SaaS Interviews with CEOs, Startups, Founders
1502 Branch.io Raised $129m To Cover 18 Months Burn (-$7m/mo) For Deep Linking Play
04 Sep 2019
Chapter 1: What is Branch.io and how does it serve its customers?
Branch.io launched in 2014, now serving between 110,000 paying customers generated from over 50,000 applications that actively use them for deep linking. They're charging on average between call it 60 and $80,000 ACVs. They've got a team of 300 people
Raised about 129 million bucks seven or eight months ago raising for call it 18 months of burn coverage they're turning for less than 5% of the revenue annually and now modest focused on driving additional expansion revenue in our cohort hoping to drive 100% year over year growth again coming 30% from expansion 70% from new. Hello, everyone. My guest today is Mada Sagada.
She is leading marketing as a co founder of branch.io the industry leading mobile measurement and deep linking platform trusted by the most top ranking apps to increase efficiency, and revenue. She was born and raised in Romania and came to the U.S. to study electrical and computer engineering at Cornell, earned her master's of engineering and MBA from Stanford.
Mada, you ready to take us to the top?
Yes.
This is great. Well, first of all, I can't wait to jump into Branch. This is a tool that I know a lot of my audience use as some of the top SaaS CEOs in the world. A lot of them have mobile apps and they love using Branch. This is a treat for me. Thanks for coming on.
Yeah, thanks for having me.
All right, so for those people that are not familiar, tell us what the company does and are you pure play SaaS in terms of your business model?
Yeah, so we're a mobile linking and attribution platform. And I know that sounds like a lot, but I promise you everyone listening to this podcast has used Branch, has Branch on their phone. So imagine someone sends you a link to a house in Airbnb. You click on the link, the app magically opens to that house. That's actually not that easy to do.
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Chapter 2: What is the business model and pricing strategy of Branch.io?
How'd you meet your co founders? What'd that look like?
Oh yeah, it's a funny story. We were in business school together and we decided we wanted to start a company. And this was around graduation, maybe a month before graduation, but we had been working together for a year and a half and had worked on three different projects. Fitbit for dogs, photo book printing app, which actually gave us the idea of branch. We were trying to grow our own app.
We had a really hard time understanding how our users got into the app and we couldn't take them to the right photo book. And then we also tried the printing SDK that also didn't work. But most of that time, most of the year and a half, I think about like 14 months out of that was actually spent on the app. And that's how the idea of a branch came.
How many of you guys are there? Just two of you guys as co-founders?
We're actually four co-founders. We were initially three that started on the app and then Dimitri joined us. Our investors introduced us. So he joined us, I think, halfway through the app.
That's great. And you just mentioned investors. So you've raised, I know you've raised, I think a pretty large amount. How much have you raised to date? Over 200. My immediate question is I'm being polarizing on purpose to give you a chance to respond, but why on earth do you need almost a quarter of a billion dollars to build this technology?
So we were free in 30 days. We only started building our enterprise solutions about two and a half, three years ago. And to really change the way people discover mobile content online, you need a lot of money to build a lot of infrastructure. I will not tell you how much our Amazon bill is. We are in over 50,000 apps. And, you know, I think 60 or 70% of the top 200 apps have branch.
And it is a lot of infrastructure. And this idea that we wanted to start with our linking being free is And when enabling like anyone to build better linking for their users meant that we had to build a lot of infrastructure of the top kind of getting started. Then we started selling and building our enterprise solutions, but that was a little bit later.
What year was that? What year do you really start thinking about enterprise? And I think it was end of 2016. 2016. Okay. And that's where you started moving from. I'm making this up. You had like a 50 or $40 a month kind of small business kind of really free. It was all free. So you went directly from free to enterprise.
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Chapter 3: How has Branch.io scaled since its launch in 2014?
And we can do it better. We can build the journeys, but we can also build really great targeting. So you can show certain banners to certain people. That was the first one, and that's how we started. The same one was with email. There's this issue where an email provider adds tracking to their links. So when you click on the link, it actually breaks the deep link.
Or if you keep the deep link, it breaks that track. So we actually went and integrated with all these email service providers, like Salesforce and many others, basically gave someone a solution that worked and deep linking from email out of the box. We didn't have to actually work and do any work around for it.
So all of our solutions really kind of came from problems that we saw with our customers or ways that we saw them that were building things on top of our links already.
So with these upsells, what has that allowed you and your sales team to drive in terms of expansion revenue on the core that signs up a year ago? I mean, are we saying like 20% year over year, 50% or somewhere in between?
Honestly, I don't know that off the top of my head.
That's okay. That's okay. Do you know what churn numbers are in terms of percentage, like 5% annual churn or 50% or whatever it is? Less than 5%. Less than 5%. Okay. And that's gross churn.
Yes. We do have very, very little churn. Most of our churn is actually, I think more than half of our churn is people going out to business.
Yeah, yeah, yeah. So less than 5% kind of annual gross revenue churn. You then have to add back expansion on top of that. So you get your net revenue retention, I assume, is somewhere way north of 100%, right? Yeah. Yeah. Is that a priority? Like, as you think in your CMO role, right now, where's most of your time being spent? Top of funnel stuff? Middle funnel expansion?
Top of funnel. Top of funnel, middle of funnel, definitely because we're so new and we haven't done as much on expansion. And that's one of my big projects. I like to think about doing more customer marketing. Right now, the way our marketing team is measured is all new accounts.
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Chapter 4: What challenges did the founders face while starting Branch.io?
Yeah, you're saying, Nathan, going from $1 to $3 is 300% year over year growth.
Yeah, obviously, we didn't start. We started because we already had the team and we actually started pretty high. So, numbers, like revenue is looking really great and we have been growing. But I see what you're saying, right? When you get to $100 million, it's really hard to die.
Very difficult. When do you think that is for you? You think it's going to hit that in the next like two, three years or this year? Or what feels like a stretch goal to you?
We don't talk that much about revenue. That's not, we decided to not actually talk about it.
Well, ignore what you're actually doing. I'm just talking about, you said, you know, once we get to a hundred, that would be very hard to keep doubling year over year. Do you generally, I mean, does it feel like a stretch goal this year to hit that? Or is that more like a five-year plan?
It's not a five-year plan. I'm really not comfortable talking about that.
That's okay. Talk to me a little bit more about the team today. So how many folks?
300.
Okay. And what's the breakdown? Like how many are on your team versus your engineering?
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