How Umwelt.AI CEO Vishal Chopra grew to $224.7K revenue and 16 customers in 2024.

guys he was a technology executive in HR used those salaries to build up a nice personal NASDAQ to make sure you 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 pay for 16 000 seats on his platform that yields ten thousand dollars per month in revenue or 120 Grand 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 precede around at a three million post money valuation we'll see what happens next hey folks my guest today is Vishal Chopper he's a seasoned professional with two decades in nature a leadership coaching and mentoring a former HR head turned teacher preneur he pioneered umwelt dot AI to empower CEOs and chros in shaping a future ready people first culture using AI his expertise Drive Employee Engagement and retention through Tech driven insights transforming workplaces for lasting success so shall 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 uh so these are large Enterprises uh basically from different Industries uh normally service Industries uh which are highly I would say employee intellectual dependent right uh so basically these are the companies which would have uh large intellectual property uh in terms of employees uh knowledge base and uh they are largely dependent on the employee actually to serve their customers well let's let's 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 use you yeah so so uh the users uh for having the interaction with the employees throughout the journey and understanding the behaviors behaviors needs experiences within the company and we also so we use behind Behavioral Science behind it to understand the psychology of the employees and their experiences within the company uh proactively generate the alerts uh to the CEOs and HR leaders to understand that uh what is missing in the organization what employees are looking for and how I they can actually retain and engage their employees proactive okay let's you didn't use the word puma in any of those sentences so let's talk specifically again about Puma so so for example does Puma's uh this Puma's onboarding and recruitment team use you as an applicant tracking system oh uh so this is this is experience analytics right that means that uh similar to employee experience feedback uh the customer experience feedback right what uh 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 uh uh the points that matters to the employees Journeys uh we want to have an interaction with them we also can you use can you 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 yeah Uma does Puma does quarterly employee reports the Puma HR managers use let me just um let me just give you an example so you understand what I'm trying to get at right is unwell 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 the you know the team members to hit their bonuses for example okay uh so I will talk about varamoda specifically right here again the similar client retail uh so we help them to actually uh write at the point of the onboarding of the employee itself they go through the induction process right now post-induction uh we uh so our boss name is Nikki uh so Nikki goes and interacts with them uh and understand their experience how their experience has been throughout the induction process so that would involve uh from the company's perspective they want to deliver uh 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 uh leaving the company as well I say and we will generate these insights to the CEOs hras all the HR Partners uh to take those actions and rectify those problem areas speak to the employees and you keep them engaged and working with the company understood what is the average customer pay you per month to use this kind of Technology uh so it is it is 0.5 to uh one dollar per employee per month okay so what is the average size of a customer that's using you then in terms of number of employees uh employees to 10 000 employees okay so so let's pick a midpoint there let's say 7 000 is the average team size at Point at 50 cents a c the average customer is paying you 3 500 per month is that a fair average okay interesting okay give us the back story here when did you launch the business uh so we started working I started working on a world order in 2018 and we launched on uh in 2019 July okay how did you get your first customer do you remember uh yeah it was best seller which is better mode only Jack and Jones selected these are all the brands belonging to the same group right so uh it was it was it is a huge group with all these retail apparel branch oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS 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 the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to 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 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 not built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed around 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to 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 going out right now and you're raising your seed round well 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 data set of SAS valuation than what you can get now inside of founder path 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 if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation 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 all right let's jump back into the interview how did you land that customer though that's a big group to get as your first customer usually big Enterprises don't don't work with startups I come from the Asia fertility so so I know a good number of chros my ex colleagues right so I went to this idea to them and uh 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 um if you if you see right from Google's or Facebooks everybody is facing that challenge that uh how to interact with the employees and how to actually preempt that what exactly is their experience uh listening to the voice of employees very important to them understand do you remember what the contract size was on that first customer uh so it was uh around 20K annual okay interesting and and have you sensed increased or decreased prices generally how did you make the decision that 20K was the right price to go out to the market with back in 2019. so I looked at my cost very specifically so I didn't want to actually started it so so it was very specifically looking at my cost uh as well as the market competition I wanted to actually make it uh so the uh keep it very very lucrative right so so one of one of the things was only not when when we use the word AI uh typically what happens to the mind uh is that the price is going to be 10x but I wanted to keep it 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 a deep voice understood so that was your first customer fast forward to today four or five years later how many customers are you working with So currently we have a around 15 000 paid users uh we do not uh take number of customers uh into consideration but paid users so it is 15 000 paid users what we have right now uh working with 16 Brands right now friends we want to 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 fifty six thousand dollars a month in mrr today is that accurate uh no uh so we are at a monthly average of around 10 000. 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 uh it is it is the uh uh listen um yeah ten thousand dollars per month or about 16 companies would be 625 per month per company on average but yeah and 625 625 dollars per month at a dollar per seat per employee would mean that each company is actually about 600 big not an average of two thousand to ten thousand employees like you shared earlier correct yeah so so few few of these companies form under the group so we we when we accumulate uh the number of employees we actually calculate at the at the group level not at the company level okay got it so Mrs 10 000 per month today um I mean the obvious question is you started working on this in 2018 2019 this is a very small amount of Revenue uh 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 uh so I I'm still with an idea to be verified uh uh so the kind of Technology we were building and we wanted to keep it really cheap so we invested a lot on building the technology itself how much have you invested so far so we have uh invested uh around so I'm just converting it to USD right um so it would be around uh 200k how much of that was your own money that was that is all bootstrapped so we are we are currently bootstrap so that 200 000 where did that come from that's just company Revenue well it is all customers money so so we we invested reinvested reinvested the customer's money so you didn't put any money in at the store and you haven't raised any external Capital today so so we are raising our first PC round right now uh that is as we speak the next week we are closing of the transaction okay um how much are you targeting in the round so we are targeting 200k right now okay at what valuation our evaluation of uh three million right how do you defend evaluation you know an investor is going to say you've been doing this for five years you only have 10k of Revenue that's 120 Grand a year a three million Revenue multiple BS over 30X multiple and a compressed Equity Market how do you defend that valuation so we are looking at reaching one one million dollars within the next one year why would anyone believe that though when it's taken you four years to attend K of mrr we already have the pipeline information oh yeah we probably felt good about your pipeline two years ago too what proves or what do you point to to say hey investors I can execute this Pipeline and close it we never had a pipeline earlier we were never marketing so it was all the uh clients through the reference uh what we were getting and we were building the product along with it right today we have reached to a level we are exactly uh we we have started going uh to the market and actually started doing marketing six months back that is why we have this pipeline now do you have a lead investor already with a signed Loi so we already have uh yes uh I accelerated program uh and uh that is with whom we are closing the transaction you know talking about Michelle 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 it is safe it's a safe okay got it and and I guess what gives you confidence that you're going to be able to close that next week uh we we have already clear uh completed the due diligence process everything and and it is it is the final signing of the aggregate which is pending for tomorrow 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 about a drive company Revenue to from that investment so we have been also maybe 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 what's the team size today how many full-time six people six people how are you profitable with six people's peanut paying their salaries with my 10k of Revenue it is all product team it is all technology team so we never had any marketing 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 10K per month and that means on average they're making what is that fifteen hundred dollars per month or or about 20 000 per year salaries or this is like really cheap labor somewhere or yes yeah okay so all in India and and uh so the biggest hit would have been uh the biggest hit would have been if I see my market value right so that is my investment which has been going in so you haven't paid you haven't paid yourself very less only my kitchen expenses 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 low have you driven your personal living expenses so you can keep as much company as much money in the company as possible uh I will say I've been living I have been still living well uh I I never had my lifestyle was uh I I kept it while I was at a height of my career as well I kept it very simple I I don't have any mortgages I so before I made sure that when I actually opened this company uh launched this company before that itself I closed off all my mortgages I had uh no car loans no house housing loans nothing else so I think that in itself uh helped a lot because I kept my those monthly expenses are actually my monthly expenses yep that makes sense so 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 uh uh in Reading uh one of the business books uh right now which is uh you say I don't remember we can skip it no worries number two is their CEO you're following or studying I closely follow Steve Jobs number three what's your favorite online tool for building um wealth uh so Sigma is what we use number four how many hours of sleep do you get every night how many hours of sleep I I picked eight hours of sleep a number and what's the situation married single kids married with a single kid that's great how old are you Vishal I am 44. that's great last question something you wish you knew when you were 20. I think uh I would have uh spent more time in uh technology take them right which I got to now since last five years guys he was a technology executive in HR used those salaries to build up a nice personal NASDAQ to make sure you 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 pay for 16 000 seats on his platform that yields ten thousand dollars per month in revenue or 120 Grand 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 preced around at a three million post money valuation we'll see what happens next Michelle thanks for taking us to the top thank you very much Nathan nice being to you one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS 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 our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m 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 SAS World whether it's an acquisition a big 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 though largest private slack Community for B2B SAS 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 for that at nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 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 we got to push them away click the thumbs up below to counter them and know that I appreciate your guys's support alright I'll be in the comments see ya