Uploadcare Revenue & Funding (2024)

hello everyone my guest today is igor dibatur he is a ceo at upload carries the second time founder previously scaled a web dev agency to a million bucks in gross revenue he's passionate he's a passionate back country skier and mountain biker based in st petersburg russia igor are you ready to take it to the top yeah all right thanks for joining thanks for coming on man all right tell us about upload care what does the company do and how do you guys make money uh basically we've taken the entire mess and complex world of file uploads processing servers content delivery networks and reduced it to a single api it was a solution for one of our major paints because until we developed up upload care we had a web development agency and launched more than 150 different products upload care is like a next level cdn that adapts content to end user context so it means a lot to us where a user is located like with traditional citizens but also we optimize the content because we know their browser the device etc we know a lot interesting okay so um who i mean paint the picture of your kind of average customer who's your power user uh we have a lot of smbs using upload care and also a lot of enterprises so the good example of the user is a cto who already tried to build a file infrastructure and since it's a lot of pain he wants uh to find a better solution and they found us and in terms of business verticals uh a lot of software resources using upload care like crms event scheduling and uh marketing automation services and also with uh online printing shops and e-commerce marketplaces classifieds do you compete with like with like uh with like file stack yeah file stack is a copycat of upload care okay they copy you yes who's winning who's doing more revenue uh i think they do more revenue but they had like much more invest investments how much have they raised uh several millions okay what have you raised right now they are backed by rackspace founders and uh we raised uh four and fifty uh 450 grand okay 450 000. that's great okay so let's look at let's go back to your business here for a second so what does the average customer pay per month uh the average customer pay per month uh 105 105 us dollars yes and about how many customers have you scaled to today uh right now we have uh 870 okay 870 that i mean that's good so that that would put you at about 87 000 per month in revenue is that right yeah that's good well hey congratulations on getting past the million dollar run rate mark that's a big deal yeah it's really a big deal i like the fact more though that your arr to funding ratio is two to one you have double the amount of revenue annually as what you've raised yeah and we target to scale even more until we fund raise that's good okay when did you when did you launch the company what year uh the initial idea was in 1211 and we launched the company in 20 2012. okay but so we started to get money from our users in 2014 and it's it was still like not a startup but uh another product of web development agency so i and my co-founder concentrated on upload care in 2016. okay and walk me through growth so you're doing kind of 90 000 per month today what were you doing 12 months ago oh let me check sure what tool are using the check uh i have a spreadsheet like a dashboard okay where i have all the information and also we have stripe but uh in stripe we have only recurring payments and we also have invoices and annual payments so the dashboard is better uh solution yep yeah just a second take your time [Music] okay it was about 50 something 50 okay so you're you're almost kind of 80 90 percent year over year growth yep that's great and then do you do you have on that spreadsheet what you finished how much did you do in december of 2018 uh december 2018 we were doing 78. 78. okay good that's nice growth so so break down the mousetrap for us how are you finding new customers uh we have a lot of content we have open source libraries for example in upload care we created uh the fastest uh image resizing algorithm in the world and it happens it's a good way for us to jump on top of hacker news or another like reddit also we rely on soft search engine optimization and until now we've grown organically okay right now we want to build a sales department finally because we need to scale and i see a good potential if you hire account executives at the beginning well it break down like a specific strategy though so let's let's focus on the y combinator one right so what when did you post on y combinator and how much traffic did you see from that post ah it's very different um right now i think i'm not the best person to find out how exactly much traffic we get from hacker news but we get a lot of social proof when we went on top of hacker on top of characters but do you remember that day i have the post up here it was august 28 2017 the subject was how upload care built a stack that handles 350 million file api requests per day um you got 130 yeah that's one of them it's a stack share post originally yeah yeah yeah but but i mean you did well here got 135 upvotes on hacker news do you have any idea that day how much traffic at your site and how many new trials you signed up um i need to find out but it was at least several thousands of good traffic visitors of with good results good parameters like time spent on site et cetera yeah okay so drove somebody without uh i remember about five to ten really interesting prospects uh and most of them became customers yeah five to ten prospects that's good that's good um okay very good anything else you're doing today i mean you said organic and inbound is there any particular keyword that you're really proud that you ranked number one for on google search like upload api if i remember correctly is that is that a really competitive keyword it's not really competitive but we do have some competition and we get some traffic from this keyboard we have several more yeah no this is great so by the way i just typed upload api into google so file stack pays for the ad on that keyword but you rank organically number one yeah so so that's good so what i mean are you do you have an seo background uh sorry regarding file stack just uh um we another uh source of getting new customers is someone who already tried different other solutions like file stack and migrates to upload care and for file stack we even created a special uh script and posted it on github because it's pretty common uh where someone from file stack come to upload care yeah why is filestack doing so well why are they bigger than you is it just i mean it's just because they have more money or what do you why do you think they spent more money they participate participated in y combinator but then their founders uh left the company so now file stack run run by external ceos hired ceos yeah interesting okay very good and then talk to me more about your company so you've only raised 450 grand are you profitable today yes okay like like 10 to the bottom line or 40 or more uh we spent everything on getting new hires every month highers or marketing experiments so we don't uh store cash so your break even basically zero yeah we basically break even okay and what's the team size so we can get what what's the team size today the gym size is 20. 20 people and where's everyone based uh some of them based in cis countries like russia and ukraine and like belarus okay and we also have a people in poland and indonesia and in washington dc okay very good i mean this is great what about churn turns critical in this space what's your turn look like uh our logarithm is about two and a half percent but uh uh since we are uh we have negative revenue we decided to find out why our turn is like two and a half percent uh what happened and we found out that the middle middle like check of our churned customers is about 25 to 35 bucks so we don't churn larger larger customers yeah so what is your what is your rout your gross revenue churn annually uh we have negative revenue well no gross so you can have net negative because you're adding back expansion revenue but what is your gross revenue churn per year do you know uh not not sure i need to check that's okay so when you let's just go to the number that you're talking about which is net negative churn how negative are you about 110 115 okay so basically what that means is let's say whatever you're churning in revenue you're making that up and an additional 15 on top of that so your net revenue retention is 115 annually yeah is that right yeah yeah that's great that's good congratulations on that now why are people expanding what's the what kind of pricing axis do you drive expansion revenue on uh at this moment we have a like hybrid pricing model we have price and tiers and we also have uh price for overusage so you can pay for example 25 bucks and you get something and if you spend more like more traffic more uploads more storage you need more you need more you just pay for all your usage okay what's the usage based off those literally number of api calls per month uh it's a traffic uh storage amount and the number of uploads okay store just storage amount measured by what just terabytes gigabytes gigabytes okay and then uh sorry what were the other ones uh traffic okay based off just unique website unique hits and tell me how they're measured so traffic that just based off unique hits to the traffic is uh outgoing traffic in gigabytes okay okay and then what was the last one [Music] the number of uploaded files okay and that's just a that's not storage it's just like literally you've uploaded five images this month versus five thousand yeah it doesn't count okay very good good so you have three kind of ic axes there that are utility based to drive expansion revenue you have a 150 net revenue or um expansion annually which is good and then what is your fully weighted car do you know your fully weighted cost to get a new customer uh fully rated what you're fully weighted cost to get a new customer uh since our growth is organic we don't really know we don't measure it but it's we want to target about to 300 about 300 now obviously you have employees focused on seo and optimization and free tools and things like that so you would include obviously their salaries as a marketing expense when you're looking at fully weighted and you're saying you'd be happy with up to a 300 acquisition cost for 100 a month customer yeah but right now if we like wait all our signups and active users and divided by the salaries we pay because we we don't have to too many people working on it the number will be really low but if you want to scale this process we will need to pay for paid channels for lead generation and the number will change yeah yeah no that that makes good sense all right good um and when do you i mean do you plan to raise capital here in the near future or no uh right now we are fundraising the fundraising two million okay so you're raising two million and what valuation do you hope to raise on uh our current investor told something about uh 20 million cap and 20 discount oh so you're gonna do this on a convertible note yeah we are thinking about convertible node but right now we are getting feedback maybe the multi multiple is too high and uh we are in the middle of conversation with different vcs about different options yeah would you ever i mean so you're doing what is you're doing a little over a million a year right now in revenue i mean would you ever do a smaller amount and do something like venture debt so take 500 grand but no dilution uh no so you definitely want to take two million dollars uh we don't want to fundraise in nearest six months it would be easier for us to get more money and uh for 18 to 24 months that's what we were thinking about in the very beginning it makes sense to get less amount of money but yeah well fundraising though takes up takes obviously time and raising two million dollars you're giving up equity what i was asking was there are there are places that will give you money without taking equity it's essentially alone like uh falls from lighter capital and uh sas capital espresso timia hercules there's a lot of firms like this would you ever do a deal like that or no or why not uh it makes sense but uh to do so we would like to get a scalable sales channel for example if we if you build our sales department and we can scale it then we can get uh depth capital like we can we can get some money and uh make them to get more money yeah but uh right now it's a it's a risk yep let me ask you a different question here uh do you own a majority of the company more than fifty percent uh me personally no because we have three co-founders but co-founders have more more than 50 percent okay so it's kind of like 30 30 30 and then you know 10 with investors or something like that investor has more yeah because a lot of time building upload care but so we still have much more than 50 if someone came to you and offered you like three or four x to just buy the whole company so three or four million bucks would you sell uh file stack already try this uh okay what they offer uh about uh five to six uh uh multiple and you said and why did you guys say no we for a sake of fun we said about 12 and then what they say back too much but i mean five to six million bucks though is still a pretty good multiple for you guys but you still you just didn't want to sell yeah we see a good opportunity to out-compete them and several others because the market is great and it's just growing i think we are in the beginning of something uh no one wants to build uh no one's want to write code anymore everyone wants to build products so use serverless technologies and we are like on cutting edge of this yeah yeah would you if they if if they offered to invest strategically a million dollars in you for maybe 10 or 15 would you take that deal or no you don't want to be aligned with them uh at least we can talk yeah yeah interesting very cool well listen we wish you the best let's wrap up here with the famous five number one what's your favorite business book i i see the this blue book on there oh that's my that's my book though you can't you can't say that one i already read more more than half oh you've already read it oh that's amazing do you know be honest be honest with me are you are you liking it or you think it's total trash i like more than half more than 50 percent good and i i actually did about 10 um and 10 notes so yeah it's useful that's good i'm glad i'm glad you feel that way that's good to hear all right so besides mine besides mine what's your favorite business book uh it's hard things about hard things yeah number two is there a ceo you're following or studying right now uh number two what is there a ceo you're following or studying right now ceo i can't speak again it's okay is there a ceo that you're following like someone you're studying ah no not really i try to rely on like fundamental literary literature etc to build my own vision of what i want to do so i'm not following anyone number three what's your favorite online tool to build your company uh workflowy okay and uh number four how many hours of sleep to get every night how many sleep um i have a newborn daughter and uh if i get seven hours it's good so what do you get i bought seven seven hours okay good good and then so what's your situation sounds like married one kiddo or you have more i have one kid one kid and how old are you igor i'm 32. 32. last question what do you wish your 20 year old self knew um i don't know if i could use something that will that would change everything uh if i if i would learn how to focus properly it would save me about four years of time guys learn how to focus concentrating on only one thing instead of two instead of three things i concentrate on one things it's yeah the best i i the best thing i learned in 10 years guys upload care just passed a million dollars in terms of run rate up from just 50 000 a month a year ago all with only 450 000 in funding 870 customers paying 100 plus per month again they're helping with kind of content ingestion and delivery api you can upload your files your media files and manage those at scale hundreds of millions of api requests now so they're growing quickly looking at potentially doing a new fundraise maybe raising two million bucks on a 15 or 20 million cap they've got net revenue retention of 115 percent and are going to scale paid models up to the point where they've got a cac of about 300 bucks so three month payback period there igor thank you for taking us to the top thank you nathan