SaaS Interviews with CEOs, Startups, Founders
1294 Predictive Supply Chain Company Closes 7 Figure Deals, $12m Raised
08 Feb 2019
Chapter 1: What is the main topic discussed in this episode?
Have fun on the journey.
Chapter 2: What inspired the creation of ClearMetal?
He created ClearMetal after going and doing an internship in Hong Kong, realizing there's massive opportunity in this space. It really helps logistics tracking. You know, currently they're focused in essentially one sector. They want to go closer, kind of last mile delivered, right? And dive into that in terms of headspace and growing additional revenue channels.
They're very much a high, high touch play with contract values in the six to seven figure range. Next goal, call it maybe 10 million, somewhere in that range. They can go out, continue raising capital to really go in and dive deeper into this market, specifically spending a lot of that money on engineering headcount.
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Adam Compain.
He is the founder and CEO of a company called Clear Metal. We'll dive in today. Adam, are you ready to take us to the top? Yeah, let's do it. All right. So you're kind of in the predictive logistics space. Tell us what Clear Metal does and how you make money. Sure.
So the challenge we're solving is that retailers and manufacturers around the world are trying to understand where their shipments, their freight is as it moves across the world in ships, trucks, trains, etc.
What we help them do is understand exactly where their stuff is as it's going from factory all the way to retail store or their distribution centers so that they can get products on the shelf on time for consumers around the world. We have a software as a service platform that we clean and make for these retailers and manufacturers.
And give me a general sense of kind of how you do pricing on that. Yeah, sure. So a typical SaaS model, we have a flat fee for the actual platform itself. And then there's a fee based on how much volume of shipments the company actually moves. Okay. And can you kind of give me an example of somebody using you and what kind of volume they might move with you? Yeah, sure.
So if you could think of any sort of large retailer, right? So someone that makes shoes, shirts, or even chemical materials and ships it around the world, they're moving anywhere from 20,000 shipping containers to 200,000 shipping containers a year. So you can think of like Adidas or Nike, any of these shoe brands? Exactly. That'd be a great example. Okay. Okay, got it.
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Chapter 3: How does ClearMetal's SaaS platform function?
Yes. How did you identify this as an opportunity while you were interning there? What did you see that said, I can make this a big business? Yeah. So what I saw was really the industry logistics that had spent about 30 years solving problems through physical economies of scale and manual operations.
When I looked forward into the future of supply chain, I felt like the future is going to be about data intelligence, not physical scale. And so the whole premise of the company, even the name of it, ClearMetal, was around this idea that it's not about the metal assets or even the inventory, but seeing through that metal, ClearMetal, and understanding the data underneath.
And if you could master what the data says and how things move around the world, then you can intelligently allocate assets, optimize inventory position and things like that. That's the genesis of the name. Exactly. ClearMetal. ClearMetal, pay attention. I like it. All right. 2014 was launch date. What have you scaled to today in terms of total customers on the platform?
Yes, I wouldn't mention the customer count, but we've got all four continents covered, customers in Asia, Europe, North and South America, and everything from retail, right, products that you and I would buy, to some of the most kind of hardcore materials that's supplying some of the biggest companies in the world.
I just want to get a general sense of if you're kind of a high volume or a high touch kind of play, right? So, I mean, are we talking like less than 100 enterprise customers or are you talking like thousands of middle market, you know, Yeah, thanks. So less than 100 customers because it's high price, big enterprise sales to some of the largest companies in the world. Yep.
Walk me through what your team looks like. And I'm specifically interested in how you've scaled your sales operation to go land those kinds of accounts. Yeah, sure. So I started the company with two others out of Stanford, both on the technical side, masters in AI.
And we've designed the team to be pretty evenly split between top AI and data science folks from Silicon Valley and elsewhere with supply chain veterans and experts in the space. So the team kind of looks like both halves of that brain. And we look like a typical enterprise kind of sales company. So a lot of product and development resources in-house based here in San Francisco.
And then the sales model is pretty, again, typical to enterprise sales, right? So we've got inside sales folks, executives running the large accounts internationally. And we kind of split by territory, if that's what you're asking. And what's the total team size? So we've got about 30 people today. We're a post-series A company. Yeah, I was going to ask that. So 30 people.
Are you all in San Fran? Almost all. We've got some folks in New York and Chicago as well, but most based here.
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Chapter 4: What pricing model does ClearMetal use for its services?
Okay. And I was loving the story. I was going, man, I'm going to love him even more if he says we're bootstrapped. But you're not. That's okay. I get it. How much have you raised total? So we've raised about $13 million total. And walk me through the thinking behind that. When did you say, okay, this is where we pour fuel on the fire. The economics make sense. Let's go raise. Yeah.
Yeah, good question. So we raised a $3 million seed from Innovation Endeavors, NEA, and some others in the industry. This was fall of 2015. We had gone out of grad school, bootstrapped for almost a year since incorporation. And what we had was about three paid pilots with significant results showing our ability to enhance the clarity of data and do predictions much more accurately.
So we said, hey, this is interesting. We has now been solved. Let's see if we can commercialize it. So we raised 3 million in seed. And then we started commercializing to the broader industry. And about 12 to 18 months, about 18 months after that, we were approached by both strategics and VCs who said, we see the supply chain is transforming. You guys are kind of the horse in the space.
And let's use additional capital to accelerate not only more product market fit, but broader commercialization. Go ahead. Spring of 2017, a little over a year ago, we raised a little over $9 million. 12 in total. How does this compare to Afredos or some of these other companies in the logistics and supply chain space? Great question. We're not in the brokerage business.
A lot of these platforms or marketplaces or brokers are connecting. We're not in that business. We're essentially the AI operating system, the analytics, the intelligence that the retailer manufacturer uses to understand as things are moving across the world. And after I've procured that freight, where are my shipments? What's going to happen to it?
And when will it arrive so I can optimize inventory? As you guys know, the task management space and team communication market is extremely hot. We've had many of the folks in the space on, but most recently Asana raised about $50 million, giving it about a $1.5 billion valuation up from 900 million bucks in its last round. So naturally,
I'm going to try out Asana and see why it's different from some of the other players and some things stand out immediately. First off, this thing essentially has replaced email and a few other forms of communication I used to launch Latka Magazine.
I was able to do it all inside of Asana, whether it's bringing in my developer who built the landing page for the magazine or my writers who write for the magazine or my designers who design the magazine and even the printers themselves. They're all able to easily use Asana, which is rare. Usually there's kind of a different tool for a different area of kind of specialty.
So having everyone in one spot made the magazine very efficient. We're now shipping over 10,000 magazines per month out to B2B SaaS CEOs could not have done it without Asana.
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Chapter 5: What is ClearMetal's customer base like?
He created clear metal after going and doing an internship at Hong Kong, realizing there's massive opportunity in this space, uh, really helps logistics tracking, you know, currently they're focused in essentially one sector. They want to go closer, kind of last mile delivered, right. And dive into that in terms of headspace and growing additional revenue channels. They're very much a
high, high touch play with contract values in the six to seven figure range. Next goal, call it maybe 10 million, somewhere in that range. They can go out, continue raising capital to really go in and dive deeper into this market, specifically spending a lot of that money on engineering headcount. Adam, thank you so much for taking us to the top. Yeah, thanks.