Whelp Revenue, Valuation & Funding (2024)

hey folks my guest today is seymour rassoloff he is a ui uc graduate he had one previous exit in baku as hazard how do i say this country azerbaijan azerbaijan yeah yeah it's it's where that it used to be a post-soviet country i mean it is apostle it used to be one of the soviet countries 15 and after the independence yes we were the second one to get independence after ukraine so it's a it's a country with formula one with oil with good caviar and good food of course hospitality so you're always welcome to visit them well you're building wealth dot co now it's boots you boot drop it for six months pivot in 2021 now you've tripled mrr you're a techstars alum as well as 500 startups the company i believe is playing in the sme space to automate and consolidate customer support right using ai and ml that's correct yes we use artificial intelligence and machine learning specifically to provide customer support across 100 languages so that we want to capture we want to close the gap between the countries and the language so even if you are a small and medium business based in siberia or in south korea now you can actually using our solutions you can sell to english speaking or vice versa and what like help me understand what customers are paying you for today and what they pay you on average per month so currently we're this month actually we hit the 59 thousand dollar monthly recurring revenue this is the second month this is repeating and buy rx exp but we expect to close a year at 650 total revenue 650 000 total revenue so the customers are currently paying for us specifically for on-premise solution on-premise installation because we offer on-premise and we are the only one in the in this space offering on-premise these are financial institutions insurance companies they respect the privacy of the data so they prefer on-premise solution so we charge them we charge them one-time fee as well as retainer fee sort of a maintenance and support fee so and then and then we also have a cloud-based solution that's a subscription-based service got it what is the setup fee typically set up fee one-time fee is about 45 000 and then on a monthly basis they pay about 25 to 4 500 on a monthly basis to support maintaining and then we also build new integrations for them on a monthly basis and that helps us to have this lump sum stream of revenue right and then continuously uh supporting these customers they stick with us it extends a lifetime value but at the same time it brings additional revenue to us how many customers today today we have more than 800 customers in 16 countries not all of them are on premise on premise about 20 of them hold on 800 when what do those 800 customers be on average totally or they are they have their own separate plans they are on different plans so some of them are on premise some of them are monthly basis on average what the customer the 800 customers what do they pay per month on an average just recurring on average on average it changed from 250 to 450. a month yes a month i see got it so i mean can i i can take 800 times 250 bucks a month that should that equals 200 a month we write about 60 000 a month right yes so right now we offer a lot of free trials as well and then not all of them not all of the 800 customers are paying actually to us right now there are we also offer one free account so that they can start how many of 800 are paid paying customers about 30 35 of them are right now paying customers okay so call that like 300ish are paying customers you have 800 users what converts someone from a free user to a paid usually in the beginning we were actually doing seed based pricing but this year we switched to volume based pricing and when they hit the certain volume of 10 000 messages just like slack they need to convert otherwise they will not have the previous messages or the message history so many companies either will stay within 10 000 or convert with us we also introduced revenue per message revenue per conversation so we offer free chatbot and free unified inbox the moment chatbot closes a ticket or an agent close the ticket using our solution we charge them 10 cents per conversation so on a monthly basis then we send an initial invoice to them i see and if you're doing 60 000 a month today what were you doing about a year ago a year ago it was very low i would say to 2020 we were doing about five to six thousand per month then we reached about 12 000 and this month this year we actually went up after tech stars we got tons of customers seymour sorry i want to try and calculate a growth rate so in in september of 2020 how much did you do that that month one year ago in september 2020 we were doing about thirteen thousand dollars thirteen thousand now you're doing sixty thousand dollars a month where did all the growth come from the growth came from uh expansion conversion we started converting the free trials we also started doing a lot of content marketing and we became partners with we had we found partners that also started reselling our solution we we did one thing very well we also introduced white label solution that companies could take our solution and then resell it tell me about that so if someone is selling a white load your solution what kickback are you paying them so we generally offer like 30 per user per month and they can sell it on top of that they can charge 50 they can charge 60 on top of that but they will have to pay us 30 per user per month so that's fixed fee but there's everything is included so we do not divide the components of the platform like knowledge base or the chatbot or outbound marketing everything is in one yeah you know all your numbers and so you must listen to the show or something we love your show i mean honestly speaking nathan lefka get latka has become like a crunch base for sass now what what i'm learning because i am the second time founder but you know like outside the us outside of north america this startup ecosystem is gradually slowly i mean there are certain countries that are way ahead of us but azerbaijan is an emerging market so here we don't have that much data or learning resources but nathan latka and the magazine and the getlocker.com and the excel sheets that you share they have become the bible for us and literally we love it we learn a lot and we see that there's so much to still learn yeah well and of course your and of course your book your book right i'm going to walk you keep going this is nathan you have to name the things with the names right like there when there were no resources that we could learn aspiring entrepreneurs your resources were there and they were freely available specifically those intriguing emails right with the specific subject line it's like you gotta open that email you gotta look check that out and you're like and what i notice is that every single email is written as if it's addressed specifically to me and i'm like is nathan emailing it to me only and i swear i had that feeling multiple times i i sometimes it is me what i would tell you is i know a lot of people when i get a reply it's always me replying back sometimes i will send to a lot of people at once but if you reply it's always been your blind bags that's great anyways we appreciate that we appreciate your hard work you bet you bet tell me about how you funded the business are you bootstrapper did you raise so in the beginning we started in 2018 we started the baku azerbaijan it's a small country 10 million people and being a post-soviet country people investors and companies do not believe in something that they don't see or they cannot touch now and software as a service was something new to them so when we went to companies and banks and travel agents in 2018 they were like this is strange to me instead of paying 200 to you i will hire someone to will do the job for me so the mindset was different so in 2019 we decided to take the company to the us we got incorporated in us as a c c corp delaware and then we got our first exercise program and started ventures in new york and after that we just it started taking off so we started offering the platform and we got customers from middle east the question is have you raised capital if so how much yeah so far we have raised half a million dollars and we have about we we did the 500 startups and tech stars and 500 startups gave us about fifty thousand dollars as it was a safe note and then texas gave us hundred thousand safe note but then it's the rest is uh bootstrapping and our own investment okay so the 150 that you raise so there's 500 raised basically at what valuation uh right now we are right now we are raising 1 million 10 million valuation as of now yeah okay the risk this is what i'm asking is that what you already raised what evaluation was that at that was at three million three million valuation i see okay so what does the capital look like today how much do you own right now cap table is very clean we have 500 startups and tech stars and then two co-founders we keep it clean how much do the two co-founders own each co-founder owns forty percent and then we have wordpress yeah and then how much does 500 zone 500 setups it's a safe note they're about six percent and tech stars is seven percent there are safe notes for now got it so eighty percent plus six percent plus seven percent where's the other five percent of the business um they are on what it called unallocated pool of shares for the future employees so we keep it for the employees yeah really really smart interesting okay so what are you seeing in the market do you think you're able to raise one at a temporary it's a very busy space nathan honestly speaking it's a it's a red ocean but at the same time customer from new york got acquired by facebook for one billion message bird from amsterdam netherlands became unicorn intercom is a unicorn and many companies are growing very fast in this space the the biggest competitive advantage that we have is offering on-premise being a white label available right now and at the same time having in advantage of chatbot that works across 100 languages right we are we actually have closed 250 out of that one million so we're looking for partners to finish the rest of the we just started raising actually we started raising late august we got 250 already committed from an investor in ohio and we're looking for the rest and what's your team says today how many people 32 people two co-founders 25 engineers the rest is marketing content marketing and then uh we have about five specific dedicated sales people and they are working closely say it again we are what the five sales reps do they have a quota they are working on yes on the numbers on the metrics quota and by the next year end of next year we're expecting to reach total revenue in 2022 4 million so that's the specific target sales reps what is their quota target how much revenue do they have to close uh we i don't want to measure my team with the numbers we do have the numbers but i honestly speaking i always tell them that you are not numbers to me if i needed numbers i would get a calculator and do the work myself what i want my employees my staff my team to do is to solve the problem for the customers so and then of course bring the value but i think what we have done right now we are also putting the quotas in terms of the metrics to the employees i mean to the staff and they have about 15 to 20k per month to bring in each of them the 240 thousand dollars in new ar per year something like that interesting okay and and talk to me a little bit more about um the churn what's turn over the past 12 months we got about we keep it very low the customers that actually come to us stick with us and stay with us there's one reason before that we do a lot of customizations for customers many others away from the questions so just to be clear you have no churn over the past 12 months right we have in the last two years we have four percent turn total or monthly total yeah total no no no total in total only four percent of the customers left and there was one specific reason when they left whatsapp had not introduced the what business api since we got whatsapp business api we are official partner for facebook for whatsappings api we actually offer it for businesses once we got that customers to stick with us one reason again we do a lot of customization for them at no cost so they stay with us got it that makes sense and then what are you spending to get a new customer what's your full weighted calc it used to be eighteen dollars we are we have been able to bring it down to about eight dollars with content marketing we write a lot of blog articles we use linkedin heavily for eight dollars to get a customer to get a lead to get a lead to get a lead how many means would you have a so we do about 60 40 to 60 leads per month and then some of them convert for free users and then then we get about uh 18 conversion on we do 18 conversion uh out of this free trials on a six month lease so every six months say it again how much did you spend last month on paid ads last month we spent zero on paid ads on a monthly basis we try to not to spend a lot of money on paid ads i want the team to do a lot of content marketing a lot of educational articles so that they can lead traffic and also we do a lot of webinars so we're planning to spend more on ads on and paid marketing uh specifically in october november when many people are back to office that makes sense anything was a summer anything i missed you want to make sure you add on before we wrap up no everything is fine like i said we are raising 1 million at the 10 million valuation we already got 250 commitment and we're looking for partners that want to join us it's a it's an exciting space it's a 400 billion total addressable market and i think being on the show at canadian locker it's the greatest thing that has happened to our company so looking forward to uh working and meeting great people from your network nation and again you have to you've been doing a great job for entrepreneurs so thank you for that i appreciate that let's wrap up the famous five number one favorite book favorite book alchemists love it number two is there a ceo you're following or studying ceo he is he's a travis kalanchik i mean from the uber travis uber guy he's a bit cocky but i like his style number three what's your favorite online tool for building the business my favorite tool for building an online business i would say calendar it helped me big time number four how many hours of sleep to get every night four that's it what's your situation married single kids divorce unfortunately if you're building your business you have to let something go how many kids one kid six years old daniel yes very cool and how old are you seymour i am 37 right now last question what's something you wish you knew when you were 20 i wish i had started way earlier i wish i had started way earlier and didn't wouldn't spend much single minute in the corporate the only regret i have while doing this is that i didn't start earlier guys there you have it wealth dot co it's an on-prem installation of traditional customer support software they help you manage that support with machine learning and ai financial institutions love this it's private it's on-prem they've got over 300 customers right now doing 60 000 a month in revenue from thirteen thousand dollars a month just a year ago they raised five hundred thousand dollars in a precedent round of three million dollar evaluation in 2018 now raising a million bucks at a 10 million pre-money evaluation right now a team of 32 as it looked to scale growing just exponentially million year-over-million-dollar run right here very very similar team of 32 and 25 engineers seymour thank you for taking us to the top nathan we are waiting for you in bakwa you're always welcome here thank you so much one more thing before you go we have a brand new show every thursday at 1 pm 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 arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm 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 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 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