x0parevenue, valuation & funding

Introduction hello everyone my guest today is nina sorry she's the founder and ceo of zopa this is her third venture she's been an entrepreneur since 1997 started her first company with an investment of a thousand dollars to make it a multi-million dollar company across five continents she pivoted to the digital platform in 2017 and is the recipient of over 23 awards including female business personality of the year entrepreneur uh in asia nina you ready to take it to the top absolutely nathan excited to get to get started you bet so you came on about a year ago zopa.com if you guys want to follow along it's an ai sas hiring platform nina walk us through what you guys are doing uh so we work with the with government we work with enterprise and we work with academia to help uh promote uh objective hiring uh using ai and ml so um you know making it objective making it unbiased uh and taking it to scale um so those those are the main key features and what are customers paying you for this product today uh so we have it's a sas platform it's a subscription typically the subscription can be uh anywhere from one year to five years uh depend depending on the clients and what are they paying on average per month uh so 50 000 is typically the starting point and it all depends on per year on the usage and the number of users and cvs that they process um so anything from 50 and we've also got clients who paid half a million so and just to be clear that's fifty thousand dollars per year on average that's correct so forty one cutting about forty one hundred dollars per month if someone pays you need at fifty thousand dollars per year about how many uh resumes are they processing so the there's a limit of uh ten thousand resumes and uh as as the volume gets higher then they go to the next year and so on the 10k limit is with what price point 50 000 bucks a year that's correct and and what is the customer that's paying you the most how much did they pay you in 2020 um so we we have a client which has the highest that we've got is half a million per client so um yeah that's great and how many resumes did they process last year uh so it wasn't just related to the resumes it was also about the workflow um you know it was a completely 100 automated workflow right from uh acquiring the application taking them through automated testing taking them through automated uh you know hybrid assessment uh and bringing it to the point where the recruiters can then engage with the uh with the candidate it was a logistics firm so it wasn't just to do with the resumes it was also to do with the automation and the and the workflow now when you came on back uh about a year and a half ago actually Currently serving 300 customers this was 2019. you're at about 32 customers how many customers today yes so we've got more than 300 customers now wow yes and we had a great year read me some of those numbers on that sheet sure sure so we've got we've got we've got three three products uh so one is the ai recruiter which goes end-to-end hiring um we also have an assessment platform called room room is a hybrid assessment which does video interviewing as well as multiple choice questions essay type questions and so on again very very ai enabled to do cognitive analysis um transcriptions and so on um so uh we had for example 396 assessments done last year uh through 128 clients uh and they assessed more than 11 000 uh candidates last year so that's one of the stats um the ai recruiter um so 14 757 candidates were processed through our ai recruiter last year um over 7760 jobs so it's a pretty mind-blowing cover year in spite of the issues with kovids and so what is what does that mean in terms of your run rate what did you finish in terms of 2020 at revenue run rate wise Monthly recurring revenue yeah so we finished at 3 million our target was 3 million we finished at 3 million and we were super excited we are gunning for 9 million this year so yeah this is so impressive i'm so excited for you so that's basically i mean that is well over you know over 300 growth from the end of 2019 to the beginning here of 2021. that's right nathan yes did you raise Raised more capital to do this or you still have 1.5 million raised no we raised a million dollars in convertible note you know how cool it is and i was quite focused on revenue i didn't want to waste my time um trying to raise the capital so we just decided to do a quick one on convertible notes it's a kiss note and we are now raising our series a so hopefully the convertible note will be converted into shares as well so great now how much are you targeting to raise right now uh between three to five million us dollars okay and what valuation are you targeting i'll be targeting 30 million three zero or one three three zero targeting three and what are early conversations sounding like do you think you'll be able to get essentially a 10x multiple on your three million run rate valuation wise uh yes i mean look i mean the thing is that the numbers are very very promising um we we have a very solid pipeline we are on track to do 9 million this year so from that point of view if if the investors are smart they are going to get they're going to get the best return for their money you know so uh we are already sitting on a 1.2 million arr for next year 2021. what does that mean you're sitting on it uh it means it's all the spillover right from the previous year so uh the the annual recurring revenue for 2021 so those are already in the bag so um you already got that happening and 2022 we are already on a million uh arr so is that because you know you're signing multi-year contracts that's correct yes so most of the clients do at least a three-year contract a very sticky business yeah and so just to be clear though if i take a 3 million run rate divided by 12 months last month you did about 250 000 of revenue correct that's correct yeah and you think by the end of this year that number will be in december of 2021 you'll hit 750 000 in sales that month which would be a 9 million run rate that's correct that's great i love this okay and now i want to learn i want to learn how you did it so how did you do it how did you go from 32 customers a year and a half to go to 300 today yeah um i think a couple of things one uh we kept a very close you know uh we we were not sure whether we should go international and and balance our risks uh but then we took a call of focus so we said focus is going to drive growth so we really really focused on some key markets uh singapore being one of them uh india with the large local consumption so we signed up with the with these with the private office of sheikh al makthum in uae uh so we had a very solid partner there as well so our four four main focus areas were singapore india uae and london and we we just drove focus and we said let's just kind of get get the get the name out there um we had a very cool invention during covet we call it the kovid uh accident uh which is our product room uh and it was a completely out of the box pivoting uh you know we wanted a assessment platform um and the deal was one even before the product was created so the engineering team just worked on it it's a fantastic product it is highly ai cognitive uh it can do offline at scale video interviews um you know so one one one link goes to many kind of candidates so it's been it's been actually piloted by quite a few colleges now to to to see whether they can use it for admissions you know um so that which which i think is damn cool because um admissions has always been such a subjective you know it's always been about grades and uh you know scores and and and i hope we can disrupt that um we have very cool features like anti-anti-cheat so it's got proctoring uh feature there so it's also being used by schools to do their assessments and their tests because of covet and social discipline and what about some other critical things i mean your team is obviously critical in building this business what's your team look like today how many people we're 45 now nathan 45 how many engineers so we've got uh 20 engineers um and we've got around 20 uh 18 odd sales people and the remaining order uh the sales have all quota yes interesting how many can i mean can i ask what their annual quota is uh per salesperson or i mean yeah so we have we have three teams this year uh last year was just one sales team this year we've got the enterprise sales teams which does like the really big business multi multi-million dollar businesses we've also now started an online business which is just about you know uh getting the deal across the line and just signing up online so this is something new um the single team used to do everything so we've divided them into into a marketing slash online sales team and we are in the process of building our outreach team so we decided that we should have an outbound and an inbound team separate um so we have the money now so we are in a bit better situation to make these decisions last year when i spoke to you we were counting pennies so uh we didn't have that liberty yes how much question do you have in the bank how much cash uh till june so i'm pretty good um uh you know and if we raise our series a now that should take us to 2022 very easily and what does that mean so through june is it like a million in the bank or half a million in the bank or what yes we've got half a million in the bank but we've also uh we've we've just exercised some tools uh on debt funding uh so we've got we've got uh you know we are mobilizing that and we are already in the due diligence with with the vc uh for our series a so if we get the lead investor there there are quite a few who are very keen to follow the round i love that and last question on the sales rep so what do your enterprise sales reps what is their quota target annually uh typically a senior person does around a million uh per year yeah yeah that's great very good what about churn uh what's your revenue turn look like minimal touchwood i think it's very early years we are only in the second third year of commercialization typically the contracts are three years two years three years so when the renewals come up uh we'll see how that goes but the early renewals have already started to happen we are already in the second phase of some of the clients um i'm i wouldn't say it's 100 but it's definitely uh well above 90 nathan nina let's wrap up with the famous five number one what's your favorite business book um from good to great number two is there a ceo you're following or studying oh i i think uh satya is amazing satya nadella number three is that what's your favorite online tool for building your business oh gosh so many i mean i would very easily say linkedin because uh you know we are really linked in on on to that yes nina now is clever number four how many hours of sleep do you get every night oh well above eight hours love that and what's your situation married single kids married two boys uh 27 and 23 married super young oh that's great they're mine they're my age they're mine i love that and nina can i can i ask you how old you are oh i'm 53. okay last question what's something you wishing you when you were 20 what was my wish at 20. something you wish you knew when you were 20. gosh oh uh i can't think of anything you caught me there but uh no i i always wanted to be an entrepreneur and my wish came true and i'm so glad i did what i did guys there you have it zopa.com growing exponentially i just passed a three million dollar run rate up from just 500 000 run rate about a year and a half ago they've done it all just pretty capital and uh resourceful 2.5 million raised so they do more revenue than the total amount they raised we love that trend they went from 32 customers to 300 they're now raising a three to five million dollar round on a 30 million valuation that's a 10x revenue multiple but they have plenty of runway in the bank good through june we'll see what happens across the three product lines as they scale their sales team nina thank you for taking us to the top thank you nathan always a pleasure to talk to you 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 1 pm 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 take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan latka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know 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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