How Umwelt.AI Reached $120K ARR and 16 Customers While Staying Profitable (Interview with CEO Vishal Chopra)

Introduction and Company Overview

Nathan Latka

00:00Guys, was a technology executive in HR, but use those salaries to build up a nice personal nest egg to make sure he could pay off his mortgages, pay off all his car loans, off everything. So he could take the risk and launch the company which he did in 2019 called umwelt dot ai. It helps HR managers make sure their employees are happy so they retain them. He's got 16 customers today. Those are companies that pay for

00:1916,000 seats on his platform that yields $10,000 per month in revenue or $120 of ARR. He's kept the company lean eight people or sorry, six people full time out of India paid himself very little about to close a $200,000 pre seed round at a 3,000,000 post money valuation. We'll see what happens next. Hey, folks, my guest today is Vishal Chopur. He's a seasoned professional with two decades in HR leadership coaching and mentoring. A former HR head

00:44turned teacherpreneur, he pioneered umwelt.ai to empower CEOs and CHROs in shaping a future ready people first culture using AI. His expertise drives employment engagement and retention through tech driven insights transforming workplaces for lasting success. So Shah, you ready to take us to the top? Yeah. All right. So give me a customer story today. Who's using umwelt for employee engagement and people analytics?

Customer Use Case: Employee Experience Analytics

Vishal Chopra

01:11>> So these are large enterprises basically from different industries, normally service industries which are highly, I would say employee intellectual dependent.

01:24>> Basically these are the companies which would have a large intellectual property in terms of employees knowledge base and they are largely dependent on the employee actually to serve their customers.

Nathan Latka

01:38Let's use a specific example just so my audience can really understand what you do. You have Puma listed on your website as a customer. How does Puma Yeah, use

Vishal Chopra

01:47>> so they use us for having the interaction with the employees throughout the journey and understanding their behaviors, needs, experiences within the company. And we also, use behavioral science behind it to understand the psychology of the employees and their experiences within the company. Proactively generate the alerts to the CEOs and HR leaders to understand that what is missing in the organization, what employees are looking for, and how I they can actually retain and engage their employees proactively.

How Puma and Verimoto Use Umwelt.AI

Nathan Latka

02:18Okay. Let's you didn't use the word Puma in any of those sentences. So let's talk specifically, Ken, about Puma. So so for example, does Puma's does Puma's onboarding and recruitment team use you as an applicant tracking system?

Vishal Chopra

02:30>> So this is experience analytics. That means that similar to employee experience feedback, the customer experience feedback. What we do is that right through onboarding till post exit, we set up the journey of an employee within the company. Right? And we decide that when at what intervals and what

02:53>> the points that matters to the employee journeys, we want to have an interaction with them.

Nathan Latka

02:58I'm trying to get away from using buzzwords and give you the opportunity to actually tell us how a real customer use you. So for example, Puma quarterly employee reports. The Puma HR managers use let me just give you an example so you understand what I'm trying to Is umwelt used to do for example, the performance review every quarter at Puma so that we can make sure that the HR leaders are empowering the team members to hit

03:22their bonuses for example.

Vishal Chopra

03:24>> Okay. So I will talk about verimoto specifically right here. Again, the similar client retail. So we help them to actually right at the point of the onboarding of the employee itself. They go through the induction process right now. Post induction,

03:42>> our boss name is Nikki. So Nikki goes and interact with them and understand their experience, how their experience has been throughout the induction process. So that would involve from the company's perspective, they want to deliver specific experiences to their employees. So we check back that if they actually have those experiences and what were the lags behind those experiences of an employee, would they contribute to them looking for leaving the company as well.

Nathan Latka

04:11I see.

Vishal Chopra

04:12>> And we generate these insights to the CEO, the HRs, all the HR partners to take those actions and rectify those problem areas, speak to the employees and keep them engaged and working with the company.

Nathan Latka

04:26Understood. What does the average customer pay you per month to use this kind of technology?

Vishal Chopra

04:32>> So it 0.5 to $1 per employee per month.

Nathan Latka

04:38Okay. So what is the average size of a customer that's using it then in terms of number of employees?

Vishal Chopra

04:44>> Typically, 2,000 employees to 10,000 employees.

Nathan Latka

04:49Okay. So so let's pick a midpoint there. Let's say 7,000 is the average team size. At at point at 50¢ a seat, the average customer is paying you 3,500 per month. Is that a fair average?

Vishal Chopra

04:58>> Correct.

Founding Story and First Customer

Nathan Latka

04:59Okay. Interesting. Okay. Give us the backstory here. When did you launch the business?

Vishal Chopra

05:04>> So we started working I started working on mobile.a in 2018 and we launched on in two thousand nineteen July.

Nathan Latka

05:12Okay. How did you get your first customer? Do you remember?

Vishal Chopra

05:16>> Yeah. It was best seller, which is Vera Muda only, Jack and Jones selected. These are all the brands belonging to the same group. Right? So it was it was a it was a huge group with all these retail apparel brands.

Nathan Latka

05:29Oh, 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

05:52your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

06:17get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

06:39not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder 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

07:04going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if

07:26you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the

07:53interview. How did you land that customer though? That's a big group to get as your first customer. Usually big enterprises don't work with startups.

Pricing Model and Seat-Based Revenue

Vishal Chopra

08:00>> I come from the HR fraternity. So I know good number of CHROs, my ex colleagues, right? So I went through this idea to them and started exploring that what exactly they will look forward to have, because I think communicating with the employees the largest problem any organization has today. If you see right from Google's or Facebook's, everybody is facing that challenge that how to interact with the employees and how to actually preempt that what exactly is

08:29>> their experience. Listening to the voice of the employee is very important to them.

Nathan Latka

08:32Understood. Do you remember what the contract size was on that first customer?

Vishal Chopra

08:37>> So it was around 20 ks annual.

Nathan Latka

08:41Okay, interesting. And have you sensed increased or decreased prices generally?

Vishal Chopra

08:46>> Increased.

Nathan Latka

08:47How did you make the decision that 20 ks was the right price to go out to the market with back in 2019?

Vishal Chopra

08:52>> I looked at my costs very specifically. I didn't want to actually so it was very specifically looking at my costs, as well as the market competition. I wanted to actually make it, sort of, keep it very, very lucrative. Right? So so one of one of the things was only not when when we use the word AI, typically what happens to the mind, is that the price is going to be 10x. But I wanted to keep it

09:17>> same as those annual feedback surveys were charging for one single communication with an employee on annual basis. We charge the same amount on automating the complete journey of these interactions. So it could be seven, eight, nine, ten conversations. We do not control the number of conversations you want to have with the invoice.

Nathan Latka

09:37Understood. So that was your first customer. Fast forward to today, four or five years later, how many customers are you working with?

Current Customer Count and MRR

Vishal Chopra

09:44>> Look, currently we have around 15,000 paid users. We do not take number of customers into consideration, but paid users. So it is 15,000 paid users what we have right now, working with 16 brands right now.

10:03>> Okay. If you say customer, there is 16 brands.

Nathan Latka

10:05One six. I'm gonna make sure we're using the same lingo consistently throughout the interview. When you say 15,000 paid users, let me rephrase that. You have 16 companies working with you that pay for 15,000 employee seats. Is that accurate? Yeah. Okay. So 16 times $3,500 per month on average, which you shared earlier would put you about $56,000 a month in MRR today. Is that accurate?

Vishal Chopra

10:28>> No. So we are at a monthly average of around 10,000.

Nathan Latka

10:32Okay. So you're at 10,000 in MRR today. So I guess what isn't accurate? Is there is the ARPU less per customer or do you have less customers?

Vishal Chopra

10:41>> It is it is the

10:44>> lesser r ARPU. Okay. Yeah.

Nathan Latka

10:49$10,000 per month across 16 companies would be $625 per month per company on average. Yep. And $625 $625 per month at a dollar per seat per employee would mean that each company is actually about 600 big, not an average of 2,000 to 10,000 employees like you shared earlier,

Vishal Chopra

11:08>> correct? Yeah, so few of these companies form under the group. So when we accumulate the number of employees, we actually calculate at the group level, not at the company level.

Nathan Latka

11:21Okay. Got it. So MRS 10,000 per month today. I mean, obvious question is you started working on this in 2018, 2019. This is a very small amount of revenue Vishal to be working on this for four or five years. Why haven't you just take this thing behind this shed shot it start over with a new idea?

Vishal Chopra

11:37>> So I'm still with an idea to be frank. So kind of technology we were building and we wanted to keep it really cheap. So we invested a lot on building the technology itself.

Nathan Latka

11:46How much have you invested so far?

Vishal Chopra

11:49>> So we have invested around so I'm I'm just converting to USD. Right? So it would be around

12:03>> 200 k.

Nathan Latka

12:04How much of that was your own money?

Bootstrapping and Capital Invested

Vishal Chopra

12:07>> That was that is all bootstrapped. So we are we are currently bootstrapped.

Nathan Latka

12:11So that $200,000, where where did that come from? That's just company revenue?

Vishal Chopra

12:14>> No. It is it is all customers'money. So so we we we invested, reinvested, reinvested the customers money.

Nathan Latka

12:20So you didn't put any money in at the start and you haven't raised any external capital today?

Pre-Seed Fundraise Details

Vishal Chopra

12:24>> No. So we are raising our first PC round right now. That is as we speak the next week, we are closing off the transaction.

Nathan Latka

12:34Okay. How much are you targeting in the round? So we

Vishal Chopra

12:37>> are targeting 200 k right now.

Nathan Latka

12:39Okay. At what valuation?

Vishal Chopra

12:42>> At a valuation of 3,000,000. Right?

Nathan Latka

12:45How do you defend that valuation? You know, an investor is going to say you've been doing this for five years, you only have 10 ks of revenue, that's $120 a year, a 3,000,000 revenue multiple will be over a 30x multiple and a compressed equity market. How do you defend that valuation?

Revenue Growth Ambitions

Vishal Chopra

12:57>> So we are looking at reaching $11,000,000 within the next one year.

Nathan Latka

13:00Why would anyone believe that though when it's taken you four years to ten k of MRR?

Vishal Chopra

13:05>> We already have the pipeline in place.

Nathan Latka

13:07Well, yeah, we probably felt good about your pipeline two years ago too. What what proves or what do you point to to say, hey, investors, I can execute this pipeline and close it?

Vishal Chopra

13:15>> We never had a pipeline earlier. We were never marketing. So it was all the clients through the reference what we were getting and we were building the product along with it. Today we have reached to a level where exactly we we have started going to the market and actually started doing marketing six months back.

Nathan Latka

13:34Mhmm.

Vishal Chopra

13:35>> That is why we have this pipeline now.

Nathan Latka

13:37Do you have a lead investor already with a signed LOI?

Vishal Chopra

13:41>> So we already have, yes, a accelerator program, and that is with whom we are closing the transaction.

Nathan Latka

13:52Okay. Vishal, do you have a signed letter of intent? Yes. Okay. So and do you have the final closing docs on the round, whether it's a safe or convertible note?

Vishal Chopra

14:01>> It is safe.

Nathan Latka

14:02It's a safe. Okay. Got it. And and I guess what gives you confidence that you're gonna be able to close that next week?

Vishal Chopra

14:08>> We we have already completed the due diligence process everything. And and it is it is the final signing of the agreement, which is pending for tomorrow.

Nathan Latka

14:17I see. I see. With this $200,000 investment, what do you think it'll enable you to invest in? And what do you think you'll able to drive company revenue to from that investment?

Profitability and Team Structure

Vishal Chopra

14:25>> So we have been all I'm coming from old school. So we have been always profitable. So whatever we were actually getting from the client, that is what we were investing. And this whole investment goes to marketing. Mhmm.

Nathan Latka

14:36What's the team size today? How many full time?

Vishal Chopra

14:39>> Six

Nathan Latka

14:40people. Six people. How are you profitable with six people, you know, paying their salaries with only 10 k of revenue?

Vishal Chopra

14:46>> It is all product team. It is it is all technology team. So we never had any marketing or sales guy.

Nathan Latka

14:52Well, that's fine. But six people, if you're profitable, that means you're more than paying their salaries with your revenue, which is 10 k per month. And that means on average, they're making what is that $1,500 per month or about 20,000 per year salaries or this is this like really cheap labor somewhere or?

Vishal Chopra

15:07>> Yes. Yeah.

Nathan Latka

15:09Okay. So

Vishal Chopra

15:10>> That is all all all in India. And and so the biggest hit would have been the biggest hit would have been if I see my market value. Right? So that is my investment, which has been going in.

Nathan Latka

15:25So you haven't paid you haven't paid yourself?

Vishal Chopra

15:28>> Very less only my kitchen expenses, you can say.

Nathan Latka

15:30Interesting. How do you I mean, this is a bit of a personal question, but it's very important when you're launching a company. How how low have you driven your personal living expenses so you can keep as much company, as much money in the company as possible?

Personal Finances and Founder Mindset

Vishal Chopra

15:45>> I will say, I believe I've been still living well. I never had my lifestyle was, I kept it while I was at a height of my career as well. I kept it very simple. I don't have any mortgages. So before I made sure that when I actually opened this company, launched this company before that itself, I closed off all my mortgages. I had, no car loans, no house housing loans, nothing else. I think that in itself,

16:19>> helped a lot because I kept my, those monthly expenses are actually my monthly expenses.

Nathan Latka

16:25Yep, that makes sense. Well, we're certainly rooting for you on that note. Let's wrap up with the famous five. Number one, what's your favorite business book?

Famous Five: Books, CEOs, and Tools

Vishal Chopra

16:33>> I've been reading one of the business books right now, which is

16:39>> you say

Nathan Latka

16:42>> We can

16:43>> skip it. No worries.

16:44Number two, is there a CEO you're following or studying?

Vishal Chopra

16:48>> I closely follow Steve Jobs.

Nathan Latka

16:52Number three, what's your favorite online tool for building on wealth?

Vishal Chopra

17:00>> So

17:04>> stigma is is what we use.

Nathan Latka

17:07Number four. How many hours of sleep do you get every night?

Vishal Chopra

17:10>> How many?

Nathan Latka

17:11Hours of sleep.

Vishal Chopra

17:13>> I I take eight hours of sleep, basically.

Nathan Latka

17:16Number and which situation? Married, single, kids?

Vishal Chopra

17:19>> Married with a single kid.

Nathan Latka

17:21That's great.

17:22>> How old are daughter.

17:23How old are you, Vishal?

Vishal Chopra

17:24>> I am 44. And

Nathan Latka

17:27my daughter That's is great. Last question. Something you wish you knew when you were 20.

Vishal Chopra

17:33>> I think

17:37>> I would have spent more time in technology tech then, right, which I got to now since last five years.

Closing Recap

Nathan Latka

17:49Guys he was a technology executive in HR, but use those salaries to build up a nice personal nest egg to make sure he could pay off his mortgages, pay off all his car loans, pay off everything so he could take the risk and launch the company which he did in 2019 called umwelt dot ai. It helps HR managers make sure their employees are happy so they retain them. He's got 16 customers today. Those are companies that

18:08pay for 16,000 seats on his platform that yields $10,000 per month in revenue or $120 of ARR. He's kept the company lean eight people or sorry, six people full time out of India, paid himself very little about to close a $200,000 pre seed round at a 3,000,000 post money valuation. We'll see what happens next. Vishal, thanks for taking us to the top.

Vishal Chopra

18:28>> Thank you very much, Nathan. Nice speaking to you.

Nathan Latka

18:31One 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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