Trust Chain Global Revenue, Valuation & Funding (2022)

[00:00] Hey, folks. My guest today is Giancarlo De Lio. He's an entrepreneur and seasoned technology entrepreneur, should say, and investor has been successful in building companies and products across many different industries. With over twenty years of experience in building, he's had c has held c suite level roles, acted as an advisor and an investor, his highlights include co founding Vital Hub and Care Kit Health, and now Trust Chain Global, the first end to end transaction platform for [00:22] commodities. Giancarlo, are you ready to take us to the top? [00:25] >> Yes. Definitely. [00:26] Alright. So just to be clear, the Web three point technology on blockchain or is it a SaaS play? [00:30] >> It's it's starting off as a it started off as a SaaS play, we're moving into the Web three technology play as well. [00:36] Okay. And when did you get going? When what year was the first line of code written? [00:40] >> So we started in September 2021. [00:45] Okay, 2020. Okay, well, didn't spend much time as a SaaS company then if you're already transitioning out of that, [00:49] >> Well, no, that's right. So we started off as a SaaS play, thinking that, you know, we're going to do a bunch of services that would be great for people in the commodities industry, and realizing that it needs to grow into that, it needs to change the platform really quickly after customer discovery and going through some pilots and tests. And we moved from just providing certain key services and features like KYCs and AML checks, to actually going [01:20] >> full blown out to providing the full end to end solution and adding our own escrow and paymaster services underlining the entire platform. [01:29] Mhmm. But you can do that as a SaaS company, why decide to go to Web3? [01:33] >> We're looking at Web3 because of the blockchain part of the transparency. The issue in this space that we're dealing with is transparency, fraud, inefficiencies, and things like that. And so I'll use a quick example for you. Everyone knows about the PPE industry, you know, COVID came. PPE industry became a massive commodity play in a very, very short time. It's already grown into multi billion dollar commodity out there. But the biggest issue that's happened with this is [02:04] >> exposed a lot of issues with the process of way people have been doing businesses, and transparency and fraud. And the title ownership of a lot or something that's being held, and how that needs to be transferred over and provided to a buyer after that they purchased it. There's a lot of like proxy and resellers out there who actually don't own the titles and the ownership until that title owner comes at the end. And it's all done [02:30] >> very inefficiently, but it moving into a web 3.0 blockchain kind of model, then the ownership and the title will move very easily over that and it'd be tracked properly and it will be done in a digital manner versus the way that happens now. [02:45] Okay. And so help me understand some customers that are already paying you to use this. Or are you guys pre revenue right now? [02:50] >> We just we just signed our first set of customers and we're we have revenue booked on the books. [02:54] You have what? [02:55] >> Our revenue booked on the books. [02:59] Oh, 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 2,807 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 [03:22] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [03:46] get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna 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 [04:08] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [04:34] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but [04:56] if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation 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. Alright. Let's jump back into [05:22] the interview. Okay. But any any of that revenue actually being realized? So do you have paying customers that have already paid for a month of access or something like that? [05:29] >> Yeah, we have a couple right now that have already started paying for a month of access. [05:33] So tell me tell me those stories, what are they paying for? And like, what are some of the industries using you? [05:38] >> So there so we have a copper deal, so someone buying precious metals, and they're using they're using our platform for, the very first part is due diligence. So our platform does KYC, know your client, and AML checks on people. So a seller comes to our platform and says, hey, I've got this copper lot that I wanna sell, so I've got five tons of copper that I wanna sell. I go onto our platform, we verify that the [06:02] >> seller's real. We say that's a real person, we do a verification on their company, that's great. And then they have the ability to, then they pay, right? So they sign up with their credit card and then they have monthly fees. And basically what they do is they get to create their SOP, standard operating process, their workflow of how they want their deal to be completed, and they go out there and they promote just like they do [06:22] >> with the broker channel. A buyer comes in and then they're paying this is on the monthly fee, they get access to all these tools that allow them to do exactly what we just did with them, which was buyer comes in, I can check, do due diligence on them, know if they're a real buyer, anti money laundering, are there any issues, do they have any fraud or cases around them? What's their ranking out there in the world? [06:43] >> Like, are they a legitimate business owner or personal operator out there? And then they go through our process of actually doing the deal, like signing, we have e signing built in, so signing your NDAs, signing proper documents, uploading your bank statements and things like that, that we can verify, all of that kind of stuff. So they go through that entire process and our monthly fee allows them to manage the deal and do due diligence and do [07:09] >> all of those things. Understood, understood. [07:11] And so what are they paying on average to use that, all the things you just described? [07:14] >> So right now that's a $199 a month that they they use to do that. And then our second revenue model is on the our escrow and paymaster services. [07:24] But current customers today on average are paying $200 a month to use the technology. [07:27] >> That's right. [07:28] Yes. Okay. Got it. Got it. And so what month did you sign up your first customer? Was that just in February? [07:34] >> That was just in February. Yeah. [07:35] Okay. Got it. And so how many customers are out today? A couple? Four, five? [07:38] >> We have five customers in total right now. [07:40] Five. Okay. And and so how have you found them? Right? The the precious metal example, where did you find that customer? [07:46] >> Well, so our a few of us that have joined the company like myself, I've been doing the commodities trading. [07:52] Wait. Are you a founder? [07:53] >> I'm a founder. [07:54] Okay, got it, got it, okay. [07:56] >> Yeah, so my partner, Katrina, and myself are the two founders of the company. And so my background, the last eighteen plus months, I got into commodities. And so the first set of customers that we have are through our internal network, and then we've now been outward, like one of the customers that we just signed on, which is full spectrum testing, was a proper full sale, which was we went out, we we prospected them, we found them, [08:21] >> went through the entire process, pitched them on the concept of the platform, what you get to do, why it's a good idea, and so that was the one that we recently just press released on, and that was like a full prospect. The customers that we have right now, the first set, the copper deals, an example, have been through our internal network that we'd be able to do one to one relationships on that we brought in very [08:40] >> quickly into this. [08:41] The one you just ran the full process on, I mean, you can't run an outbound sales playbook at $200 a month. There's not enough margin to play with the cover sales expenses. No. Why are you charging too little? Why are you charging so little? [08:54] >> Because our main business model is them using our escrow and paymaster services. That's where we are a bank, where we're modeling on that's where our main revenue is gonna be coming from. Where they're act we're actually acting as the escrow, the third party holding the money, and then paying out everyone's commissions, and we're making money on the fees that we're charging out. [09:14] So I understand that, but you can't afford at $200 a month to go do the kind of outbound prospecting you just described. So either your pricing has to change or the sales model has to change. What's more likely to change? [09:26] >> Most likely what is the pricing needs to increase. I think right now, as any new startup, we've decided to go with this pricing to focus on getting decent clients on there and running through, it's gonna grow and change the business, And that monthly fee is going to change as we turn on more features and we're providing more services for people. [09:49] So Giancarlo, first customer less than forty five days ago, you got five today at $200 a month, about $1,000 a month in revenue today. Is that accurate? [09:57] >> That's right. [09:58] And talk to me more about the team. You mentioned your co founders, just you two right now? [10:03] >> Right now, we are the two co founders, but we have our core development team that we have, which is three people. And we have our small BD team who are about four people, a part of the BD team as well. [10:17] Okay, so nine people total full time? [10:20] >> That's right. [10:20] And how are you paying for those folks? Obviously, there's not enough revenue to do that, so who's covering the bill? [10:25] >> So it's a combination of some of them are equity based. We did do a small raise with N49P in Toronto, one of the investment groups that we did When was that? That was January that we announced it. [10:40] And how much did you raise there? [10:43] >> Right there, we raised 350,000 US. [10:46] Okay, great. And so that's funding the growth to date? [10:49] >> That's right, yeah. [10:50] Yep. Most in their pre seed rounds are selling 10 to 20% of their business. Were you sort of in that same range? [10:55] >> No, we were less. [10:57] Oh, you were less than you sold less than 10%? [10:59] >> Yeah. [11:00] How'd you negotiate that? That means you were getting evaluation above 3,000,000 pre revenue basically. [11:05] >> Well, because of some of the numbers that we had booked, like the contracts that we already booked onto the system before bringing them in. [11:14] >> And don't forget too, like the contracts that we have, it's not about that monthly, it's about those other services, like the copper deal that we're bringing on board, the services fee that we're charging them, not just the monthly, but the other fees of like the escrow and the other pieces like that, and the procurement fee that we're doing, that one deal is a 200 ks deal for us. [11:35] I guess I don't understand how those other components work. So why even mess around with the $200 SaaS fee if the big opportunity is a 200 ks and other fees you're gonna get? [11:43] >> Well, because at the end of the day, you have to wait for these clients to actually do the deals on the platform, right? Because they may not complete a deal. There's gonna be a lot of times where they have a lot, they tried to get a buyer on there, it didn't work out, and they moved to the next buyer, the next buyer. So, there's a fee that we're trying to find a sweet spot for that fee [11:58] >> that we're charging. So in between, while we're waiting for them to actually close a deal, cause a deal, commodity deals, they don't happen in twenty four hours, forty eight hours, right? Even with our platform trying to help people speed things along and cut through a lot of the stuff out there, cut through a lot of the fat and make things a lot faster and more efficient, [12:20] >> there's still that wait period, right? So, you may not close a full deal until ten business days or longer, right? But again, it all varies depending on what the industry is, which commodity, And so you need something monthly that you're charging to cover certain bills. [12:37] Mhmm. But you understand the question, right? $200,000 in fees annually compared to a $2,400 ACV SaaS contract seems way, way it seems like it's a distraction, Right? [12:49] >> Yeah. I I would say it's it's a it's a valid statement, but at the same time, I think right now, as we're growing, that might change. What what what this might change, but right now, [13:04] we Well, if you don't actually believe that this copper that had come out of this metals business is gonna put $200,000 worth of stuff through you, it makes total sense why you're going the SaaS route. Right? But then say that if that's what you believe. Like, are you not sure that they're gonna get this kind of project volume through the platform? [13:19] >> No, we're sure that each deal that comes in, that the volume will be there, that the volume will be there. It's the time in between, and as a growing company, have the clients on there, but we're also waiting for those deals to close. And a lot of times that they're using our tools just to test things out to see if that buyer's real, or to test things out, because of that we wanna charge them something for [13:44] >> using our tools if they don't even put a deal through the platform. If they're just using it to do due diligence on somebody or just to do if they're just using it for those purposes and they're not actually posting a deal on our platform, we need to charge them something for using the system. [13:58] Yeah. So in 2024, what do you think you're gonna make more money from? The SaaS fees and people that don't use your platform, or other stuff or fees on closed deals and escrow accounts, things like that? [14:07] >> We'll make more money on closed deals and escrow account and paymaster services and fees with a ramp up and with getting more of the larger clients on there. [14:16] Okay. Very good. On that note here, let's wrap up with the famous five. Number one, favorite business book. [14:22] >> Oh, a business book. Because I was going to say Lord of the Flies is my favorite book. Didn't I didn't realize it [14:29] was Lord of the Flies Lord of the Flies works. Number two, is there a CEO you're following or studying? [14:33] >> One of my favorite CEOs has always been Steve Jobs. [14:36] Number three, what's your favorite online tool for building trust chain? [14:39] >> One of the tools we're using right now, Growth Genius. [14:42] Number four. How many hours of sleep do get every night? [14:45] >> Six. [14:46] And, Giancarlo, what's your situation? Married, single kids? [14:49] >> Married, two kids. [14:51] Two kiddos. Okay. How old are you? [14:53] >> 42. I just turned 42. [14:55] Congrats, happy birthday. [14:56] >> Thank you. [14:57] All right, last question here, something you wish you knew back when you were 20. [15:03] >> When I was 20, to [15:09] your, [15:13] >> to not always work with friends and family. [15:17] There you go, guys. Don't always work with, sounds like there's a horror story, is there a horror story you want to tell us about? [15:21] >> No, no, I think it's just, you know, it's good to meet new people and build relationships than always just stick with the same people that you always know. [15:33] Guys launched in 2021 Trust Chain helps people, especially in the world of personal protective equipment, understand who actually owns that pallet. Can I actually buy it from them? Or are they just sitting in the middle as a broker that doesn't actually have control of these assets? He's now applying that same logic to other industries that need it, like precious metals and commodities and things of that nature, an end to end solution. They've got five customers on [15:54] the platform today paying $200 a month. So a grand a month in SaaS fees, but he's more bullish on the other fees that they're going to be able to get out of customers effectively when the customers use their platform for things like escrow. We'll see what happens. $350k raise at a valuation higher than 3,500,000 to fund the growth to date. Nine folks full time on the team. Giancarlo, thanks for taking us to the top. [16:13] >> Thank you for the time. This is great. Thank you. [16:16] 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 [16:41] 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 [17:04] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna 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 up [17:26] 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 let me know what you 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. [17:45] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.