How Yaypay CEO Anthony Venus grew Yaypay to $3.8M revenue and 90 customers in 2020.

hello everybody my guest today is anthony venus he's a serial entrepreneur and co-founded his current company yay pay in 2015 to make collecting money easy fast and highly predictable previously a co-founder strategic intelligence an online publishing company market share which is an online survey research company which he sold and meridian a loan origination firm he's australian based in new york city and has lived and worked in five continents all right anthony you ready to take us to the top absolutely all right so yay pay help us understand like are you serving kind of b2b companies or is this more of a b2c play no it's all b2b so we serve companies anywhere from 50 million up to about a billion dollars in size uh there are some bookends to that but it's all about making collecting money fast and easy and highly predictable so it's automating the accounts receivables process so we're in the back office we're in the cfo stack of tech and the users are accounts receivable specialists credit collection specialists and the buyers tend to be controllers and cfos and vps of finance that want to automate that process which they would otherwise use people and spreadsheets for okay and just to be clear this is a this is a piece of software you're not doing things like you know giving people the full acv the annual contract value up front while the customer pays every month that you're not doing like receivable loans right no we're not doing that actually we're really automating the workflow we're providing a crm system for the back office um also we're predicting cash and bad debt as well by bringing in a couple of years worth of data from your erp system so it's basically automating all those manual repetitive tasks that people shouldn't do anyway yeah okay very good so um how do people pay for this what do they pay per month on average yeah so it's an annual upfront uh sas license fee the acvs are now creeping up to nearly twenty thousand dollars and of course that ranges at the low end ten thousand the high end about eighty thousand dollars what's the average across the current base not your current pricing but your current base the average is exactly some just shy on 20 000 it's like 19 600 and something at the moment yeah that's great and you said you launched in 2015 correct we did yeah the idea was um germinated in 2015 we dabbled around and ripped things up a few times in 2016 on boarded our first customers in 2017 and we've got up to about 90 customers now about 600 users right across wholesalers manufacturers and high-tech companies as well 90 customers at 20 grand a year is about 150 grand a month right now in revenue is that right about right yeah and where were you a year ago oh my god we were very nasty a year ago it's just it's blowing up many many times over the last year so what was mrr would you say a year ago it's like you know 10 of that amount so it's really the last 12 months we've seen the traction and it really coming to a point where it's getting really interesting so just be clear january 2018 you're probably doing about 15 grand a month now you're doing 150 correct yeah and where where must that growth come from new customer ads or expansion on the historical cohorts it's a bit of both actually so um certainly certainly after using the platform for a year they see the roi uh customers are getting paid 34 faster you just key that in it's saving on head count we also save a ton of money on payments as well so certainly we've had price rises by about anything from 30 to 80 percent year on year you mean what do you mean year one to your 2acv like the contrary values increase between 30 and 80 correct yeah that's happened uh and also just moving up market as well we've moved into bigger companies over time but also launch more modules so we started off it was just about collections management then we launched payments uh now we have invader credit assessment uh cash application is coming out so we're automating the entire credit to cash process so from credit assessment collections management invoicing payments cash application analytics the whole thing and have you bootstrapped the company or have you raised we raised some money uh we've raised a total of 14 million dollars so far i bootstrapped it for the first 18 months or so and then found out that being in the back office is an expensive place to be it's a very high compliance no fail no mistake type of software it's high compliance accounting software also we have to go sock to uh compliant very early on you've got money payments running through the system so um yeah it was a heavy build actually and what's the team size look like today how many people we're 45 people uh we're spread between new york and also kiev in ukraine but we have a lot of developers over there as well okay so new york and ukraine and then i assume you're burning cash to invest in growth how much are you burning every month oh i can't reveal what we're burning every month but we're certainly you know we're not going to be we're not planning to be cash flow positive for a couple of years we could switch that dial um if we wanted to i would say within about nine months okay um but the idea is of course to reinvest in that growth and to really capture market share while we can anthony more or less than caught 500 grand and burned monthly no we're not we're not unless yeah yeah okay good um that's great and then um when was the last round so we can get a sense of timing here yeah so we put in uh 8.4 million in december oh just recently yes that's up in toronto uh supported as well a fifth third bank uh we've had a bank behind us as well the whole times that's been great also but that's just to be clear that 14 million is equity there's no debt in there all yeah okay good so so the eight was raised in december and when when you strategically when you're planning how much to go raise how many months of runaway were you raising for 12 or 24 or about 18 months of runway um i'm really interested to see how the economy pans out right now i think everyone's watching that i've been through ups and downs and recessions over the years and i'm just conscious of having enough gas in the tank uh when the time comes yeah raising for 18 months of runway and you raise 8.4 million bucks it means you're kind of budgeting 450 grand spend basically over 18 months right over the time over time yeah yeah uh interesting okay very good um it churns obviously critical on a sas company you know how do you think about retention and stickiness of customers so here's this is the most brilliant thing about the business so um while being in the back office you know we have other challenges like you know integrations and other type of things to worry about um it's a very sticky product so we have three percent churn uh when you take the time logo turner revenue churn that's revenue turn logarithms about five percent just a little bit higher and that's per month or per year yeah okay per year so it's one of those very sticky products we become your business process for collecting money it's mission critical uh but certainly yeah that's that's uh the joy about being in a back office there are also many challenges as well but churn is uh certainly one we're happy with and is that three percent revenue insurance per year is that net or gross uh that is gross we have net negative churn of about 115 percent nearly now okay so well just to be clear just i think you tell me if what you're meaning to say is this you have net revenue retention of about 115 percent correct yeah okay cool negative 115 percent churn would be a very different negative yes yes 150 net revenue retention um that's great so if you have three percent churn that means you're getting three percent back plus an initial 15 in expansion so your expansion arm is about 18 year-over-year yeah that's great and what pricing axes are you using to drive that expansion is it seat based or receivables based or invoice quantity-based or what pricing is one of the most interesting things i'm sure you're here for every sats ceo it never ends we um we threw out the seat based pricing very early on uh our idea is that we wanted to get as many people in the back office and also by the way sales and customer success also touch money so they're also users as well so there's no limit on users and the value metric that we use is volume based so it's a number of invoices per month and that steps up in pricing depending upon that and as well as there is some feature differentiation which on which type of platform you take so if you're a larger enterprise you'll you'll take a platform that support supports uh multiple subsidiaries for example compared to if you're a more simple company you'll be on a different uh base fee but it's really volume that we use okay so feature based a little bit but mainly invoices per month the best sas companies have multiple pricing axes especially value kind of driven metrics are are there any other metrics besides number of invoices per month you plan to use in the future to drive up sales we've experimented and looked at sort of um just instead of invoices just numbers of customers um but no we haven't uh we haven't gotten ahead around other value metrics yet we've um we've come back to gone different directions to get back to invoices per month a number of times yeah that seemed look it seems seems right to me we'll see what happens um take me back to the first 10 customers for everyone's starting out listening today i mean how did you get your how'd you hustle to your first 10 customers...