How Zomentum Hit $250K MRR and 4,000 Partners on Its Two-Sided Network (Interview with CEO Shruti Ghatge)

Introduction and Company Overview

Nathan Latka

00:00Zomentum doing $35,000 a month a year ago, now doing $250,000 a month with their two sided network, helping you grow faster with partner programs. They've got over they've got over 2,800 partners on one side of their marketplace, and SaaS companies bring in another 1,200. So over 4,000 partners on their platform as they look to scale. Again, a two sided marketplace here, 13,000,000 series a at a little under a 100,000,000 valuation last year. 75 on the team,

00:2238 engineers as she looks to scale with her four person sales team based out of Bangalore with 300,000 to $500,000 quota target. Hey, folks. My guest today is Shruti Ghatge. She is the CEO of zomentum, a revenue platform to help partners and partner programs scale. The platform fuels technology sales over 800,000,000 today. She was an investor investing in seed in series a SaaS stars before jumping into the business and was named CRN Women of the channel

00:462022. Zomentum was awarded great place to work under her leadership. She's now looking to scale. Alright. Shruti, ready to take us to the top?

Shruti Ghatge

00:54>> Yes. Very excited to be here.

How Zomentum Works and Its Market Position

Nathan Latka

00:57Very cool. Okay. So how does zomentum work? What does it mean to platform? What does it mean to help people scale partner revenue?

Shruti Ghatge

01:03>> Oh, well, partner programs and partner revenue has been a black box for most SaaS companies usually and the reason it exists is because SaaS companies and partners are trying to go to market together but they live in their own silos. What we do as a platform is get both of them together on a single platform where they can come to get deals done. Right? Like that's how we look at it.

Nathan Latka

01:25Mhmm. Now, who would you sort of put in your space? I mean, Crossbeam comes to mind. Is that the biggest one or who else?

Shruti Ghatge

01:31>> Well, Crossbeam is an is step one. It helps you identify what are the opportunities are. We come after that, that once you've identified the opportunities, how do you work together to drive them to closure.

Pricing Model for Partners and SaaS Companies

Nathan Latka

01:43Interesting. Okay. And and how do you think about pricing your technology? What's the average customer pay you per month on average?

Shruti Ghatge

01:51>> An average customer is a very per partner fee, which which is a sliding scale and on the SaaS company side, but we also have a motion where we add partners by ourselves and who are paying anywhere between 100 to $200 per month to use the tool.

Nathan Latka

02:04And and why would someone maybe pay, you know, more than that? $300, $400 bucks a month? What are you upselling against?

Shruti Ghatge

02:11>> On the partner side, like, it's a two sided network. So we attract both partners on one side and SaaS companies on the other. The partners pay for additional functionality like the basics of the sales tool that is built for partners is what the price I'm quoting for, but beyond that, we do billing reconciliation separately. We do assessments. We help them integrate with a bunch of SaaS vendors. So all of that is at an additional cost for

02:36>> the partners.

Nathan Latka

02:37And what do the SaaS companies pay? Or is it free for them?

Shruti Ghatge

02:41>> No. The SaaS companies pay for the partners that they manage. Our partners pay us directly. The SaaS companies pay for the connection that you're enabling. Right? Like, you're getting these two siloed entities on one platform and that's what they pay for, which is the per partner fee. And of course, we do billing reconciliation, payout management.

Nathan Latka

02:59Shruti, what is the per part so what's the average SaaS company pay you per month?

Shruti Ghatge

03:02>> It can go as low as $30 per partner per month.

Nathan Latka

03:06But what what's the big like, what's your don't name the company, obviously, but what's your biggest SaaS company customer paying you per year per month?

Revenue Split Between Partners and SaaS Companies

Shruti Ghatge

03:13>> I'd say around a 100 k contract.

Nathan Latka

03:15Oh, wow. Okay. So if I'm if I'm a SaaS company paying you a $100,000 per year, what am I getting? Like hundreds of partners?

Shruti Ghatge

03:22>> You're getting to manage your partners. So it's a tool to manage your partners and a network that we come with ourselves. So it's a handshake in some sense.

Nathan Latka

03:30And very interesting. Okay. Very interesting. Now before I get more of your backstory and how you launched and grew, help me understand. So this year, if you if you look at a 100% of your revenue, what percent will come from partners versus SaaS companies?

Shruti Ghatge

03:45>> I wanna say the SaaS company led motion is a few quarters old, so fairly new like that. So partner driven motion is two years old, so I want to say 60% comes from partners today.

Nathan Latka

03:56Okay. Wow. But but still 40% from SaaS companies considering how new it is is pretty impressive.

Shruti Ghatge

04:00>> Because it's an accelerated way of go go to market because every SaaS company adds to the network their own partners. Right?

Founding Story and Year Launched

Nathan Latka

04:08Very interesting. Okay. Give me more of your backstory. What year did you launch the company?

Shruti Ghatge

04:13>> We launched in 2018, later half of twenty eighteen. So it's been four years now.

Nathan Latka

04:18Who is we? Do you have cofounders or you're a sole founder?

Shruti Ghatge

04:21>> I have a cofounder for tech and product. I take care of everything business.

Nathan Latka

04:25Very cool. Do you guys just play nice and split fifty fifty at the beginning or what?

Shruti Ghatge

04:30>> I don't think it's playing nice like that. I think it is a very equitable distribution between us, and we brought skill sets to the table which were very complementary.

Nathan Latka

04:40Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually, Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

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05:50not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founders share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

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Cofounder Relationship and Equity Split

Nathan Latka

07:04interview. How did you negotiate that though? I mean, this is a very hard thing for a lot of early teams to negotiate. Anything other than fifty fifty tends to generate create some friction. How did you go through that process?

Shruti Ghatge

07:15>> Oh, well, my cofounder I mean, he's an engineer by background, worked at Twitter and Drew Brecken, but had worked very closely with partner teams. So he had a business sense and very strong on product. He was just a techie by profession, but I think he's more strong product person and I think product and business go very hand in hand. And I think them think of them as an equal distribution. Only tech maybe would have thought very

07:37>> differently.

Nathan Latka

07:38Okay. So you would I mean, it is fair to say you could just put it fifty fifty then if you consider both those equal at the beginning.

Shruti Ghatge

07:42>> Correct. Which is why we did it. Right?

Nathan Latka

07:44Ah, okay. Okay. So you did split fifty fifty. Okay. Cool. Now have you guys I I don't think you have bootstrapped. Think you've raised. But have you bootstrapped or raised capital?

Funding History and Seed Round

Shruti Ghatge

07:52>> We have raised capital.

Nathan Latka

07:53Yeah. So so tell me fill out the funding story a little bit. First off, when when did you do the first round and why was it important for you to get that first round done?

Shruti Ghatge

08:01>> Oh, I think like we didn't raise immediately. Most of the initial, I wouldn't say like nine months went in customer research. We're not from the industry. It was a very thesis driven startup for us. I I mean, some context is I used to work at Accel before investing in a lot of SaaS companies and we saw this problem and wanted to solve for it. But spend the next six-nine months just figuring out our wedge into the

08:24>> market, right? Like one, it's a two sided network so we had to solve for chicken and egg. But which side would we solve for, how would we penetrate with such a sharp value prop inside is what we spent time. So we didn't write a single line of code, want to say at least 12 into the company, right? Which is just being sure that hey, we are committed to this. We've figured an entry point and that's when

08:44>> we raised our initial seed round.

Nathan Latka

08:46And how much was that for in what year?

Shruti Ghatge

08:48>> It was 4,000,000 in seed and then we raised series a last year.

Choosing the Partner Side First

Nathan Latka

08:53Okay. So 4,000,000 seat. And then I think I can't I don't wanna skip over this. It's really, really, really important. You saw probably a lot of marketplaces at Accel, and then you went in and launched your own. You had to decide what side do you wanna go after first and what's your mousetrap? What decision did you make? What side did you go after first?

Shruti Ghatge

09:07>> We went after the partners first. So SaaS companies on one side, partners on the other for us. So what we, even as a company, very strongly believe in today is that we have to invest in partner success. And if they are successful, that just means they're selling more SaaS. Means by design, the SaaS company is going to be successful. So we've solved for partner first.

Nathan Latka

09:25Yeah. That makes sense. Okay. So staying on that theme, how many partners pay you at least a dollar per month today?

Partner Count and Conversion to Paid

Shruti Ghatge

09:32>> We have around 4,000 partners in the network. And and I want to say 70% of them pay us to use the product.

Nathan Latka

09:39How did you get I mean, that's a huge conversion rate, right, even for b two b SaaS centers. How'd you get 70% to pay you per I mean, to be clear out of 4,000, that'd be 2,800 are paying per month.

Shruti Ghatge

09:49>> And that's the partners that we acquired. The others are also paid for on behalf of the saascom. The SaaS companies pay for them. So there is no way to get in free here.

Nathan Latka

09:57Oh, I see. I see. Got it. Got it. Okay. So 2,800 paying an average of $200 a month. I mean, isn't it? That's like $560,000 a month right there in revenue. Right?

Shruti Ghatge

10:08>> Yeah. I mean, there is baggage of pricing where we started very low at 39, increased it to $49.99, and now we have increased prices. So there's some grandfathering effect there. But I wanna say like because of compounding then it's not as high. Yeah.

Nathan Latka

10:23I see. I see. So so moving forward, new partners you're signing up are paying on average 200. But historically, the average was maybe something more like, you know, $60, $70, $80, something like that.

Shruti Ghatge

10:32>> Yeah. Yeah. Yeah. Because we

Nathan Latka

10:33Okay.

Shruti Ghatge

10:34>> Like respected those prices for them.

Nathan Latka

10:35Of course, which is very nice of you, by the way.

Shruti Ghatge

10:39>> I mean, I think it's only fair for them to take a punt on us early on. Right?

Nathan Latka

10:42Fair enough. Fair enough. Okay. So 2,800 partners to fix this math. 2,800 partners paying a lower average per month of like $70 a month is more like a $190,000 a month in revenue from that part of the business. Is that more in the range of where you are?

Shruti Ghatge

10:55>> Yes. Yes.

Nathan Latka

10:56Fair enough. And if that's where you're at today, where were you one year ago so we can sort of understand your growth?

MRR Growth and Eight-Times Scale

Shruti Ghatge

11:01>> We've scaled eight x in the last twelve months.

Nathan Latka

11:04Okay.

11:05So you're gonna make me do the math. So a $190,000 a month is from partners and partners are 60% of your revenue. So increasing another 40% on top of that means you're getting

Shruti Ghatge

11:12>> like Actually, also is only two quarters old. Like, the other 40% is a chunk of that is it's yeah.

Nathan Latka

11:20Okay. So maybe total MRR today is around $200,000 and that's eight times higher than you were a year ago. Is that fair?

Shruti Ghatge

11:27>> Maybe slightly more, but yes.

Nathan Latka

11:28Okay. Fair enough. Fair enough. Fair enough. Okay. Cool. But but still really impressive growth. Right? I mean, $250,000 a month divided by eight. Wait. So that's like 31,000 a year ago. Right? How have you gotten all this growth? Is it more partners or or more partners per SaaS company?

Shruti Ghatge

11:43>> Oh, I think the partner love is real, right? Like for us a demo to a paid sign up conversion is upwards of 55, it's it's between 55, 60%, right? Like and those are numbers I hadn't seen myself when I was working at Accel. So I think that's what's working for us. Like the product really works at a partner site. The churn numbers are the sub point 5% monthly, but the conversion rates are really high, right?

Nathan Latka

12:09Mhmm. Mhmm. Let me ask you a question. I mean, if you last year, if you've grown 8x $250,000 a month today and you were that would mean you're at like $34, $35,000 a month exactly a year ago. But you closed a 13,000,000 series a. How did you close a $13,000,000 series a with just $35,000 a month in revenue?

Series A Raise and Valuation

Shruti Ghatge

12:25>> I think like it's a network company. I want I want to say it's a SaaS driven network company and the network's more valuable. We have not or don't intend to milk the network upfront. Like like one parallel I like to draw here is LinkedIn. Right? Like it has all job seekers and job providers on the other hand but like lots of business models have emerged like ads and navigator and recruiter and whatnot. So once the network

12:47>> is in place and we become the de facto place for all SaaS companies to grow and manage and launch partner programs, then that's the moat we are working towards. Right? And so network is the North Star metric here.

Nathan Latka

12:58That makes sense. And then in terms of obviously, look, you raised, you're an ex VC, managing dilution is really important. Most folks raising last year in a series a were selling between ten and fifteen percent of their business. Were you sort of in that same range?

Shruti Ghatge

13:10>> Yes.

Nathan Latka

13:11Okay. So that means you're raising mean, you'd broke a $100,000,000 valuation then post money.

Shruti Ghatge

13:16>> I was slightly lower than that, but in that negotiation ballpark. Yes.

Nathan Latka

13:20Yeah. Okay. Fascinating. I mean, now fast forward to markets today, does that really high valuation you got in terms of revenue multiple now make now worry you a little bit?

Shruti Ghatge

13:29>> I mean, I I think like we fundamentally believe in the network really ourselves. Like we, our network touches more than a million and a half business and then that's the demand aggregation that we have today. So actually it's become more lucrative to the SaaS companies, I'm realizing because now they are looking for efficient channels of growth and partners happen to be the efficient way to grow businesses. So our networks become more valuable to SaaS companies. And

13:53>> and I'll see how that pans out over the next year, but at least on paper, this is what's what we're hearing.

Team Size, Engineers, and Sales Reps

Nathan Latka

13:58Talk to me more about how you've built this, your people. How many folks are full time today?

Shruti Ghatge

14:03>> Roughly 75 of them.

Nathan Latka

14:05And how many engineers?

Shruti Ghatge

14:08>> A good 50% is engineering.

Nathan Latka

14:10Wow. Okay. So call it 38, 39 are engineers. What about the rest of the team? What are they focused on?

Shruti Ghatge

14:15>> That's divided between sales, support, customer success, marketing, majorly.

Nathan Latka

14:21Do you have any quota carrying sales reps today? And if so, how many?

Shruti Ghatge

14:25>> We have four quota carrying sales reps today.

Nathan Latka

14:28Okay. Come on. Teach us. Teach us here. I have audience members going, I wanna hire my first quota carrying rep, but I don't know what quota to set. I don't know what ramp time to give them. I don't know what OTE to quota ratio should be. How did you set that up for your first four?

Shruti Ghatge

14:39>> I don't know either. Like, the the first the the ones who joined us in the zero to one, which is after I was doing the sales, we figured it out with them and we've been like, okay. In the first few quarters, when we are new to market, we are going to reward you on the effort versus the outcome because you don't have control over it. But once we figure that out, we move it to a very

14:57>> outcome based. Also, it's a very inside sales led motion, I don't know if my numbers are going to mix, are going to be the same for say US sales reps. Right? Like all our sales happen out of India.

Nathan Latka

15:09Very cool. Which which country or sorry, which city?

Shruti Ghatge

15:13>> Bangalore. Oh, I mean, very at this point, they're all over the country, but when we started, we were in Bangalore.

Nathan Latka

15:18That's amazing. And so what is the quota for those reps in Bangalore? Annual quota?

Shruti Ghatge

15:25>> 10 times what their income is. Once

Nathan Latka

15:29Okay. So what is that? Like, 100 k, 400 k annual quota, something like that?

Shruti Ghatge

15:33>> Mhmm. Mhmm.

Nathan Latka

15:34Interesting. Very cool. Can those reps close deals with US partners?

Shruti Ghatge

15:40>> Oh, very much. The partner driven is more inbound for us, so those that's that quota is very different. I'm talking about the SaaS company side of it, right? Which is still like the longer sales cycle and but even those deals we close out of India.

Churn, Net Dollar Retention, and Expansion

Nathan Latka

15:53There's a lot of founders even in India. I mean, I talked to Girish at Freshworks, Saravana, Rajesh at Netcore, some of these folks that say, we can't get our India our our sales reps in India to sell to US customers. They're trying to launch sales teams in The US which are way more expensive. You haven't run into this problem.

Shruti Ghatge

16:09>> I think like I mean, I work very closely with Freshworks as part of Accel, but I think like five years back the story was very different, but they've learned, they've trained themselves and the really good ones have have figured it out. And of course that pool is much smaller than what you'd like it to be. But it's still much cheaper than having a US Rep. Right?

Nathan Latka

16:28Yeah. Fair enough. And you mentioned earlier your your gross revenue churn per month I think was about point 5%. When you add back expansion on top of that, is your net dollar retention above a 100%?

Shruti Ghatge

16:38>> Yes. On the partner side, though there are not more avenues, which is like what we've known for a while because it's only the seat increase and some add ons here and there, but still above 100%. On the SaaS company side, of course, there is more expansion potential because they add partners themselves and we get benefit of it.

Nathan Latka

16:53Last question as we wrap up here. How are you getting more SaaS companies on the platform? What is your growth strategy there?

Growth Strategy for SaaS Companies

Shruti Ghatge

17:00>> Honestly, I wish I had a better answer, but it's slightly heavy on outbound today as we are creating awareness that of our own existence. And also like we are the only ones sort of doing this two sided network in the channel space. So to articulate that value prop takes some time and that's something we are working on on our positioning itself. But it's fairly events and outbound heavy today.

Nathan Latka

17:24Alright. Shruti, on that note, let's wrap up here with the famous five. Number one, what's your favorite book?

Shruti Ghatge

17:29>> Play Bigger.

Nathan Latka

17:32Number two, is there a CEO that you're following or studying?

Shruti Ghatge

17:37>> I follow a lot of them and I don't want to put them on a pedestal because then it's like, I try to humanize them because it helps me do my job better. So I don't want to take a name.

Nathan Latka

17:48Fair enough.

17:49Number three, what's your favorite online tool for building zomentum?

Shruti Ghatge

17:53>> I I used to do a lot of InVision mocking early on. Now the team uses a lot of things, but I like InVision when I sold a product without having one.

Nathan Latka

18:01Fair enough. Number four, how many hours of sleep do you get every night?

Shruti Ghatge

18:04>> Oh, I sleep a good seven, eight hours.

Nathan Latka

18:06And situation, married, single, kids?

Shruti Ghatge

18:08>> Single.

Nathan Latka

18:09Okay. And can I ask how old you are?

Shruti Ghatge

18:12>> I'm 32. 31. Turning 32.

Nathan Latka

18:1431. Very good. Last question. Something you wish you knew when you were 20.

Famous Five Rapid Fire

Shruti Ghatge

18:20>> Oh, that I'd be fine. Like, I I I used to be I wanted to do things very quickly in life, but I I think it turned out fine.

Nathan Latka

18:28Guys, there you have it. Zomentum doing $35,000 a month a year ago, now doing $250,000 a month with their two sided network, helping you grow faster with partner programs. They've got over they've got over 2,800 partners on one side of their marketplace, and SaaS companies bring in another 1,200. So over 4,000 partners on their platform as they look to scale. Again, a two sided marketplace here, 13,000,000 series a at a little under a 100,000,000 valuation last

18:50year. 75 on the team, 38 engineers as she looks to scale with her four person sales team based out of Bangalore with 300,000 to $500,000 quota target. We'll see what happens next. Shruti, thanks for taking us to the top.

Shruti Ghatge

19:01>> Thank you very much.

Nathan Latka

19:04One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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

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