subscription plans that, you know, a small business or many influencers use on our website that range from, like, you know, $200 a month to $500 a month. And, you know, enterprises, we definitely have some large, you know, larger enterprises that, you know, are probably our ACV is anywhere from 2,500 to above 5,000 per month on average for an enterprise customer.

Nathan Latka

01:52So your largest customer is, what, $60,000 a year?

Aanikh Kler

01:55>> No. We have a we have a few customers who are kind of outliers that are more along the lines of, like, $140,000 to $160,000.

Nathan Latka

02:01Oh, wow. Interesting. Okay. So so really truly full span here, but sweet spots maybe like a grand a month, something like that?

Aanikh Kler

02:07>> I'd say we heavily weight towards the enterprise side. So probably I think our actual ACV number between enterprise and transactional is around 1,900 a month.

Company Origins and Co-Founder Swish

Nathan Latka

02:18Okay. Interesting. Fair enough. And then what's the backstory here? When did you write the first line

Aanikh Kler

02:22>> of code for the platform?

Nathan Latka

02:23Yeah.

Aanikh Kler

02:24>> So Trufan was know, really, we started about three and a half years ago, and it was really the the brainchild of kind of my co founder, Swish. You know, he is amazing, amazing guy, really awesome background, but he was in New York, and he'd been building media companies. So his his project he was working on before Trufan was this media company called Dunk, and they essentially own Instagram accounts, Twitter accounts,

02:45>> Snapchat accounts, all regarding basketball content, and they had about 11,000,000 followers across the network.

Nathan Latka

02:51So Wait. Hold on.

02:52There's this is too much coincidence here. Basketball, his name is Swish. Is his name actually Swish?

Aanikh Kler

02:57>> So his name is, but his PE teacher in sixth grade couldn't pronounce that and nicknamed him Swish.

Nathan Latka

03:04I got it. Okay. This makes sense.

Aanikh Kler

03:06>> So this was this was the the nickname was long before he got into any of us.

Nathan Latka

03:10That's hysterical. Okay. So you guys start writing code in, like, 2018. How many customers are you now serving today?

Customer Count and Revenue Today

Aanikh Kler

03:16>> Yeah. So right now, I think we have about 75 enterprise customers, and in total, probably over oh, man. I'm probably gonna get this wrong. I think, like, 300 to 400 customers. I'm probably I'm honestly probably getting the exact customer amount wrong, but I do know about 75 enterprise customers.

Nathan Latka

03:33So if we just look at these enterprises at, $2,000 a month on average, I mean, what? You guys are north of $150,000 a month right now in revenue?

Aanikh Kler

03:39>> Correct. Yeah.

Nathan Latka

03:40Very cool. And maybe double or triple that, right, if you add in all the smaller users. Right?

Aanikh Kler

03:44>> Yeah. Yeah. Our our our ARR is, you know, probably, you know, in terms of where we're at, you know, it's definitely north of, like, 1.5, 1.6. So Yep. Yep. Feeling feeling pretty good.

Nathan Latka

03:55Yep. Yep. Yes. Yeah. So that mean 1.6 would be okay. Well, hold on. So, like, a $150,000 a month would be almost a 2,000,000 run rate, but you're you said you're closer to 1,500,000 run rate?

Aanikh Kler

04:04>> Correct. Yeah.

Nathan Latka

04:05Okay. Okay. Fair enough. Cool. So so what talk to me a little bit about this other thing you're working on, is Surf. How did this sort of come out of Trufan? Are they related?

Aanikh Kler

04:12>> Yeah, absolutely. I think, really, to be honest with you, Nathan, a lot of what we've done over the last couple of years is really just try to understand where consumer data is going. I think if you say, like, what am I obsessed with right now? I really outside of probably skiing or diving, which are passions or hobbies, I'm really obsessed with consumer data. And what does the future of consumer data look like? And the last couple

Surf: The Consumer Browser Extension

Aanikh Kler

04:35>> of years, whether we were building Trufan, we were really just trying to understand what does that look like? And what we realized is we believe that the future of consumer data is opt in and it's a value exchange. Meaning that if a consumer is going to give data to a brand, they need to get something in return. Long gone are the days where, you know, your privacy and your data was the admissions price for entering the

04:56>> internet. We don't believe that that's what the future of the internet is going to look like. And thus, all of the last couple of years and working with these different customers,

05:06>> we started to understand that brands wanted better data on their audience, but they also wanted data that they could use moving forward, that they would actually be to use with GDPR, CCPA anyways. Long story short, Surf was our way of saying we wanna reward consumers for their data, and we wanna provide brands compliant data that they can't get from other sources. So what Surf is, it's a browser extension that anyone in North American can download, and

05:30>> you get points for browsing the Internet. And you can use those points for items, gift cards, whatever you want, then all the browsing information you share is anonymized. Mhmm. So what that means is that by actually being on the Internet, you can earn from sharing your data. And your data, you know, instead of it just being taken from other large companies, you can earn from it.

Nathan Latka

05:48So so help me understand, like, can you quantify the like, what do you measure? GMV through SURF? Or, like, what what's the key metric there?

Surf Metrics: DAUs and Product Hunt Launch

Aanikh Kler

05:55>> Yeah. For us, in terms of key metrics with SURF right now are really just daily active users. Launched about a month and a half ago, and we're at about 16,000 DAUs, which is really, really exciting for us. Over 35,000,000 URLs shared. So then really great feedback, like closing in on, I think, 300 reviews on the Chrome store, which is really exciting as well compared to other browser extensions that have been out a lot longer than us.

06:21>> We've had really positive community feedback and people being excited about this idea that they can earn from their data.

Nathan Latka

06:27Mhmm. And you launched on Product Hunt as well. How many sign ups did Product Hunt drive?

Aanikh Kler

06:31>> Yeah. I think Product Hunt was our first like, our first real day, you know, and where we weren't just, you know, giving it to friends and family. I think we got, like, 600 something upvotes from Product think, you know, at the end of that day, we were at, like, maybe 400 or 500 users. So I think Product Hunt was definitely a massive driver of that. At least, you know, 300, 400 users most likely. They at least

06:50>> saw us from Product Hunt.

How Surf Makes Money

Nathan Latka

06:52Yep. And how do you make So what's the plan? I mean, how do make money on Surf?

Aanikh Kler

06:56>> Yeah, absolutely. So I think the best thing to understand about Surf is we're really aiming to disrupt web analytics. So if you think of companies like Comscore, you think of companies like SimilarWeb or Nielsen, You know, these are the companies that we're looking to disrupt. And, again, like Neil or SimilarWeb went public. They do about $250,000,000 in annual revenue. So for us, our goal is just to continue to acquire users, continue to reward them for their

07:17>> data, and then essentially, you know, monetize that data to brands through insights.

Nathan Latka

07:22How many rewards have have you sent out so far?

Aanikh Kler

07:25>> Yeah. I think we are at about $40,000 that we've given back to our users in terms of point redemption. So users redeeming points for rewards. And we actually well, yesterday was the last day, but any user who downloaded Surf was entered to win a Tesla. So we're actually gonna be giving away a model three. Probably, we'll be announcing the winner in the next, couple days because the contest or the the giveaway just closed yesterday evening.

Nathan Latka

07:49So the big game with gift cards, like, when Target does Black Friday gift cards, is you're betting effectively that people forget they're on their walls and never actually use the gift card. So you never actually have to, like, provide that thing. So when you say 40 points given back to your community, how much of those have actually been redeemed for real things?

Aanikh Kler

08:03>> So on our side, we don't necessarily like, we pay for the gift card in advance. It's not necessarily, like, when it's redeemed. We give them the value right up front. So on the you know, the brand is essentially making money from us when a user redeems the card. So for example, let's say Starbucks, very popular gift card. We pay Starbucks $10 to be able to give the user the $10 Starbucks gift card.

Nathan Latka

08:24So ultimately is, That's what I'm like, let's say I'm a user and I have 10,000 points, and it's gonna cost a thousand points to get a $10 gift card from Starbucks via Surf. But I never remember to go in and and tell you that I want that gift card using my Surf points. Right? How many, like Mhmm. Unused Surf or un like, I don't know, unused Surf points exist right now?

Aanikh Kler

08:42>> Oh, sorry. No. That's the the $40,000 has been redeemed points. In terms of overall points, there's probably another $120,000, $130,000 worth of points that have been unredeemed so far. Many users prefer to save their points and get bigger items. Not everyone necessarily wants to redeem for a $10 Amazon or Starbucks card right away. Some people are more into, you know, passively accruing points over time and getting a bigger item later. But the 40,000

09:08>> to $50,000 metric that I gave you, that's redeemed rewards. That's not overall compensation. Overall compensation is closer to about probably $110,000, $120,000.

Funding History and Seed Round Details

Nathan Latka

09:18And so where do guys get the money to buy a Tesla or pay for $40,000 worth of Starbucks gift cards?

Aanikh Kler

09:23>> Yeah. So we again, it's like we were venture capital funded. We have some really amazing investors and funds that have come on and supported this vision. Ultimately

Nathan Latka

09:30or Trufan?

Aanikh Kler

09:31>> So Surf is a product of Trufan.

Nathan Latka

09:34I see. So how much have you raised separate company.

Aanikh Kler

09:36>> Not a separate I yeah. Yeah. Not a separate entity. It's all under all under Trufan.

Nathan Latka

09:40Correct? So how much have you raised at Trufan?

Aanikh Kler

09:42>> Yeah. We've raised just under 6,000,000 so far.

Nathan Latka

09:45Or And when was when was the last round?

Aanikh Kler

09:48>> Well, we actually just announced a $2,000,000 extension to our seed round we did earlier this year. That was probably late last week.

Nathan Latka

09:55Oh, well, okay. Week we announced that seed extension.

09:58My my team recruiting great founders come on the show is quick. This is wonderful. Okay. So so when was the first round done?

Aanikh Kler

10:06>> Our first round was done probably, like, almost two years ago, but that was small. Right? We're talking, you know, 300,000, 400,000. Our last major round was the first part of the seed, and that was probably middle of q two of this year, and that was about 2,500,000 Canadian.

Nathan Latka

10:23Interesting. Okay. So the 300,000 seed you guys raised back in 2019, usually founders are selling, like, 10 to 20% of the business in the pre seed round. Is that sort of where you guys came in at?

Aanikh Kler

10:34>> I'd probably say a little less. What we worked off of was essentially like we did the whole YC Safe model. So we kind of followed suit in terms of traditional We were really lucky. Both Swish and I have a lot of mentors and kind of advisors that have kind of been through the startup world a lot. And they kind of helped us in navigating those early ages, but we kind of pegged closer to around what most

Valuation: SAFE Cap and Seed Multiple

Aanikh Kler

10:57>> kind of YC companies signed their their deal with YC, which is around, I think I can't remember if it's changed, but when we were looking at it, it was like 6 to 7,000,000 on that was the cap of the SAFE.

Nathan Latka

11:08Got it. Got it. So you raised $300,000 on a on a SAFE with a cap of 7,000,000, something like that?

Aanikh Kler

11:13>> Yeah. Roughly around there. Yeah.

Nathan Latka

11:14I see. I see. Okay. Now when you did the seed, did you guys decide to price it or stay on on a note?

Aanikh Kler

11:19>> So the seed was priced. Correct. Yeah. Yeah.

Nathan Latka

11:21Yeah. So walk me through how you came to that because that's a big negotiation. Right? How do you do evaluation there? Most are selling again 20% of the business in the seed round.

Aanikh Kler

11:28>> Yeah, absolutely. I think for us, it was just looking at what revenue was at, growth potential. We had signed some This year for us was a really big year in terms of proving out we can sign customers north of $100,000 a year. We've been able to do that with two or three different customers. So that was a big proving ground for us. Can we increase ACV? Because at the beginning of the year, was only about $800

11:54>> Now it's about $1,800 So that was a big proving ground for us. So really it was just kind of sitting down and saying, Hey, what do we think is a fair multiple that we're seeing? We have friends that have raised on 40x multiples. We have friends that have raised on five X multiples. So we sat down with our lead investor. They kind of pegged what they thought was fair. We agreed and kind of moved from that

Nathan Latka

12:18>> space.

12:18And so what mean, to the extent you can, I won't ask you the exact valuation, but what sort of range multiple did you decide to raise at?

Aanikh Kler

12:24>> Yeah. Probably, you know, around, I'd say, like, 15. Say roughly around that area. Yeah.

Nathan Latka

12:29Okay. Fair. And and again, you're 1,500,000 sort of run right now. So, right, we're talking like, like 25,000,000 sort of, you know, to 30,000,000 sort of valuation, somewhere in there.

Aanikh Kler

12:38>> Yeah. Somewhere around that.

Nathan Latka

12:40Yeah. Why do you need them? I mean, why does this why do you need so much capital? I mean, obviously, you get diluted every time you do this. Why do need money here?

Profitability Period and Decision to Fundraise

Aanikh Kler

12:45>> Yeah. I think for for us, the the main thing was you know? And and it's a great question, Nathan, because actually for about a year of the business, we were cash flow positive. And that was actually when we were sorting out, you know, what did we want to do? We had some really great customers, you know, growth was good. It wasn't crazy fast, you know, VC scale, but it was good because we were just focusing on

13:02>> staying profitable. What we decided is that both my co founder and I realized that And again, this kind of goes into the longer story of why we even came to surf was we started to figure out slowly but surely different things related to consumer data. We wanted to kind of push our hypotheses and see if they would end up being true. And for us to be able to do that at the scale that we wanted to,

13:22>> we thought it would be best to bring in venture capital. So that's kind of what our decision was. Again, like I said, there was close to a one year period where we were, you know, cash flow positive, and we we had no intention of fundraising. But as we came along and different customers wanted more and more, we realized that we were kinda at a crossroads. Both my co founder and I are are young and thought it'd

13:41>> be know, we might as well see what we can do.

Year-Over-Year Revenue Growth

Nathan Latka

13:43We do love profits. And help me understand growth. If you're doing a $125,000 a month today in revenue, where were you a year ago? Do you remember?

Aanikh Kler

13:49>> Yeah. A year ago today was probably about $60,000, $65,000 a month.

EA as a Customer: Use Case Deep Dive

Nathan Latka

13:56Doubled. You've doubled year over year, something like that. Yep. Yep. Very cool. And then look. I mean, these 75 customers that are paying you these enterprises, so so, like, what what would Nike pay you for? What what are they getting?

Aanikh Kler

14:07>> Yeah. So, I think it really depends. You know, let's take an example, which is EA. So, EA is one of our biggest customers. We work with them for their annual EA Play livestream, which is their biggest event, you know, like to 80,000 concurrent viewers. So what with EA, it's it's pretty you know, they they have everything. So I think that's why I wanna use them as an example. So they analyze all their social data. So all

14:30>> of their EA social accounts on Instagram and Twitter, they're able to do analysis on it. So who their followers are, who their most valuable followers are, the location, what's in their bio, what they talk about, etcetera. So and that's not just EA, but it could be, you know, FIFA or other properties that they own within kind of their social lens. The second thing is all kind of the the first party data. So whenever EA does their

14:52>> livestream or their FIFA launch, they like to run a lot of giveaways. So what that means is they wanna essentially give away different prizes or game codes in exchange for users to do certain actions that might be following them on a social channel, signing up for their email newsletter, downloading their new EA Play app, whatever it may be. So our software helps facilitate that entire interaction. EA can pick what they wanna drive people towards, and we

15:16>> do the rest to make sure that that's verified. And they collect all the first party data, and then they can view all that data in a dashboard. And, for example, if they wanna activate all the emails of the people who entered who happen to be from Los Angeles because they're doing a big, you know, NBA promotion there, then they can do that through the dashboard.

Team, Engineers, and Sales Reps

Nathan Latka

15:32And talk to me about the team today. How many folks full time?

Aanikh Kler

15:35>> Yeah. I think we're about 28 people full time right now.

Nathan Latka

15:3928?

Aanikh Kler

15:39>> Yeah.

Nathan Latka

15:40And how many engineers?

Aanikh Kler

15:41>> Let's see. I think it's 11.

Nathan Latka

15:4411. Okay. Very cool. And do you have sales reps at these at these, like, ACV levels? I imagine you probably do. Right?

Aanikh Kler

15:50>> Yeah. We do. So we we actually we hired our first real salesperson at the beginning of this year, which was great. And then we brought on another two people now to the team. So it's the sales team is about three. But my my co founder, Swish, does spend a lot of time kind of, you know, selling as a CEO as well.

Nathan Latka

16:06Very cool. Listen. This is great now. Are you planning on raising any more anytime soon?

Aanikh Kler

16:08>> Well, I mean, you guys you just raised the 2,000,000. Right? So you're gonna invest that for a little bit.

Nathan Latka

16:12What do think can get revenue to before your next raise?

Aanikh Kler

16:14>> Yeah. I think our our goal is to probably get revenue close to about 2,000,000, dollars within the next probably six months, I'd say. And again, for us, a big focus is SURF user growth. To be honest, a lot of the funds that we've talked to recently that we like to keep warm, they're very interested in SURF just because from a pure consumer metrics play, we're kind of doing great in terms of compared to other consumer companies

16:40>> out there. So they're interested in kind of what does the intertwining look like between this consumer app and the data we're generating there and the businesses we have paying for our current b two b product? Like, can we bring those two things together?

Famous Five and Closing Thoughts

Nathan Latka

16:52Makes a lot of sense. In the meantime, let's wrap up here with the famous five. Number one, Aanik, favorite business book?

Aanikh Kler

16:59>> The Hard Thing About Hard Things by Ben Horowitz.

Nathan Latka

17:01Number two, is there a CEO you're following or studying?

Aanikh Kler

17:04>> I really like not I don't think not, like, currently that I'm obsessed with, but, actually, that's a lie. One of my favorite CEOs is CEO of Dapper Labs, Roham Gharegozlou. Dapper Labs.

Nathan Latka

17:17Number three, what's your favorite online tool for building a business?

Aanikh Kler

17:21>> I honestly really, really like Slack mainly because of all of the integrations that we have. So, all of our team can be updated with metrics, revenue, you know, user feedback, Zendesk, everything all lives in our Slack. And I think it's a really good hub for any everyone on the team to get an overall insight of the health of the company.

Nathan Latka

17:39Number four, how many hours of sleep do get every night?

Aanikh Kler

17:42>> I get probably seven to eight hours of sleep. That's big on Sleep's very good on balance.

Nathan Latka

17:47Situation, married, single, kids?

Aanikh Kler

17:50>> I am in a long term relationship with my girlfriend. Again, I'm I'm 23 years old. She's 23, so we're both young. We've been going out for four and a half years. She's finishing her final year of med school, so probably, move along from just being boyfriend and girlfriend in the next year or two.

Nathan Latka

18:04Last question. What do wish you knew three years ago when you were 20?

Aanikh Kler

18:09>> I think three years ago, I wish I knew that it's okay to learn. I think so much of being a young person in startups, like I went to Stanford, like, a lot of it is just pushing to achieve and not necessarily taking the time to actually learn that it's okay to learn and fail. And I think 20 year old me could probably probably hear that, and it would go a long way.

Nathan Latka

18:29Guys, Trufan is helping big brands like EA Sports collect audience insights. Their new tool called Surf is basically rewarding folks for using them, paying them for their data to continue powering this machine and get network effects. They're doing $60,000 a month a year ago. Now a $125,000 a month. So really healthy growth. They just closed the second part of their seed round. So 4,500,000 total raised in their seed round at somewhere between, call it, 20 and

18:51$30,000,000 valuation. They're scaling fast, 28 on the team, 11 engineers as they look to continue bringing on salespeople and pushing product forward, specifically, SURF. Aanikh, thank you for taking us to the top.

Aanikh Kler

19:02>> Thanks, Nathan. Thank you so much for your time.

Nathan Latka

19:06One 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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