How Unilogcorp CEO Suchit Bachalli grew to $55.6M revenue and 290 customers in 2020.

hello everybody my guest today is suchit bachali he is the ceo of economy called unilog a global technology company which specializes in e-commerce solutions and enriched product data for the b2b marketplace under his leadership the company is now a multi-million dollar business with 800 global employees and hundreds of customers across diverse industries sushi are you ready to take us to the top absolutely am and thank you so much for having me nathan you bet okay tell me about the company uh first of all i'm interested obviously what does it do and then secondly is it a pure place sas model or is it pay-as-you-go or something else uh so the company is 19 years old and that's what some people don't realize is that we've been around for a long time we've had some changes over the years and as you can imagine unilock today looks nothing like what unilog looked 15 years ago and that's the fun part of being an entrepreneur and making sure you can pivot every economic cycle so unilog started out as a content service provider and by that what i mean is we were providing product data and content to e-commerce websites eventually we started noticing that the e-commerce websites were running off of pretty archaic e-commerce platforms and that there was an opportunity to create something that was radically different and so our product was born the e-commerce platform was born which very recently forester ranked as a strong performer on in their in their wave assessment so we went from being a full services company to being a uh a product platform company and that has been the the biggest focus of uh the last four or five so are you a pure sas company today so on the software side yes so the software is offered as a pure sas model we have no on-prem we have no software that gets deployed in any other way other than um sas okay and and what portion of your total revenue is sas versus everything else so that transition has been fascinating for me to um to lead and also to watch um our this financial year which ended march 2018 um our this was the first year where the revenues were 50 50 split so 50 of our revenues came from pure place software and then 50 of our revenues came from services okay very cool and um let's just focus on the sas kind of side of the business for a second without going down every kind of customer cohort on average what do customers pay you per month for your software a typical customer you know starts out at about you know they can go from anywhere from eight hundred dollars a month in in monthly spend on the sas platform all the way up to uh ten twelve thousand dollars a month in annual in monthly spend for the for the sas platform really depends on what size of catalog they have how much you know horsepower they need on their e-commerce sites how many sites they have etc but that's it's a it's a large range but that's typically where um where where we would sit okay so i mean would you say the average is more like 800 bucks a month or more like 10 grand a month i would say the average is probably right down the middle i would say the um average sas uh for from our modeling perspective we would say you know 4 500 to 5 000 would be the average got it got it fair enough that's good and you said founded 19 years ago so 1999 are you the founder i was not my father started the business as a services company i joined uh in 2002 when there were still only about a handful of employees uh and then i i joined um in the company and then we ramped it up all the way to where it is today that's great and and where is it today how many customers are you serving we have uh overall just shy i would say for about 400 customers uh all of them are a large and you know mid to large enterprises and so um that's that's our typical customer and those 400 i i just want to make sure since you have different revenue lines those are all on the on the sas side correct now on the on the sas side um our customer count would be about 290. 290. okay great that's good still healthy i mean if you got 290 and your you know you know average monthly payment is four and a half grand i mean that puts you at like a million three per month is that accurate that would be close to accurate i think again um because we are averaging um around that number it it puts us in up in the about you know 10 million irish bracket that's your that's your run rate today that's that's close to our unreal again but i would say the range is you know eight to twelve okay fair enough very very good and that's just the sas side correct correct does not include any services or anything on those lines yeah so let's say minimum there are eight million run right today we could essentially double that and say call it 16 minimum total when you add services on top for last year yes yeah that's great and what do you think that ratio will be moving forward this year is it gonna be like 60 40 or 80 20 or uh the sas is the fastest growing um piece of the business we're we're doing a keger of about um 40-ish percent um and the next four years were our keger is 32.5 so we've grown significantly but obviously from a smaller base because we're the product's been out about three years but now i think we're looking at at a much larger base and then growing from there yeah so if you're doing called a 10 million run rate today on the company if you go back a year in october 2017 what was the run right back then just on the sas side so on the sas site i think uh we would have been in october 17 we would have probably been at about um i'd say 5.7 to 6.2 so doubling i mean that's pretty healthy growth is most that growth coming from converting old contracts to like sas or is it new customers you're adding altogether uh eighty percent would 90 would be new i mean we we our churn is uh less than less than half a percent per year per month per year and that's annual our logo churn i'm sorry revenue or logo churn both uh in in terms of because our our contracts are because these are enterprise sas deals and we're literally providing and powering the face of the company on through that e-commerce site and all the revenue flows through there it's very sticky in terms of the quality of the revenue that we have and um so the churn is minimal negligible to to to nothing that that point five percent is that gross revenue turn though or net are you adding back expansion we are i mean so um uh it would be uh you know uh expanding expansion on our on our logos as well as on revenue and then taking off uh maybe one that we might lose okay so then you would be with 0.5 net revenue churn that basically said otherwise it basically means 100 net revenue retention annually that's correct yes yeah um interesting that's great walk me through the team what's the team size today so i have you know we we were we implement entrepreneurial operating systems so we started that process about 18 months ago so i have a core leadership team uh that is about nine people that is finance and sales which i think are the real drivers to our company and they're pretty much in lockstep and i think that that's very very critical to have a strong forecasting ability right as a company to be able to tell very accurately what the next six or eight months look like that's very important so finance and sales are my two critical leaders i have marketing which is led by an industry veteran i have product and then i have a couple of other functions that aren't professional services and support so total team size is what so my direct report's about um not direct report your total team size the whole team oh the whole company yeah oh we're we're just under uh just on the software side we're about 210 people 210 and where's everyone based about 40ish i would say are north america the others are india we have a development team in minsk in belarus and we have a couple of other offshore people in canada as well as in australia so i'll spread out that's great and then last economics question here so when you look at you know grabbing and finding a new customer what are you willing to spend to acquire a new 4500 a month customer our cost of acquisition tends to be um it tends to be a little hard to track because it's a true enterprise software sale so it's not uh comparable to sort of consumer sas products where you could say hey i'm spending x amount of dollars in web advertising and marketing most of our sales or cost of acquisition is actually direct cost so it's the cost of our sales team and uh or cost of of our sort of larger marketing budget um you'd be surprised to know that our sales team is actually just three people yeah but just be clear i mean listen i've interviewed about three or three 3000 b2b ceos they all know their cac it's not consumer model i mean so i mean when you factor in your sales team and everything your fully weighted cac would come out to be about what um i would say that our fully weighted cac in order to run that um 4 500 a month deal would probably come come to about um the you know cost of about uh i'd say about two and a half to three thousand dollars um okay so you have a one month we have a one month payback period then yeah so on our payback period it's usually uh 40 days ish uh 40 45 days because we're we're essentially considering that um on a on a typical sale cycle which is about two and a half to three months a sales rep is is probably uh spending on average uh about 60 to 70 60 hours right so i'll take that and then i'll take some other costs associated with it and i probably come out depending on on the average and some some sales cycles are shorter i'll probably come out at about that um four to six thousand dollars yeah and is the company bootstrapped have you raised the only capital we raised was three million dollars from calorie capital ventures uh in 2015 and um at that time we had no sas revenue so their return on equity has been phenomenal that's great are you looking at raising currently um we are always open to ideas we're always talking to a lot of people obviously given where we sit we get pinged a lot um by by various groups we're always open i think right now we have really strong cash flows we have uh strong balance sheets we're ebitda positive and so for us it makes sense to continue to build value but we're always open to the right partner yeah if you if you did have if you did raise capital to reinvest in growth what chunk would you want to do it and how much would you want to raise an ideal world i think the next raise would have to be would have to be meaningful right i think what we've been able to do with just three million in outside capital um would be uh i think the next race would have to be meaningful and by meaningful i i mean you know in the uh 20 to 40 million bracket yeah and if you raise 20 million obviously don't talk about your actual valuation but if you did raise 20 million what valuation would you like to see if you raise that much i think you know my my sense of valuation is that it's it's it's it's it's eventually the price at which the deal gets done the the value of the company is really dependent on how much demand we can generate uh during a process i think that uh generally uh we would fall uh in that in that in the market um multiple uh of you know uh four to six times of of our revenue and and how so if we just look at your sas right call it 10 million make the numbers easy that'd be 40 to 60 million pre but you also have an additional kind of 8 million a year or north of that and services so how would you value that on top of the 60 i mean the service revenue is is not very valuable from a from an from an investor's perspective you know it's 1.1 times to 1.2 times is probably what you would expect so 20 million raise or maybe 60 or 70 something like that would be a kind of a sweet spot for you yes interesting good stuff all right let's wrap up your sushi with the famous five number one what's your favorite business book uh it's actually uh right now uh the last year i've been most influenced by attraction yep number two is there a ceo you're following are studying right now mark benioff and number three what's your favorite online tool for building your business um i have a few i i think confluence is uh is right now my top number four how many hours i sleep to get every night uh about six that's pretty healthy and uh walk me through how busy are you how many kids you working with um i have one daughter she's seven but but outside of that i have um i teach entrepreneurship at a high school level oh wow so uh january through june i run a pretty intensive um pretty intensive curriculum for high school kids in the in the local philadelphia area and we do it through part of the nonprofit that i belong to called thai that's a board of thai so i do that great sushi and how old are you i'll be 40 in a couple of weeks that's great so last question here what do you wish your 20 year old self knew um that i'm going to be just fine guys everything will be fine coming from sushi again company founded back in 1999 today doing north of 8 million bucks in sas revenue another 8 million in services each year they've only they've done built that growth on just three million raised serving about 290 customers again on the sas size 100 net revenue retention annually spending about three grand to acquire a new 4500 a month customer so basically one to two month payback period there a team of 200 people based 210 people based all over the world sujit thank you for taking us to the top thank you so much take care