SaaS Interviews with CEOs, Startups, Founders
1588 Why 450 Enterprises Pay Him $45M+ in ARR To Help With Employee Volunteering and Donation Programs
29 Nov 2019
Chapter 1: What is Benevity and how does it support employee engagement?
founded Benevity as a B Corp many, many years ago, probably transitioned to B Corp, but back in 2008, now 500 people, again, focused on helping big enterprise brands engage their employees and retain their employees by helping them figure out how they can give back, how they can volunteer.
Currently, 450 customers, we're just talking about their SaaS revenue, which makes up about 50% of their revenue, but about 450 customers, call it $100,000 ACV on average, but some smaller, some bigger, call it 45 million bucks in AR. 47 year over year growth, which is obviously healthy. 98% logo retention annually, net revenue retention over 120%. CAC super, super low.
A lot of their stuff is inbound via their team based in Canada and other remote locations. Hello, everyone. My guest today is Brian DeLottenville. He is the CEO of a company called Benevity, the global leader in CSR and employee engagement software.
Chapter 2: How does Benevity generate revenue and what is its business model?
Brian helps Fortune 1000 clients reinvent corporate giving programs in a way that provides better social and business returns while simultaneously tackling the biggest struggles in the social impact landscape. Brian, are you ready to take us to the top? I will take you as high as I can. How's that? Hey, that works for me. All right.
So for people that don't understand this space, how would you kind of describe the business in a sentence or two? And what is your revenue model? How do you support yourself? So we're probably in the intersection of CSR, HR, and brand.
Chapter 3: What are some successful use cases of Benevity's platform?
So we're trying to help companies engage employees and customers around purpose, meaning, and impact. Our business model is, we kind of have an API suite, so that's slightly separate, but the bulk of our revenue and business comes from our cloud product, which is an employee giving, volunteering, grants management kind of platform.
And so we have professional services, revenue implementation, managed services fees, subscription revenue based on eligible employees, and then a pizza slice transaction processing fee. Okay. And if you look at kind of past, just so we can understand the revenue mix, the past 12 months, if we look at your revenue pies, 100%, what percent was just pure SaaS? Uh, 50. Okay. So fairly significant.
Chapter 4: How does Benevity measure its social impact and client success?
Yeah. That's great. Um, okay. So with that in mind, um, let's break down the use case, kind of a use case a little bit more. So is there a company you can talk about that uses you and specifically, can you, can you kind of share exactly how they use you? Sure. Uh, we'll, we'll pick, um, maybe the biggest and best program in the world is, uh, Microsoft is, is a client horse.
So they, um, they use our, uh, SaaS product and they call it Microsoft Gives or something. So it's kind of white labeled by different companies.
Chapter 5: What is the significance of being a B Corporation for Benevity?
I think the only client that uses it and calls it Benevity is Apple. So they would do their employee giving and volunteering and grant making through our platform. And so that they get... single user experience and coherent reporting across those different sort of budget cycles. Okay, so it's really like a report is what I'm trying to understand, though, right?
So people are listening going away, why do they need help with that? So really, it's helping identify giving back opportunities reporting on what the activities look like, what else?
Yeah, so, I mean, at its essence, it's trying to help companies help people be their best selves and do that through a democratized, user-centric approach to searching for and giving to charities of choice with or without corporate matching, searching for volunteering opportunities, those sorts of things. Got it. Is that a time thing or a money thing?
Chapter 6: How does Benevity ensure client retention and satisfaction?
They're looking to donate, you know, the app Microsoft, they have to give 20 hours per month or it's a thousand bucks at the end of the year. Here's how you can donate to. It's time, money, and product, um, could be skills-based volunteering around board, um,
board participation or helping charitable recipients of their product giveaways, implement them, those sorts of things, or just painting a fence. I mean, it depends on the individual. And give me a sense, I'm sure you have many different customer cohorts, but just for the sake of time, what would the average kind of logo or brand pay you per year to get this kind of tool? Just the SaaS component.
Uh, on average, probably a hundred thousand ish. Yeah. So does this mean, I mean, the reason I ask at that price point, you really can put an inside sales team behind it.
Chapter 7: What growth strategies has Benevity implemented to expand its client base?
You can afford to put significant touch on the sale. Yes. I mean, we're, we're, uh, unfortunately, I mean, we're, we're turning away probably 60 plus percent of our inbounds because they're too small for our deployment model. So it is, it is fairly high. What's too small for you in terms of team size? Right now it's anything below 500 employees, but we tend to focus more on 5,000 and above.
And put this story kind of on a timeline for me. When did you launch the company? We've been around since 2008, spent a couple of years building out the back end and the platform, the receiving entities in the various countries, which is a big part of the moat, if you will, in this space. And then we built the cloud product in 2011.
Chapter 8: What are the future goals and challenges for Benevity?
And so we're unfettered by revenue for the first few years. So how did you support yourself? Did you guys raise early on? Yeah, I've been fortunate. I had a couple of equity events in growth companies. And so I funded each of the angel rounds in the early days and we avoided institutional money until our metrics were pretty compelling. Yeah, that's obviously a nice place to be there.
Help me understand though, your own personal capital plus investment dollars, total capital in the company to date is about what? Uh-huh. Not really. We have a private equity investor that now owns the majority of it. Oh, okay. When did that happen? Well, the first firm came in at 2015, a firm called JMI Equity. And last January, General Atlantic came in meaningfully and
and took out most of the original angels and financed a couple of small acquisitions and set us up to sort of realize the potential of this thing. Besides the acquisitions and paying up the early investors, did any of that money go to the balance sheet or was all really secondary? No, there was some treasury as well. What does that mean, treasury? Went into the company coffers. Different term.
I haven't heard that one before. Very good. Well, look, my research team based off public filings, I mean, it looks like before this kind of stuff happened, about $38 million has gone into the company. I mean, is that fairly accurate? Before GA? No, no, with GA and JMI, both those together, about $38 million has gone in. Canadian? Canadian. Yeah. No, that was the JMI transaction in 2015.
Oh, I see. Got it. It would have been, you know, GA was probably a nine-figure investment. Got it. So the GA one was undisclosed. The JMI one was 38 back before that. Yes. Got it. Fair enough. That's great. The bulk of which was secondary back then as well. Yeah. So help me understand as a founder, that's exited a couple of companies.
Um, you know, we have a lot of, we have a lot of founders like you that listened to the show, you know, maybe had a 600, 500, 400, you know, million dollar exit in the past. How do you decide, you know, many people would say, well, listen, it's great. You have your own money, but you shouldn't risk it if you can help it. Right. You're backable now.
So, so how did you really, that battle in your head? I mean, how did you say, okay, now's the time to go 38 million from JMI versus keep using your own money and keep building? Well, I mean, uh, For one thing, we're a B corporation, so the goal in this was not necessarily just the rapacious pursuit of another exit and profit.
We were really trying to scale this thing to make doing well by doing good more than a catchy tagline. So that did have some influence on the extent of and of my willingness to use my own funds. And we had a very supportive angel network of oil and gas folks here in Calgary.
And so we really wanted to wait until the capital was something of a commodity and we could choose the right fit in terms of the private equity firm around culture and strategic value and some of those sorts of things. So I'm not sure if that answers the question exactly. No, it does. I think it's fair. I do think B Corps are still kind of sexy and new.
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