Umwelt.AI Revenue, Valuation & Funding (2024)

[00:00] Guys, was a technology executive in HR, but use those salaries to build up a nice personal nest egg to make sure he could pay off his mortgages, pay off all his car loans, off everything. So he could take the risk and launch the company which he did in 2019 called umwelt dot ai. It helps HR managers make sure their employees are happy so they retain them. He's got 16 customers today. Those are companies that pay for [00:19] 16,000 seats on his platform that yields $10,000 per month in revenue or $120 of ARR. He's kept the company lean eight people or sorry, six people full time out of India paid himself very little about to close a $200,000 pre seed round at a 3,000,000 post money valuation. We'll see what happens next. Hey, folks, my guest today is Vishal Chopur. He's a seasoned professional with two decades in HR leadership coaching and mentoring. A former HR head [00:44] turned teacherpreneur, he pioneered umwelt.ai to empower CEOs and CHROs in shaping a future ready people first culture using AI. His expertise drives employment engagement and retention through tech driven insights transforming workplaces for lasting success. So Shah, you ready to take us to the top? Yeah. All right. So give me a customer story today. Who's using umwelt for employee engagement and people analytics? [01:11] >> So these are large enterprises basically from different industries, normally service industries which are highly, I would say employee intellectual dependent. [01:24] >> Basically these are the companies which would have a large intellectual property in terms of employees knowledge base and they are largely dependent on the employee actually to serve their customers. [01:38] Let's use a specific example just so my audience can really understand what you do. You have Puma listed on your website as a customer. How does Puma Yeah, use [01:47] >> so they use us for having the interaction with the employees throughout the journey and understanding their behaviors, needs, experiences within the company. And we also, use behavioral science behind it to understand the psychology of the employees and their experiences within the company. Proactively generate the alerts to the CEOs and HR leaders to understand that what is missing in the organization, what employees are looking for, and how I they can actually retain and engage their employees proactively. [02:18] Okay. Let's you didn't use the word Puma in any of those sentences. So let's talk specifically, Ken, about Puma. So so for example, does Puma's does Puma's onboarding and recruitment team use you as an applicant tracking system? [02:30] >> So this is experience analytics. That means that similar to employee experience feedback, the customer experience feedback. What we do is that right through onboarding till post exit, we set up the journey of an employee within the company. Right? And we decide that when at what intervals and what [02:53] >> the points that matters to the employee journeys, we want to have an interaction with them. [02:58] I'm trying to get away from using buzzwords and give you the opportunity to actually tell us how a real customer use you. So for example, Puma quarterly employee reports. The Puma HR managers use let me just give you an example so you understand what I'm trying to Is umwelt used to do for example, the performance review every quarter at Puma so that we can make sure that the HR leaders are empowering the team members to hit [03:22] their bonuses for example. [03:24] >> Okay. So I will talk about verimoto specifically right here. Again, the similar client retail. So we help them to actually right at the point of the onboarding of the employee itself. They go through the induction process right now. Post induction, [03:42] >> our boss name is Nikki. So Nikki goes and interact with them and understand their experience, how their experience has been throughout the induction process. So that would involve from the company's perspective, they want to deliver specific experiences to their employees. So we check back that if they actually have those experiences and what were the lags behind those experiences of an employee, would they contribute to them looking for leaving the company as well. [04:11] I see. [04:12] >> And we generate these insights to the CEO, the HRs, all the HR partners to take those actions and rectify those problem areas, speak to the employees and keep them engaged and working with the company. [04:26] Understood. What does the average customer pay you per month to use this kind of technology? [04:32] >> So it 0.5 to $1 per employee per month. [04:38] Okay. So what is the average size of a customer that's using it then in terms of number of employees? [04:44] >> Typically, 2,000 employees to 10,000 employees. [04:49] Okay. So so let's pick a midpoint there. Let's say 7,000 is the average team size. At at point at 50¢ a seat, the average customer is paying you 3,500 per month. Is that a fair average? [04:58] >> Correct. [04:59] Okay. Interesting. Okay. Give us the backstory here. When did you launch the business? [05:04] >> So we started working I started working on mobile.a in 2018 and we launched on in two thousand nineteen July. [05:12] Okay. How did you get your first customer? Do you remember? [05:16] >> Yeah. It was best seller, which is Vera Muda only, Jack and Jones selected. These are all the brands belonging to the same group. Right? So it was it was a it was a huge group with all these retail apparel brands. [05:29] 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 [05:52] 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 [06:17] 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 [06:39] 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 [07:04] 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. Alright. We're gonna go back to the YouTube video here in a second, but if [07:26] 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 the [07:53] interview. How did you land that customer though? That's a big group to get as your first customer. Usually big enterprises don't work with startups. [08:00] >> I come from the HR fraternity. So I know good number of CHROs, my ex colleagues, right? So I went through this idea to them and started exploring that what exactly they will look forward to have, because I think communicating with the employees the largest problem any organization has today. If you see right from Google's or Facebook's, everybody is facing that challenge that how to interact with the employees and how to actually preempt that what exactly is [08:29] >> their experience. Listening to the voice of the employee is very important to them. [08:32] Understood. Do you remember what the contract size was on that first customer? [08:37] >> So it was around 20 ks annual. [08:41] Okay, interesting. And have you sensed increased or decreased prices generally? [08:46] >> Increased. [08:47] How did you make the decision that 20 ks was the right price to go out to the market with back in 2019? [08:52] >> I looked at my costs very specifically. I didn't want to actually so it was very specifically looking at my costs, as well as the market competition. I wanted to actually make it, sort of, keep it very, very lucrative. Right? So so one of one of the things was only not when when we use the word AI, typically what happens to the mind, is that the price is going to be 10x. But I wanted to keep it [09:17] >> same as those annual feedback surveys were charging for one single communication with an employee on annual basis. We charge the same amount on automating the complete journey of these interactions. So it could be seven, eight, nine, ten conversations. We do not control the number of conversations you want to have with the invoice. [09:37] Understood. So that was your first customer. Fast forward to today, four or five years later, how many customers are you working with? [09:44] >> Look, currently we have around 15,000 paid users. We do not take number of customers into consideration, but paid users. So it is 15,000 paid users what we have right now, working with 16 brands right now. [10:03] >> Okay. If you say customer, there is 16 brands. [10:05] One six. I'm gonna make sure we're using the same lingo consistently throughout the interview. When you say 15,000 paid users, let me rephrase that. You have 16 companies working with you that pay for 15,000 employee seats. Is that accurate? Yeah. Okay. So 16 times $3,500 per month on average, which you shared earlier would put you about $56,000 a month in MRR today. Is that accurate? [10:28] >> No. So we are at a monthly average of around 10,000. [10:32] Okay. So you're at 10,000 in MRR today. So I guess what isn't accurate? Is there is the ARPU less per customer or do you have less customers? [10:41] >> It is it is the [10:44] >> lesser r ARPU. Okay. Yeah. [10:49] $10,000 per month across 16 companies would be $625 per month per company on average. Yep. And $625 $625 per month at a dollar per seat per employee would mean that each company is actually about 600 big, not an average of 2,000 to 10,000 employees like you shared earlier, [11:08] >> correct? Yeah, so few of these companies form under the group. So when we accumulate the number of employees, we actually calculate at the group level, not at the company level. [11:21] Okay. Got it. So MRS 10,000 per month today. I mean, obvious question is you started working on this in 2018, 2019. This is a very small amount of revenue Vishal to be working on this for four or five years. Why haven't you just take this thing behind this shed shot it start over with a new idea? [11:37] >> So I'm still with an idea to be frank. So kind of technology we were building and we wanted to keep it really cheap. So we invested a lot on building the technology itself. [11:46] How much have you invested so far? [11:49] >> So we have invested around so I'm I'm just converting to USD. Right? So it would be around [12:03] >> 200 k. [12:04] How much of that was your own money? [12:07] >> That was that is all bootstrapped. So we are we are currently bootstrapped. [12:11] So that $200,000, where where did that come from? That's just company revenue? [12:14] >> No. It is it is all customers'money. So so we we we invested, reinvested, reinvested the customers money. [12:20] So you didn't put any money in at the start and you haven't raised any external capital today? [12:24] >> No. So we are raising our first PC round right now. That is as we speak the next week, we are closing off the transaction. [12:34] Okay. How much are you targeting in the round? So we [12:37] >> are targeting 200 k right now. [12:39] Okay. At what valuation? [12:42] >> At a valuation of 3,000,000. Right? [12:45] How do you defend that valuation? You know, an investor is going to say you've been doing this for five years, you only have 10 ks of revenue, that's $120 a year, a 3,000,000 revenue multiple will be over a 30x multiple and a compressed equity market. How do you defend that valuation? [12:57] >> So we are looking at reaching $11,000,000 within the next one year. [13:00] Why would anyone believe that though when it's taken you four years to ten k of MRR? [13:05] >> We already have the pipeline in place. [13:07] Well, yeah, we probably felt good about your pipeline two years ago too. What what proves or what do you point to to say, hey, investors, I can execute this pipeline and close it? [13:15] >> We never had a pipeline earlier. We were never marketing. So it was all the clients through the reference what we were getting and we were building the product along with it. Today we have reached to a level where exactly we we have started going to the market and actually started doing marketing six months back. [13:34] Mhmm. [13:35] >> That is why we have this pipeline now. [13:37] Do you have a lead investor already with a signed LOI? [13:41] >> So we already have, yes, a accelerator program, and that is with whom we are closing the transaction. [13:52] Okay. Vishal, do you have a signed letter of intent? Yes. Okay. So and do you have the final closing docs on the round, whether it's a safe or convertible note? [14:01] >> It is safe. [14:02] It's a safe. Okay. Got it. And and I guess what gives you confidence that you're gonna be able to close that next week? [14:08] >> We we have already completed the due diligence process everything. And and it is it is the final signing of the agreement, which is pending for tomorrow. [14:17] I see. I see. With this $200,000 investment, what do you think it'll enable you to invest in? And what do you think you'll able to drive company revenue to from that investment? [14:25] >> So we have been all I'm coming from old school. So we have been always profitable. So whatever we were actually getting from the client, that is what we were investing. And this whole investment goes to marketing. Mhmm. [14:36] What's the team size today? How many full time? [14:39] >> Six [14:40] people. Six people. How are you profitable with six people, you know, paying their salaries with only 10 k of revenue? [14:46] >> It is all product team. It is it is all technology team. So we never had any marketing or sales guy. [14:52] Well, that's fine. But six people, if you're profitable, that means you're more than paying their salaries with your revenue, which is 10 k per month. And that means on average, they're making what is that $1,500 per month or about 20,000 per year salaries or this is this like really cheap labor somewhere or? [15:07] >> Yes. Yeah. [15:09] Okay. So [15:10] >> That is all all all in India. And and so the biggest hit would have been the biggest hit would have been if I see my market value. Right? So that is my investment, which has been going in. [15:25] So you haven't paid you haven't paid yourself? [15:28] >> Very less only my kitchen expenses, you can say. [15:30] Interesting. How do you I mean, this is a bit of a personal question, but it's very important when you're launching a company. How how low have you driven your personal living expenses so you can keep as much company, as much money in the company as possible? [15:45] >> I will say, I believe I've been still living well. I never had my lifestyle was, I kept it while I was at a height of my career as well. I kept it very simple. I don't have any mortgages. So before I made sure that when I actually opened this company, launched this company before that itself, I closed off all my mortgages. I had, no car loans, no house housing loans, nothing else. I think that in itself, [16:19] >> helped a lot because I kept my, those monthly expenses are actually my monthly expenses. [16:25] Yep, that makes sense. Well, we're certainly rooting for you on that note. Let's wrap up with the famous five. Number one, what's your favorite business book? [16:33] >> I've been reading one of the business books right now, which is [16:39] >> you say [16:42] >> We can [16:43] >> skip it. No worries. [16:44] Number two, is there a CEO you're following or studying? [16:48] >> I closely follow Steve Jobs. [16:52] Number three, what's your favorite online tool for building on wealth? [17:00] >> So [17:04] >> stigma is is what we use. [17:07] Number four. How many hours of sleep do you get every night? [17:10] >> How many? [17:11] Hours of sleep. [17:13] >> I I take eight hours of sleep, basically. [17:16] Number and which situation? Married, single, kids? [17:19] >> Married with a single kid. [17:21] That's great. [17:22] >> How old are daughter. [17:23] How old are you, Vishal? [17:24] >> I am 44. And [17:27] my daughter That's is great. Last question. Something you wish you knew when you were 20. [17:33] >> I think [17:37] >> I would have spent more time in technology tech then, right, which I got to now since last five years. [17:49] Guys he was a technology executive in HR, but use those salaries to build up a nice personal nest egg to make sure he could pay off his mortgages, pay off all his car loans, pay off everything so he could take the risk and launch the company which he did in 2019 called umwelt dot ai. It helps HR managers make sure their employees are happy so they retain them. He's got 16 customers today. Those are companies that [18:08] pay for 16,000 seats on his platform that yields $10,000 per month in revenue or $120 of ARR. He's kept the company lean eight people or sorry, six people full time out of India, paid himself very little about to close a $200,000 pre seed round at a 3,000,000 post money valuation. We'll see what happens next. Vishal, thanks for taking us to the top. [18:28] >> Thank you very much, Nathan. Nice speaking to you. [18:31] 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 [18:56] 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 [19:18] 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 [19:40] 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 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. [19:59] We gotta 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.