How Zbooni CEO Ramy Assaf grew to $3.4M revenue and 1.1K customers in 2024.

hello everyone my guest today is ramy asafi graduated from uc riverside dropped out of law school and then pursued startups after some failures and successes he's now focused on zabuni which is based in dubai actually and helping uh in the chat based invoicing space rama you ready to take us to the top yeah i'm ready all right so what exactly does chat-based invoicing mean uh basically you have a lot of businesses today that are interacting with their customers uh on new mediums so on chat versus phone call versus email and a lot of that interaction uh has become uh ubiquitous through whatsapp especially in emerging markets where we are and there is no way of let's say capturing a transaction or a sale through those channels traditionally so as a business we enable them with tools that allow them to charge their customers and use that same chat channel as the medium to capture those sales and then pricing wise are you guys kind of pure place ass and what's the average customer pay per month to use the tech actually we have a we have a bit of a different model it's a sas but it we give it away for free so how do you make money we make money per transaction so we facilitate the payment processing that's done through the platform and we make a small uh percentage uh from those transactions are we talking like one percent for like five percent yeah it varies but it's about so the total charge is three and a half percent but that's inclusive for for the business it's it's all in so um we pay the gateway fees and any other bank transfer fees from that yeah so break that down from a 3.5 to the business owner you then pay how much to the other companies before you take your margin it's uh embarrassingly low for us so we pay about two and a quarter percent most cases yeah so you're keeping about 1.25 percent about 125 points pretty pretty much yeah okay so your models obviously get as much volume as possible which is why freemium makes makes sense in this case right exactly did you bootstrap this out of the gate or raise capital uh no we did raise capital um this uh this was coming out of dubai so it's a bit different environment there it's pretty pretty expensive and to set up a business and hire employees and uh it's not as easy to set up out of your garage as it is in the us so how much total did you raise uh over the past two and a half three years we've raised about three million dollars okay to do this and what's the team size now look like how many people we're about 16 people okay and are you in dubai right now no i'm uh visiting my uh folks in california so okay but the team is in dubai the team is only dubai i see okay got it you go back and forth now one of the questions i always like to ask how much would you spend building the mvp before you had your first dollar of revenue do you remember yeah it was about uh it was about 150 000 most engineering all engineering and how did you get remember your first customer how did you land that person we couldn't believe it it was uh it was basically uh sort of like a an acquaintance or a friend who had heard about what we were doing downloaded the the app and was using the platform and then all of a sudden a transaction went through and we get cc'd on some of these transactions and the cto emailed me he's like i think there's a bug in the system because it was it was like a 1500 transaction it was the first one and it was higher than we thought it should be and we didn't think it was working yet and is this right and we felt great about that so that's uh we we stay cc'd on all those until today because but how do they so that's a great story but i mean how did they find you did things tactically to put yourself in a position to get lucky right so what did you do so that they found you organically what we did was very tactical in that the system was designed specifically for outside of the us you have this behavior where people are using instagram and facebook as a storefront so they're bypassing traditional e-commerce and they're using those those social media sites as storefronts if customers want to buy from them or interact with them it's all done through messaging we went directly to those we would we would literally sit on instagram all day and make indexes of who's on there who's selling what what are they selling et cetera how did you do that though were you scraping it with web scrapers or something or you know all manual so what would you look for you go to a profile and what do you read the bio or what signals did you look for there's patterns like in the bio they would put their whatsapp number or a whatsapp logo and message me on here um and we would want to not see an ecommerce website link up there we would like to see that messaging because i mean they really have a problem in payment processing so um we scraped 30 000 of those manually over time we had a small team working on that and we would reach out to every one of those uh one by one what'd it say what the outreach say was it email it was like hey i don't know if you're seeing this because you're probably getting bombarded with so many messages but we can help you with your business and we can do abc and we tested those different messages until eventually something stuck and we started seeing a good response we started the one that stuck to the highest converting first line it had to do with payment right so we had built this these features that we didn't know which one was going to be most important to the merchant it was everything from crm to order management to shipping to etc and eventually payment was the most uh sort of the pain point that that touched everybody the most interesting and what year was this launch here we experimented with this end of 2016 very tail end of 2016 and then we we launched the mobile app in uh end of 2017. okay so end of 2017 you get going and now if you fast forward add up all the volume you've done since 2016 how much total volume have you processed uh close to 10 million dollars okay and what's been critical to kind of scaling that is it going deeper on the same customers or adding new customers all together uh it's it's in basically well before i talk about customer look for customer wise it's getting more customers because once a customer becomes active uh they will slowly grow their their book let's say but there's not much we can do about that because uh it's between them and their customers we're not we're not a marketplace bringing them new customers but um what really worked for us was uh sort of a addition by subtraction by removing a lot of the features in the app so that the user once they launched it knew exactly what it was meant to do and the call to action inside the app was very apparent and there was one workflow that we isolated that made all the difference and and romney of that 10 million total how much of that came last month uh probably 16 of it okay okay 17. so caught 170 grand something like that or sorry 1.7 million something like that and then where do you remember what volume you were doing exactly a year ago yeah we were doing 100x less than that okay 100x or 10x 100x so so you what would that be like 17 170 or 17 grand a month um or like seventeen hundred dollars a month seventeen hundred dollars a month um okay obviously nice growth there so i guess question back to you right if you've processed 10 million total and 3.5 percent of the fees it's 350 grand but you're only keeping 1.1 or 1.25 of that so that's basically 125 000 in revenue to you guys over the past three years right that's not a ton of revenue how are you funding the business uh well there's a couple of things working in our favor the the idea of the 1.25 margin for us is yes long-term sustainability and we see it as an important stream but it's just the means by which uh we can we can have some revenue but the real idea here is to have that apply to everyone and then subsets of these customers will be paying for other features and other um premium added services that we'd like to add how many customers are you serving today uh actively there's about uh 1100 and how do you define active they do at least three transactions a year three transactions okay interesting why'd you pick that as your activation metric uh square uses a similar uh active metric they use it i think it's four four times a year we gave ourselves a little bit of a leniency on that okay so at least three sales per year through your platform yeah okay so if you have eleven hundred i get a 1.7 million in volume last month right that would mean you're basically making you are you're 1.25 something like 20 bucks a customer a month something like that yeah it's about 18 19 yeah yeah and that's up from again like two dollars a customer about a year ago something right exactly yeah all right um let's uh let's jump into growth right so so obviously did scraping early on to get customers how are we getting customers today uh we figured out some um some advertising channels that are working for us everything from i mean social media to google um some publicity is working to our advantage and um uh some partnerships that have worked out for us so there are unions representing large groups of businesses and small businesses especially so we work with these types of partners okay but how aggressive i mean to get a new customer that you know is worth 20 a month what will you pay in terms of fully weighted marketing spend and customer salaries things like that to actually acquire that customer it costs us about uh 16 today to acquire a merchant through a facebook ad and that's like a that's just a lead right or is that actual inactive they do at least one transaction through you they'll do at least that means they'll do at least one transaction okay so why not pour a billion dollars that's a very profitable channel with a one month payback period it is and we are getting a one month payback period and uh we would like to do that hence we would like to raise more money and more capital do that at the same time we're trying to see how organically we can do this and we're reinvesting some of the proceeds to do that if you did raise what's the right amount you want to raise i think something like three three million dollars at least will get us to where we want to be which is what [Music] serving 20 000 customers active customers okay and and how does that math work so what we do with three million to add another call at 19 000 customers well we're going to do more of what we're doing now acquiring more but there's also a need to add things to the product that keep these users happy and engaged and serving them on the next level and what do you mean obviously you want to do this and not get diluted out of your freaking pants right so like if you raised three million what valuation would you target we would target uh probably something like a 10 15 percent dilution on the cap table okay so caught uh i mean you'd be looking there at some of them like a 25 30 million dollar premium evaluation yeah um i mean do you think that's reasonable i think it's very reasonable and i think it's um because of the way the growth is going i mean we're growing some months 30 month on month and that's largely organic so you know uh uh to be fair though uh going from a dollar to ten dollars is you know 10x you know month over month growth right small numbers are easy to compound yeah you're right but uh it's been 10 months of approximately 30 month on month growth so it's more than just a it's not an anomaly yeah how do you i mean again going though from you know 10 million a month up to you know 13 million a month is obviously way different than going from you know a grand to 1300 right so i guess my question to you is are those are those economies all kind of linear right every new customer you add i'll be kind of 20 bucks a month you make from them or will you go after more enterprise more volume at smb yeah you're right so we i mean it's not to go from 10 to 13 million is a lot harder than going from 100 to 130 but um the way we're going to do that is exactly through the enterprise channel so everything we've done today and you know this is a little tidbit i'd like to share with you for your show you know someone like us a slack let's say they built their product very sort of smp centric so that for small business and us individual knows how to use it and it's easy to use and it's enterprises ultimately that will also enjoy that simplicity and ease of use so we've designed our product almost for the masses of small businesses and people and enterprises now are saying hey we want that we want some of that so we're looking at now a new model where we won't be making a rake on the transactions but licensing the software to enterprises who already have payment processing capability and want to offer this to their clients slack work though because of our coefficient you don't have that same kind of flywheel inside of your business yeah fair enough yeah um interesting how aggressive being right now in terms of burn right so you raise some capital you're driving growth you're burning like 10 grand a month 100 grand a month or more no no less than 100. somewhere in the middle yeah okay fair enough all right let's wrap up here with the famous five number one what's your favorite business book uh the four ps four ps number two is there a ceo you're following or studying um these are i wasn't ready for these questions this is that's because you don't have one say none none number three what's your favorite online tool for building your company uh we've been enjoying asana recently okay and number four how many hours i sleep to get every night five and uh what about uh situationally are you guys um are you uh hold on let me see here you said five hours of sleep and then um how old are you today 35 35 and married single kiddos married with two daughters oh okay so you have your hands full um that's why the five hours of sleep yeah yeah so take me back what do you wish your 20 year old self knew um just to just get started earlier and just start experimenting and not wait for you know some some moment where you think everything's perfect guys booney helping folks that use facebook and instagram as their storefront sell more effectively they currently serve 1100 active sellers that sell at least three times a year through their platform doing twenty thousand dollars a month right now in revenue up from almost nothing a year ago they do that by taking three point two five percent total from the seller they keep about one point two five percent of the three point two five that's how they make their money about sixteen people on the team right now three million raised burning caught fifty thousand dollars per month as you look to scale hoping to raise uh call it another three million dollars on a call maybe twenty twenty five million dollar premium evaluation here shortly to scale to twenty thousand sellers on the platform romney thank you for telling us to the top thank you nathan