How Vervotech CEO Sanjay Ghare grew to $2.9M revenue and 200 customers in 2023.

guys vervotech.com helps people understand with a unique identifier what hotels are on what street with what internet at what pricing they launched in 2018 today do over 240 000 a month in Revenue up from about 150 000 a month just a year ago and what's great about this company completely bootstrapped 30 ebitda margins is the target 25 profit sharing plan with employees Sanjay really built a great company and excited to share that he sold the company just last week to Constellation group where he's now excited to thrive under the Juniper subunit there we'll see what they do next hey folks my guest day is Sanjay Gary He's a CEO and MD of vervo tech he comes from an engineering background as an industry veteran and influencer he leads and drives the company's vision for organizing the world's accommodation Data before starting the company he worked as vice president of the SAS company at taviska which is a division of JP Morgan and Chase for over a decade company today again vervotech.com which offers a combination data mapping products Sanjay you ready to take us to the top yeah thank you for having me nothing you bet so I want to make sure my audience quickly understands the niche you're in you know when we book our conference venues for SAS open we always get these reports from the hotel venues saying if you do you know theater style seating here's what the room could look like if you do Circle Style seating here's what it looked like are you the kind of technology that powers that sort of planning and mapping uh no not really what what we do is any travel agency who is selling hotels online Nathan they try to Source the inventory from multiple Hotel suppliers and you know for in order to get the best rates for their customers what we do is we do standardization so that when travel agencies are showing hotels and rates on their website they are able to show unique listing at hotels and rooms and rates okay I'm not sure I'm following let's try and use a real example uh if there's a big travel agent that's listing four you know hotels in San Francisco uh that are available tonight um I guess uh I guess why not just go use Expedia and find the cheapest price for the hotel in San Francisco yeah beautiful so let's say you go to Expedia and trying to find the cheapest price for a specific hotel when Expedia is trying to get the cheapest price for that hotel Expedia will go to 100 of suppliers to really give and out of those hundred may be the same hotel is coming for from more than 50 sources and there is no standardization there is no way to uniquely identify the same hotel from different suppliers so we help by assigning a master ID to each hotel where Expedia can recognize okay this is the same Hotel coming from supplier one as same as Supply two same as Supply 3 with different different IDs why can't they just use the the hotel name and the and the address of the hotel as a unique identifier why do they need to pay for vervo Tech to do that absolutely so you know the the way Hotel names are you know uh return and the printed you will find the same Hotel lean on the same street 10 times in many cases uh so the address is different one property may be just at the same address uh same road there may be a one property which is a five star with the same name and next to it there is a one star property with the same name so that information will not be accurate because guests will book something assuming I'm booking five star and they will get a booking in one star so that there will be a lot of complications because there is no standardization and I usually stay at the Triton Hotel in San Francisco I can't remember walking down any major city street and going there's a Hilton that's a one star and then right next door there's another Hilton name the exact same that's a five star I've never seen that is this a common part problem this is a very you know very common problem so you know when you look at let's say you know a Hilton or Trident it may be a five-star property or it's a chain property so there may not be exact same name but there are properties you know uh where this happens very commonly because if you look at the global accommodation data right now there would be more than three million properties across the globe and the problem may not be there for the top one which may be let's say you know uh you know 20 or 30 000 properties but beyond that there is again a challenge when someone is telling you this is Hilton and they're giving address and they're giving location the other supplier may be giving the same name which you can match but the address may not exactly match location won't exactly match star rating may not match someone may call Wi-Fi someone else will say internet how do you really map all this to show the things in a unified way I'm not sure I believe this is a real problem but your numbers can prove me wrong so I guess help me understand what a customer's pay on average per month to use your technology today yeah so we were in the SAS and the average fee ranges between twelve thousand dollar annually to actually hundred thousand dollars per year it depends you know based on the usage okay that's a big range though would you say the average customer is paying you something like thirty thousand dollars a year today uh no so average right now would be around sixteen thousand dollar per year but the customers pay between twelve to hundred thousand okay so six sixteen thousand per year so something like twelve hundred dollars per month something like that correct 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 evaluation 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 what's the back story here what year did you launch the company in yeah we we started the company back in October 2018. okay and uh the reason behind that so there was you know this problem is very old problem uh you know there is there are companies who had been doing this and uh we just saw some inefficiencies and like who who was doing it before you you too so you know there are actually 100 plus companies who are doing you know this name the top three yeah but now you know so uh one of them is a company called demonics who has a product mapping.works the another one is named called Data binder then there is another company uh you know whose name is matching uh so there are you know a lot more other companies who are doing this globally okay so you launched in 2018 and and how did you remember how you got your first paying customer uh yeah I think we got after seven months uh because the the product you know we just had six suppliers you know the top one which we targeted at that point of time and I think seven months later we got our first customers on the product that's amazing do you remember what that first contractor value was uh yeah I you know so it is it is actually one of the a good paying customer uh it would be paying around I would say 30 000 per year uh even now and is that what you that was at the starting pricing back in 2018 as well not really so the starting pricing has been very ad hoc and you know based on what customer is giving and their market so we kind of you know did that kind of pricing for two and a half year and then eventually what was that pricing Sanjay what was the first year contract value on your first customer uh just about this particular customer it was actually still the same they are still on the same pricing okay so I guess why haven't you increased prices but no so we do increase actually so what happens is uh we do increase the pricing but this particular customer you know they had a seven year long contract as an example with no pricing and in the early days uh when when you really desperately wanted your customer you do actually these kind of things uh now actually your pricing do change annually your pricing is public we have learned all these things eventually uh but some of our these great customers got the great deal from us in the early days so your first customer service and you're early I don't want to take a risk on you unless I can lock in this cheap pricing for seven years and you said okay fine I need the money sign here got it okay got it let's fast forward to today how many paying customers today yeah so we have uh around 200 plus paying customers which Powers more than thousand websites globally so can I take 200 times that average revenue per customer per month of twelve hundred dollars that would put you at about two hundred forty thousand dollars a month in Revenue today that's great where were you exactly one year ago so we can calculate a growth rate so we had been you know growing around 70 75 for last two years so a lot of growth has happened just in last 18 to 24 months because before that there was a pandemic which has taken away almost two years from us so 70 year over your growth if you're doing 240 Grand a month today that would mean you were doing about 160 000 a month about a year ago oh correct little less than that actually okay what's Driven that growth rate have you gone deeper into the same customers or have you added brand new net new customers we had we had added brand new customers interesting what's the growth Playbook how are you Landing these new customers inside sales outside sales you know outbound sales uh so so all of it actually we do a lot of events we do Google ads we do SEO we have inside sales team who is reaching out uh pretty much all of it uh we are we are a young company who is not shy from anything we are trying to do everything which can get as a customer now we love that I want to dive deeper into the SEO stuff here in a second but first have you have you capitalized the business bootstrapped or if you raise money now it's a bootstrapped company because the moment we started and within six months the pandemic or nine months I would say pandemic hit so I think that was a good idea uh we thought let's build the product well in pandemic uh instead of raising money now I love that and by the time the you know we're out of it I think we were good operationally from a financial standpoint okay congrats on food shopping Sanjay we love that um are you the sole founder you own 100 today no no so first of all you know there are other founders with me there are four uh you know other people on my leadership team but one more thing is we got acquired uh nothing last month by uh constellation software which is uh you know one of the eighth largest valuable software company in the globe yeah through its for your company Juniper group so we we love Mark Leonard we study all of his letters and you know he obviously doesn't do a lot of interviews so it's hard to quantify like why Founders like you love the constellation model tell us yeah absolutely and I think I will also answer that question on his behalf that he why he doesn't do a lot of interviews so when first time I saw the constellation website there was not even a photo of the founders and talking to them and they said we don't invest a dollar where there is no Roi so you know in headquarters sitting here we are all you know uh spending all back to support the businesses we're acquiring and we're not spending any money on anything which is not you know so it's a very Roi and uh uh I would say the the companies you know they acquired driven that uh you know so the second question why you know as an example why I liked constellation and why I had chosen to go ahead with them uh are two things one thing is they already have around 14 companies who are travel tech companies in their portfolio so there is a lot of synergy there where we are able to leverage customer base and best practices and so on and second thing is they acquire company they give you best practices support but they'll let you run things independently without any change in your culture the way you operate your brand anything so practically it just accelerates thing without really changing anything or without limiting what we really want to achieve somebody like Mark you know acquired over 100 companies at constellation you know actually building that Playbook so that when a new founder comes in like you they can give you the best practices in an easy to digest way is really important what's literally the structure of how they deliver that value to you is it a website with playbooks built in that's password protected is it a physical binder they send you how do they structure these best practices for you yeah yeah absolutely so first of all you know the constellation is really big with more than thousand companies now so they have six uh portfolios are not sending a few more and under each operating group they have portfolios so in constellation you know portfolio and in that there are seven operating groups one of them is Juniper group and now Juniper group is largely focused on travel take so Juniper group level there is a group CEO and the team who has learned everything from villain constellation and at a group level a lot of things happens like the events are are happening for products sales Finance where these best practices are shared so assets are all available but beyond that a lot of events where it's more focused towards learning do happen and at the same time I think one fundamental philosophy uh which is you know at constellation and I have seen in Juniper group just a month now is there is a huge transparency that means you know you get access to all the reports to your reports you know everything is really visible to you if you need any information from any of the group company things are very transparent which help you to quickly learn and decide so you could thank Jaime saster he's the CEO of Jennifer group and say hey I'd like to get the p l from the other travel tech company in Juniper group network and you can go study their p l and maybe learn from that I I haven't really asked that specific thing yet but you know as an example what is the typical marketing Spain what is the typical conversion on the companies so you know all that information you know I can talk to them and quickly get it I see so but there's not like a dashboard where you can can you can see everything real time against all the other 14 companies in Juniper group you know Sub sub operating group of constellation they they are and we are just a month into it we are still into getting integrated and I'm still getting access to some of those things I see I see I see and and how I mean um again Vista has a similar Playbook right uh and and they deliver this sort of value I mean they have a massive 150 Point checklist ranging from when to remove the sign from the company headquarters when you acquire it down to how to run an SEO Playbook down to how to hire um again how does constellation like deliver all of this stuff to you is it you just asking randomly or can you log in and see a bunch of templates somewhere in a website yeah yeah so all of that there is an internet where all of the assets and all these things are available uh and as I said you know I am also kind of new I got access to some of the things and I'm still exploring those things so we did the financial integration which is the first thing that I have learned already a lot of things so very simple you know structure of p l which is followed across the companies how the reporting happens how the dashboard and reports are available from a financial standpoint is really impressive and I'm looking forward now learn about product sales and marketing in the sites as well that's awesome that's awesome what about um obviously you know you're going to run a process you want to pick someone you culturally align with but you also have to think about price right so so how did the evaluation conversation happen how did you guys get to a deal price I think this was a much simpler conversation than you know one can imagine because from a constellation standpoint they have they acquire a business to retain uh so it is very very fair and methodology driven uh and we follow the same thing so I think that was really the simple conversation uh where we took some time is more of a strategic alignment how we are going to work together how we are going to grow uh because you know what we deliver back to Constellation or Juniper is one thing but I was more focused about what value Juniper group is going to add back to our take uh and then I think those things were Fair it's all win-win but promo Val standpoint I don't think uh it it might sound surprising but I think we closed all of the high level valuation numbers and everything probably in a couple of days because are we talking about like are we talking though like you know constellation tends to be fairly conservative yeah this figure might be more aggressive because they buy and flip constellation holds forever uh or usually forever um I mean are we talking like a 2X Revenue multiplier or like a 15x revenue multiplier can you give any kind of range it is it is not you know it can be any of those because it's not really on the revenue it depends on Revenue it depends on ebitda it depends on your team it depends on the size it depends on the growth attrition so there are just n number of factors it can be true or it can be 15 uh it's it's really the uh you know all of it where did you guys end up at you know unfortunately as a part of you know that that's the it's a non-uh disclose you know I cannot really disclose that one under the confidentiality of the deal uh but but I would say uh me and all are all of us are very happy about it so it's it's a good number in order to make sure you don't preach the confidentiality let me rephrase the question so you can give it in a way that doesn't talk about what you actually closed for when you were going into the acquisition process you personally before you even talk to Constellation you maybe had a number in your head how are you valuing the company before going into the acquisition processes yeah now so honestly I never thought of selling the company uh it happened just because I met uh Juniper group and constellation guys and I found a Synergy where we can grow into markets like Europe and South America where we don't have existence but they have a good companies uh we can grow very fast probably three four years faster than what you know we could have done otherwise yeah that's the reason actually we really got into acquisition talk to me a little bit more Sanjay one of the things Mark talks about in his letters is he says we empower the leader the leadership groups of the subgroup so Juniper group and then you down as the individual CEO with real real profit sharing to keep you excited you know to get you know the first step the second dip the triple dip like over time how does that funnel down to you and your team members in terms of you know Revenue share and Sanjay we want you to build this profitably that kind of thing yeah I think I think you know uh that that's pretty straightforward so you know I have so one thing is uh vervo take also you know follow the same thing so we had been always sharing the part of profit back to all the employees in the com what percent of profits did you distribute back to employees before the deal typically 25 but it also depends on our cash flow because we hear a bootstrap so we just started it from two years so we you know share it back with the employees anyways and you do that anyway yes okay pretty Financial year and it is outside your you know uh salary structure compensation structure at all I think Juniper also you know and constitutional does does the same thing uh which is pretty aligned that you you know that you know what is the value you are creating then you have the kpis okay so as an example for my marketing team or marketing lead also uh what is the you know how many uh New Deals they are getting or new you know potential customers they are getting and what is the cost per customer or for sales what is the conversion and what is the deal size per customer or for CEO what is the attrition because if CTO is looking at product if there is iteration that's the problem with technology so we have apis directly mapped with the leaders and groups and when we look at how we did in the year then just break it down okay at what part we did great that's where the Bonus Goes so it's in some years it can be department or unit can get a lot more bonus while other doesn't get anything that can happen too it's purely Performance Based but everyone understand and they have full control of what they want to achieve before you saw the company so in 2022 I mean what was your profit margin under here we're talking like 10 or like 50 60 percent uh no so we we try to operate around 30 okay 30 that's part of net income right bottom bottom line net profit it's a beta so you know yeah yeah that's great well congratulations that's excited to get the close done and eager to watch you grow inside of constellation uh on that note here Sanjay let's wrap up with the famous five number one your favorite Business book uh not Business book but my favorite book is good to Great number two is there a CEO you're following or studying it can't be part of consolation uh yeah so you know I think I have learned most of the things from Mahendra yadav who was the CEO of taviska uh where I worked earlier number three what's your favorite online tool for building Bravo Tech uh number four how many hours of sleep do you get every night sorry say that again hours of sleep each night uh six to seven hours okay and situation married single kids yes married and one kid that's great and how old are you Sanjay 37 last question something you wish you knew back when you were 20 years old uh you know I think uh financial and the way business works you know I should have known it long back I should have done all of this long back guys vervotech.com helps people understand what the unique identifier what hotels are on what street with what internet at what pricing they launched in 2018 today do over 240 000 a month in Revenue up from about 150 000 a month just a year ago and what's great about this company completely bootstrapped 30 even to margins is the target 25 profit sharing plan with employees Sanjay really built a great company and excited to share that he sold the company just last week to Constellation group where he's now excited to thrive under the Juniper subunit there we'll see what they do next so Sanjay thanks for taking us to the top thank you Nathan thank you for having me 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 2 p.m 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 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