x0pa Revenue, Valuation & Funding (2024)

hello everyone my guest today is nina alex suri she is an entrepreneur sorry a geek in an entrepreneur at heart she's been an entrepreneur for 21 years now founder and ceo of a company called zopa playing in the artificial intelligence for talent management space all right nina you ready to take us to the top absolutely let's go for it all right tell me what the company does and are you guys pure place ass right it's a sas platform um uses artificial intelligence natural language processing uh robotic process automation long story short it's it's to manage and hire talent okay and help me understand how folks pay for this right it sounds like it's a sas model what do people pay on average per month to use the technology right so uh the candidates don't pay anything uh we we match uh both uh you know candidates can find uh work uh so it all uses ai to find the right jobs where you will be most happy best suited uh you'll perform well you'll be you know you'll be extremely committed to that job because you love it um and on the other side there are clients who are looking for talent so clients are the ones who pay us uh there are different um you know there are different uh products within within the platform uh the lightweight product is a simple one where you kind of go in uh try it out you like it would you say 500 a month is a fair average though no i would say 500 is perhaps the average because usually people who get started uh start with a hundred but then they start loving the tool and they want to use it and remember it helps them to save time save cost um it really kind of uh you know empowers them to keep a control over uh who they're hiring removes biases and you know you don't you don't have to convince me on the product i i totally get it there's a massive need for this it makes total sense for me while you're building it so i'm i'm a believer i'm converted uh when did you launch what what what year did you write the first line of code oh come again what year did you write the first line of code uh 2017 so my previous company was an executive search company and i i thought it's best i disrupt my business then somebody else does it so 2017 nathan and when was your first dollar of revenue um so we started in march and our first client came in in september 2017. okay so pretty quick um what did you spend building the mvp before your first dollar of revenue do you remember um i think it was roughly around uh 500 half a million uh half a million dollars okay so you're like rich or something where did you get this money no it's it's um a lot of it has been really leveraging uh my credit cards and uh everything possible nathan i really believe in this product so i've really leveraged a lot um we were lucky enough to win a competition in singapore um you know there was a pitch uh we made the pitch we won the competition we got half a million dollars prize money that was awesome so you know that was it was it dilutive or was it just like a grant a prize no it was just a prize that's right what was that competition that's a huge prize yeah it's called tecs which is technology uh so basically the singapore government uh holds these competition there's no it's it's a random competition i don't think they do it anymore and then they bring in um you know there were 150 startups who started off and then uh we were five in the end and then we made it we made the mark so that's yeah it was awesome that's great now who is we how big is the team today how many people so we are 22 now globally uh we operate from three three locations singapore london and india how many engineers uh so engineering team is around eight people okay any quotas carrying sales reps uh yes we've got sales guys we are five sales uh across the three regions okay five that's pretty good and then because getting more the backstory here do you remember how you got your first customer um yes so uh it was basically um you know a a university and uh we we decided to kind of do a very very um basic level pilot for them and we said pay pay us if you like it if you don't like it just chuck it uh they loved it and they paid us for it um with that reference we got two other universities who opted for it um they were they were pretty powerful names so and then that's how the the corporate clients started to come in as well and fast forward now to today how many total customers on the platform uh we've got roughly around 32 customers now across the globe we've just launched our uk operation so uh this there's a good pipeline but yeah most of the clients are from asia and uh from uh from the asian market asia pacific nina can i take 32 customers at 1500 bucks a month you're doing about 48 000 a month right now in revenue somewhere there that's correct and where were you where were you a year ago do you remember oh my god we we ended last year at 25 000 for the entire year um so what just in that month though do you remember like in august of 2018 oh gosh no it wasn't even a steady mrr nathan it was i would probably say zero or three thousand or something like that okay fair enough that's good so a lot of growth here recently um your first channel was that first university today when you're 32 customers are they is there a big core that are universities there is a decent quota of universities um you know there's a huge demand uh where uh there's a lot of youth unemployment so obviously they love the platform from that point of view that their students can get internships um and uh young grads can get hired in a much so there was a pain there of course uh you know so we've solved that problem um it is quite popular with the universities and and the youngsters yes is there uh is the company profitable today are you guys burning cash i know we are still burning cash uh but we have as you see that we are we are literally growing at 71 every month on month in terms of our revenues uh you you very quickly calculated um an mrr of 48 000. um so yeah we doing pretty well uh you know it's a very super lean model this is my second venture nathan and one thing i learned from my previous model previous company of 20 years was uh you have control over uh expenses you do not have control over income you know you got to be smart you got to pull that dollar to give you the maximum return and i think that's what's really come handy in the second venture um and we've been very prudent and super super lean so what i mean tell me how aggressive you're being on burns today are we talking five grand a month or 30 grand a month how much are you burning so we're burning sixty thousand a month okay um is that comfortable for you it's comfortable for us and that's six zero not one six correct six zero correct all the salaries and everything yeah and just be clear that's net burns that's after you add back revenue your bank is going down by sixty thousand dollars a month no that's that's the full full expense so if you take away forty thousand so i'm burning probably another twenty thousand on top uh which is steadily declining so it's affordable that's good net burn 20 grand feels good you're moving towards break even um you know you mentioned uh imagine making your dollars go the furthest do you when you look at when you add new customers let's say a 1500 a month account what will your fully weighted cac be to get that new customer our client acquisition when we started um you know it was almost a four-month cycle to get the first client uh suddenly this has gone down to three weeks um so it's you know it's kind of compressed um and references help the more the client it's an exponential journey but nina what's the cost basis not the sales cycle time but what will you spend marketing sales commission everything fully weighted to get a new 1500 a month customer um 1500 a month i would probably say at least uh eight thousand dollars okay got us you're optimizing for something like uh i mean you can do the math right something like a three four five month payback period that's correct yes okay cool now it doesn't matter how much you spend to get them if they don't stick churn's critical what's your churn rate look like zero at the moment okay so no one has downgraded even by a dollar or canceled completely no not a single client so far um it's early days nathan so um i can't be too too excited about that but uh you know we're holding on tight to them and talent is a sticky business yep any plans to raise capital or 100 um so our last round was a seed round with family and friends um and uh the next one is going to be series a uh i'm big that's my kpi personally i'm kind of already pitching for that end of the year is when we are hoping to kind of sign the deal sheet and get it for the new year how much do you have to raise so we're looking at anything between 5 million to 10 million at the moment um you know plan is to utilize almost 75 of that for go to market footprint getting out there the platform is totally ready so there's very incremental cost on r d and things like that so uh it's all going to be about getting that footprint well you're doing 600 grand in terms of ar right now what valuation are you hoping to raise at um it's a very tough you know what would make you happy what will make me happy um i don't think i would like to dilute more than 20 and okay so if you're gonna sell let's say you do the minimum you just gave let's say you raise 5 million and you don't want to sell less than 20 what you're saying is you need to basically get a call it a 15 million dollar or call it 20 million dollar pre-money valuation which would be about 40 x or call it call it 35x on your current are you thinking you can tell a good enough story to get it i think so i think so because uh remember all of these revenues have come from direct b to b and all my partnerships have not even started to spur the revenue uh growth we've signed up with microsoft as a core sale partner hp as a core self partner we've got tons and tons of product integrations which haven't even started to pay which are all going to start paying by september onwards you know so i haven't you know yeah there's going to be an exponential are you dead set on getting diluted or would you ever look at something like venture debt to drive growth i would i would i would keep an open mind uh to every possible uh opportunity and take the smartest move really so if someone offered you i'm gonna make this up 3x your current mrr but no dilution you're just paying like a very simple interest rate on the money would that like so let's make it real for example let's say they pay you get 150 000 line of debt would that 150 grand allow you could you reinvest it today to drive more ar growth so that you can go raise later on at a larger valuation so you get diluted less yeah i think you're yeah absolutely you're spot on yeah that is an option we are keeping in mind and that's a debate on the board uh on what's the best move um but yeah i mean we'll have to see we'll have to see what comes comes to us and you know what gets offered time there is there's a cost of time as well um you know we are also cognizant of the fact that we need to stay six to eight months ahead of competition in terms of our innovation um so so we have to take all of that into account and you know footprint the first first movers advantage is super important who's your number one competitor um i've heard there's a company called eightfold in california uh which is uh which which could be in you know similar to what we do there's a company called pulsify in singapore i think it's a boston-based company which is kind of in the space that we are in um but uh you know it's a matter of time uh when we when we started uh we perhaps there was no competition for a long long distance away from us but it's a herd mentality now that hr has become such a big thing everybody wants to ride the bandwagon of hr so you know you got you got to take that into mind and how much have you raised to date ignore the 500 grand uh prize oh we've raised 1.5 okay so 1.5 from angels friends family etc that's right yeah okay very cool all right nina let's wrap up here with the famous five number one what's your favorite business book uh from good to great number two is there a ceo you're following or studying um i love the innovation by by [Music] you know uh innovator's dilemma um no i mean i i was going to stay say um uh oh okay let me let me change that who do i follow yeah any ceo any ceo oh i would say um tim cook's predecessor okay uh yeah who's that no no number three what's your favorite online tool for building your company i would say linkedin okay number four how many hours of sleep to get every night oh oh i love my sleep nathan i have to sleep eight hours otherwise i'm zero on cognitive so i'm a big believer of sleep and can i ask you nina how old you are how old am i can i ask yeah yeah sure uh 19 turning 51. there you go i love that i love that all right and what you should know what's your situation married single kids married two boys uh 22 and 25. oh i love that okay last question what do you wish your 20 year old self knew um i think i think you know i wish i was more new i studied finance you know i'm more of a sales i've studied engineering i've done sales finance is something that is i wish i knew that when i was 20 and i would again back to that lean model uh i would have held on more to the cash uh stretch that dollar much higher yeah yeah guys zopa.com playing in the hr tech space 32 universities or most universities pay 1500 a month right now the company's doing call it 48 grand a month right now and revenue from just like two or three grand a month just a year ago obviously healthy growth i built the mvp spent between about half a million bucks to build it uh now scaling nicely burning twenty thousand dollars a month one point five million rates hoping to raise a five to ten million dollar round series a here soon on hopefully it you know caught 15 or 20 million dollar pre-money valuation right now though scaling with our team of 22 folks eight engineers five sales reps again spending eight grand to get a new customer uh paying 1500 bucks a month so five month payback period healthy economics nina thanks for taking us to the top thank you nathan you take care