Verifiet Revenue & Funding (2024)

[00:00] Verifiet.com. It's fraud prevention in the B2B space. If you're trying to do a deal with a steel manufacturer in China, he'll tell you if they're legit or not. Same thing in the oil industry, very prevalent, considering what's happening with sanctions in Russia right now. They're doing business with 27 customers doing 7,800 per year right now in terms of run rate revenue, each customer paying on average $24 per month with consider raising $300,000 at a $3,000,000 valuation [00:23] selling it, know, call it 10% of the company's look to scale. He wants that credibility in the marketplace right now with his team of two as they launch. Hey folks, my guest today is Farhan Afsahi. He's a 22 year old started his first startup when he was 18, which is a hybrid of Zoom and Moodle. It was called Edpex that now he's working on building a web hosting startup called XGrid and then sorry, he did that. [00:43] In the meantime, he learned a lot about design and software development now working on verifiet for the last ten months. That's verifiet.com. Farhan, you ready to take to the top? Yeah. [00:55] >> Sure. What is verifiet? So verifiet, basically, it's it's like Stripe, but for verification. We provide verification APIs for b two b companies that want to learn more about other companies they want to work with and get the company information like company status, registration date, and other data that they might need to verify the legitimacy of the company they want to work with. So basically we're building this service for enterprise type customers because because of the regulatory [01:30] >> requirement that they need to, like, abide with, like, that was set forth by the governments. Yeah, that's basically it. [01:41] Farhan, what's your unique mousetrap here? There's a lot of companies that sell data on other companies, ZoomInfo, Bombora, Cognism. There's a lot of them, you know, Clearbit. What's the unique piece of data that you get that nobody else gets or other people have a hard time getting? [01:54] >> So they're not a verification and fraud detection company. So we're focusing on fraud prevention mostly and verification part of the job. So they they don't they're not mostly connected to company data sources, government data sources, but we are. [02:13] >> For example, you want to work with a company in China, you're based in The US, and you want to learn more if you can trust the company you want to work with in China. You just enter the name in our program and it will give you a basic score that whether that company has any type of red flags or not. So ZoomInfo or Clearbit and other types of like these type of softwares are built for sales [02:37] >> mostly, but we are building this for fraud detection and verification. So we are mostly providing red tech. [02:46] Understand, same question though, right? There's a lot of people that sell data, buy data from other people, they package it up and your IP is actually how you package the data. It's not the unique data source you get. Are you getting any inputs? Are you getting any data that you feel like is unique to verifiet that other people are not getting? [03:01] >> So the problem right now for example in a red tech is that most of the verification is take too long. And also for example, data implementation takes a lot of time, for example, for enterprises to have real time information, so getting real time information about a company that was registered yesterday is a bit hard. At the same time, current fraud prevention companies are focusing on e commerce fraud, but our main focus is on B2B fraud. So, [03:35] >> we get, right now we have access to over 300 data sources. [03:40] Farhan, what's an example [03:41] >> of B2B fraud? So, for example, an example of B2B fraud is that you want to verify a company in China, you want to buy some steel, for example, from a manufacturer in China. There are some vendors involved in the process and you want to check if those companies are registered correctly, if they are not impersonated by some type of scammers or fraudsters, if they're not in any kind of sanctions list or money laundering list. So basically, [04:14] >> it's part of a due diligence that you're going to do. We're providing that due diligence for you. And, yeah, so for example, one of the things that we prevented is B2B impersonation fraud. Like, for example, right now in the oil industry, because of the Russian Ukraine war, there's a lot of fraudulent activities happening that companies in like Ukraine, Russia, and UAE, Turkey, some sort of other countries like these in these regions are, for example, copying the [04:54] >> data from a US company and impersonating them as a seller or as buyer. Catching this type of impersonation is a bit hard for a normal person Oh, or [05:07] 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 your [05:30] 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 get [05:54] 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 not [06:16] 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, 1,200,000 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 going [06:42] 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 you [07:04] 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 interview. [07:31] So Farhan, tell me your pricing strategy. What do customers pay on average per month to use your technology? [07:36] >> So right now, because we are building like APIs mostly, we will charge them per call, API per call. So, and also right now on the website, we currently are mostly providing our services to SMBs, but that was before we were launching our public APIs. But from now on, main focus is going to be on mostly developers and enterprises and tech [08:05] as Farhan, today though, what's the average customer pay you per month? [08:09] >> About 50 to $100 per month. [08:11] Okay, got it. And I guess tell me the story of your first customer. When did you close them? [08:18] >> About a month after I started working on verifiet. [08:22] Which was when? [08:23] >> About nine months ago. [08:25] Okay, so launched the company in 2022, got your first customer. Where did you find the first customer? [08:30] >> He was a friend of my father. [08:34] Ah, okay. Is your father in defense or security or fraud? [08:39] >> No, he's in the logistics industry. Yeah. [08:43] Interesting. Interesting. Do you, do you have any kind of cyber background or fraud detective background? [08:49] >> Not much. No. Not much. [08:51] Okay. [08:52] Got it. So I guess that was your first customer. Fast forward today, how many customers are you working with? [08:58] >> So right now we have about three eighty users. Out of those three eighty, about 27 are paying customers and our ARR right now is at 700 and sorry, 7,800 per year. Yeah. [09:14] That's great. Yeah. So 27 folks paying 75 a month would be about 2 ks in MRR. You just said, you know, 7,800 per year, but you know, so maybe, maybe the ARPU is more like $50, and the MRR is more like 1,000. So you're doing, you know, you know, 10,000 a year right now, something like that. Yeah. Yeah. I see. That's great. Well, congrats on getting this off the ground. Have you done it yourself? Or do [09:36] have a co founder? [09:37] >> Yeah, I have two other people working on this as well. So, yeah, we're working on building and launching every one of our APIs every day. Yeah. [09:48] Were you guys were you nice at the beginning? You split equity evenly or you took the majority? [09:53] >> Yeah. [09:54] >> No, no, no. Evenly. [09:56] Looking [09:57] back now, you're you're a year in. Was that the right choice to do it evenly? [10:02] >> Yeah. Look, normally I don't care about these things because these things always like this baits a lot of time. So we're going to put as much as output as we can. So let's just focus on building a product and getting more customers. So you know, I don't care about having 50% or like 33%. [10:21] Yeah, you will if you sweat for ten years and build it into a billion dollar company. [10:27] >> But we still don't have a billion dollar company. So let's, let's have a billion dollar company and then [10:32] Well, you can't change your equity split from 30 to 15. Once you have a billion in revenue, then it's much harder. [10:39] >> Yeah, but like, we're equals in this. Yeah. [10:42] That makes sense. That makes sense. I'm just pushing you. Okay. This is great. Now, have you bootstrapped the company or did you raise capital? [10:48] >> Bootstrapped. [10:49] Very cool. Any plans to raise or you want to stay bootstrapped? [10:52] >> No. No. No. We have to raise, But not for, like, having money reasons. Because, like, right now, we're working with, like, government offices that provide, like, API service their API services. When they do also want to check our company, if we have a good, like, backers, investors that will add credibility to our name as well. Mhmm. So one of that's one of the most thing as as a as in the same time to get more enterprise [11:22] >> customers. Like, for example, since ten months ago, a lot of enterprises and, like, banks like Wells Fargo, Maybank, Cheaper Cash, like Corner Shop, which is a subsidiary of Uber, [11:36] >> Shopify have visited our website. Some of them scheduled the demo to see how they want to use our products. So and they're eager to use it. So [11:44] So how much are you targeting for on the raise? [11:47] >> So right now, about, like, the normal precede seed round, so about between 200 to 500, so that's pretty much the same thing. And at the same time, in the meantime, we [12:02] >> need these type of investors in the B2B space because most of our customers that we're going to target are like fintechs, big fintechs like banks and to get in touch with these type of companies and landing them as customers having some sort of a connection to them. Of course, [12:20] so far, if someone offered you 500 ks out of 2,000,000 post money valuation or 2,000,000 cap, would you take that deal? [12:30] >> So 500 for 2,000,000 yen post money. [12:33] Post money. Okay. You're selling 25% of the company. [12:40] >> I don't think so. No. [12:42] You would say no. Okay. So what valuation are you targeting? [12:45] >> So as I said, like, example, 25% is a lot today, like for 25% of the company, 500 k is a lot actually. It's low actually. So if it's about like 300 ks for like 10% of the company, yeah. [13:04] That's not a typical pre seed round though, typical pre seed round back in the heydays, you're selling twenty, twenty five percent of the company, we are definitely not in the heydays anymore. [13:11] >> Yeah. So yeah, that's definitely something that when we talk to investors, we have to figure out. Well, you tell [13:18] me why are you worth 3,000,000 today? You're doing $600 $600 a month in revenue. [13:24] >> The reason is that that why we're worth this much is that our growth compared to some of our competitors, and right now the data quality that we have right now, actually is not common within our competitors, because, like, for example, none of our competitors provide any data from regions like China or Russia, Middle East, and we include all of these data in our databases as well. So these are the type of values that we offer. [13:56] >> And, yes, so the reason that we may be worth more than like 2,000,000 is because we're working on like, a new type of detecting fraud rather than traditional sort of detecting fraud and to, for example, to grow and get as much users and enterprise customers, we have to think about our later rounds as well. And if we spent, like give 25% of our company in the pre seed round, like we don't have much left, like in [14:32] >> the next rounds as well. [14:33] We'll see what happens. How many folks are full time on the team today? [14:37] >> Two. Yeah. [14:40] That's great. We're rooting for you Farhan. We hope it goes well. In the meantime, let's wrap up here with famous five. Number one, your favorite business book. [14:49] >> The Lean Startup. [14:50] Number two, is [14:51] there a CEO you're following or studying? [14:55] >> Normally, Elon Musk, Larry Page. [14:59] Three, what's your favorite online tool for building verified? [15:04] >> AWS. [15:05] Number four, [15:07] how many hours of sleep do you get every night? [15:10] >> About three to five. That's not healthy. Yeah. But like in these weeks, it's like that. Normally, it's about six to eight hours. [15:21] Okay. And what's your situation? Married? Single? Kids? [15:24] >> Single. [15:25] Yeah. Okay. And you mentioned you're 28? [15:28] >> 22. [15:29] 22. 22. Okay, what's something you wish you knew two years ago when you were 20? [15:37] >> Learning some of the skills that I need today. [15:42] Guys, there you have a verifiet.com. It's fraud prevention in the B2B space. If you're trying to do a deal with a steel manufacturer in China, he'll tell you if they're legit or not. Same thing in the oil industry, very prevalent, considering what's happening with sanctions in Russia right now. They're doing business with 27 customers doing 7,800 per per year right now in terms of run rate revenue, each customer paying on average $24 per month with consider [16:03] raising $300,000 at a $3,000,000 valuation selling it, you know, call it 10% of the company's look to scale, he wants that credibility the marketplace right now with his team of two as they launch. Farhan, appreciate you man, taking us to the top. [16:15] >> Yeah, thanks. So I appreciate it as well. [16:19] 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. 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