SaaS Interviews with CEOs, Startups, Founders
1304 Raising $10m on $30m Pre Right Now for Video Feedback Platform, $5m ARR
18 Feb 2019
Chapter 1: What is Voxpopme and how does it help brands?
Launched this new company called Vox Pop Me. Helps big brands really do better sentiment analysis from consumers on whether it's products, market surveys, things like that. They got a team of 50 between the UK and the US. About 240 customers that pay on average, call it 1600 bucks a month historically. Now closer to 40, $60,000 ACVs. Doing about 400 grand per month in revenue.
That's up from 250 grand per month back in July of 2017. They've got net negative revenue turn. That's about negative three to negative 5%. That's annually. spending out 6,000 bucks to acquire a customer with a six-month payback, assuming lifetime value. It's up 36 months or 150 grand. They raised 5 million, currently raising a series B, hoping to raise maybe 10 million on a 30 million pre.
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.
Chapter 2: How has Voxpopme's revenue grown over the years?
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 Dave Kurthers. He's an entrepreneur specializing in high growth tech businesses and a video insight evangelist with global ambitions for growth and adventure.
As CEO at VoxPopMe, he has redefined the possibilities of video for market research and customer feedback. Dave, are you ready to take us to the top? Absolutely. Looking forward to it. Good. All right. Tell us about the company. What's VoxPopMe doing? How do you make money? Yeah, absolutely. So about six years ago, we had this idea that brands needed to get closer to consumers.
They needed to understand consumer feedback, what customers were saying about things, and that traditional ways of doing this just weren't fit for purpose. There'd been an explosion in mobile and in video, Snapchat, Instagram, Facebook. were all going towards more video.
Facebook Live, Snapchat Stories, all of these things were starting to evolve and it just, consumers were more comfortable than ever recording and sharing video in a selfie style. So we wanted to leverage that trend as a way for brands to be able to solicit feedback directly from their customers from a video perspective.
What we found was the video was kind of provided a really deep kind of connection. And so Dave, if I'm in, if I'm in, I'm making this up, if I'm in Burger King and I just checked out and I just finished my Whopper and I post a Snapchat about, oh my gosh, I'm stuffed. This Whopper was so good. How does your tech know that, you know, we're not friends on Snapchat?
How does it know that I mentioned Burger King and pull that video out for the sentiment analysis by Burger King? Yeah, so what we actually did is we've done a couple of things. The first was we created a mobile app that basically allowed brands access to consumers at an instant. So they could push a question they wanted. So think more kind of market research.
You're Burger King, you want to get feedback on the new Whopper recipe. You push a question out, who's had a Whopper in the last 30 days? We screen people in, they'll then record what did you think about it and things like that.
Our technology then takes all of that video, transcribes it, theme codes it, sentiment scores it, and basically makes analyzing a big set of unstructured video data fast, effective, and easy. How do you center that incentive structure though? Because I can tell you every time I go into CVS, they say, hey, at the bottom of the coupon, go take our quiz.
We want to know what your experience was like. I never, ever, ever have actually done it. So how are you actually getting consumers to go in and take the time to send that and answer that question from Burger King? Yeah, so there's a couple of ways. So with our mobile app, the incentive is cash. Cash is always king.
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Chapter 3: What innovative technology does Voxpopme use for video feedback?
You imagine we'd have had back and forth this whole conversation. It's just way easier to do it in this way. So how do the consumers, again, how would someone listening right now know that, oh, hey, Burger King just released a survey. You could go make a dollar if you respond. Yeah, so I mean, first they could download the Vox Pop Me app from the App Store.
So it's available for iOS and Android, as you'd imagine. So you can just download that and sign up. Wait, Dave, that seems like huge, huge friction. Have you had success getting people to download that? Yeah, we have thousands of users using the app every day. Obviously, there's a financial incentive, but people don't have to do that.
In terms of the CVS survey that you mentioned, I would say that was where we started the journey as a company. Hey, let's build an app and let's give these brands access to consumers. But what we came... obvious to us was a lot of our first client was actually Manchester City Soccer Club. They said, hey, we're already doing these surveys. Can you put your technology into these surveys?
So we developed a way to put our video capture into essentially any data collection, survey collection thing. And now all of a sudden our total addressable market was any survey in the world. And what we've really become is the kind of gold standard for video into any survey.
All of the big survey platforms, whether it's a Qualtrics, Cypher, SurveyMonkey, whatever, if customers want to put video questions into those platforms, they're coming to us, embedding our tech. Because on the back end, we've got really great analytics on the back end to sort through all of that infrastructure. And what's your revenue model? Is it a pure play SaaS business? Thank you.
Much easier. Because one of the key reasons... Oh, sorry. What was that? Sorry? No, Dave. What I was just saying, how do you make money? Is it a pure play SaaS business? Yeah, so our clients take a subscription, typically, we do have clients that work with us on an ad hoc basis. So they want to do just one specific project.
But yeah, typically, a client that has a subscription, they'll buy, you know, 2500 5000 10,000 videos to use over a 12 month period. And they'll use those and deploy those in multiple different ways to connect with different audiences. And I don't want to go down, I'm sure you have a lot of different customer stories you could share.
I want to avoid going down every cohort, but what would you say on average a customer is paying per month or per year? Yeah, I mean, I would say probably our average customers are probably spending $40,000 to $50,000 a year with us. Yep. And how many videos do they get for that? For that kind of investment, they're getting probably around 5,000 videos. Okay. Interesting.
So it's about 10, you basically charge $10 per video response. You have a dollar to a dollar 50 cost in terms of getting the consumer to send that video. And then you probably have other costs built in as well. Yeah, there's another cost of, you know, the transcription and the theme code and servers and hosting and things like that and cost of sale. But yeah, so that's kind of the model.
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Chapter 4: How does Voxpopme incentivize consumer feedback?
What's your CAC? Yes, so from a CAC perspective, where I would say typically over the last 12 months, it probably averages out to about $6,000. Okay. Kind of fully baked. And so what does that mean then your payback period is typically? The payback, yeah, I mean, the payback period is usually less than six months. Okay, six months, got it. Very good.
And I didn't get this early on, but I want to put this on a timeline real quick. When did you launch the company? What year? Yeah, sorry. So yeah, the company launched in 2013. And yeah, it really kind of, you know, we were angel funded, you know, bootstrapped for a little bit, founder funded.
And then we had, we actually kind of ended up going on this journey of a lot of, we did like probably eight angel rounds that were always small incremental, which, you know, in hindsight, I would never do again. Was it on the same term sheet that you just let roll over time or was brand new terms? It was constant.
I mean, it was always kind of just ordinary shares, no preference and stuff, but it was always kind of like, you know, you know, we'll raise 200, you know, 600 K, we'll raise another 200 at 1.2 and then 1.8 because we were sharing this good trajectory, but it meant we always had like four to five months runway, six months runway. And we're always then constantly renegotiating because we weren't.
So yeah, that would be a bigger lesson would be to try and, um, you know, raise. So what are you raising now? You said you're raising series B, how much do you want to raise? Yeah, so our price to raise $10 million, which, you know, is obviously modest and competitive some of today's series B rounds.
But I think, you know, given our A round was only two and a half million, it kind of, you know, it's kind of relevant to where we're at as a business at a stage. And if you do get the 10 million, what is your goal in terms of what valuation you rate it on? What would you feel comfortable with? Yeah, I mean, it's been interesting.
We've been digging in and doing a lot of research on various metrics and trying to really dial in on our space because you've got to really look at comparable businesses in this market, not just pick, oh, well, this has to be this and stuff. So we've seen... A lot of companies raising on kind of four and a half to five times next year's projected revenue at this stage.
We've also seen kind of typical, any variations between eight to 12 times current year's revenue. So it's those kind of things that we're kind of, those kind of parameters that we're looking in between. So you're doing between four and five right now in terms of ARR run rate. I mean, are you saying you're hoping to get like a $30 million pre-money valuation, something like that?
Yeah, that would be the kind of region that we're looking at, yeah. Yeah, yeah. So give you, you know, you're selling 25% of your business, right? Yeah, at this stage, yeah. Yeah. And do you think most of that, will you be able to raise that? Are you doing most of that stateside or are you raising from folks overseas? Yeah, it's been interesting.
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