SaaS Interviews with CEOs, Startups, Founders
1611 The Mobile Testing App Starbucks Uses Passes $6m in ARR, Bootstrapped
22 Dec 2019
Chapter 1: What is the main topic discussed in this episode?
They've got a big company that does many things in the telecom space. There's big software product that was called NetMera. They've got 150 enterprise customers paying three, four grand a month doing about 500 grand per month in revenue on this product. That's up from 350 grand just a year ago. So healthy growth.
Chapter 2: How has Netmera achieved its current revenue and customer base?
They launched in 2012. It's totally bootstrapped and profitable, which I love. They've got a team of 40 in Istanbul, Dubai and London as they as they obviously build the company. They're scaling 2% revenue churn annually. That's gross 15% expansion. So net revenue retention, 13%, sorry, 113% each year, $10,000 CAC. So payback period about four months.
Healthy companies scaling fast in the mobile engagement platform space. Hello, everybody. My guest today is Khan Bengal. He's been working in enterprise IT for more than two decades. For the last 10 years, he moved to the entrepreneurial side and brought a talented team together to build Netmera to revolutionize mobile app engagement, campaigning, and communications.
They're still working hard to expand the company into other regions and reach many apps, while they currently touch more than 150 million app users every single month. Khan, are you ready to take us to the top? Pardon? Are you ready to take us to the top? Yeah. Very good. Okay, so tell us about the company.
Chapter 3: What strategies does Netmera use for customer engagement and retention?
You said in the bio 150 million app users monthly. That's a big number, but what's that mean for your business model? How do you guys charge?
Yeah, we are in the mobile app engagement space that we analyze the user behavior inside the apps and also inside the websites, mobile websites. And then we do send campaigns, relevant campaigns to you based on your location or based on your past behavior or based on your interest. And we are working with enterprise companies like Vodafone or Yellow Pages, or Starbucks.
And they have huge applications, e-commerce applications, or mobile loyalty applications that have large number of users, such as Vodafone has maybe more than 20 million users, app users. And each time we get a customer, a large enterprise client on board, they bring us their users, and we start analyzing their users.
So it adopts, in the end, more than 100 million, or now more than 150 million users now.
That's great. And so help me understand kind of on average, what is an enterprise going to pay you per year to get access to this technology you've built?
Uh, we are, we are a SaaS company and we are charging per month or per annum based. And for annually, most enterprise customers prefer, of course, annual payments and they pay around 60,000 US dollars between 120,000 US dollars per year.
Okay. And so if we just, if we focus on kind of the smaller ends of 60 grand per, per year, what are they getting for that? Is it a number? Do you price off number of app users they have or some other pricing metric?
Yeah, yeah, exactly. We are charging based on their number of app users.
Interesting. Okay, great. Now that we understand the business and the pricing, Khan, put this on a timeline for us. When did you launch the company? What year?
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Chapter 4: What is the pricing model for enterprise customers at Netmera?
I think it's wonderful. So you bootstrapped, launched in 2012 and how many customers have you scaled to today?
Now we have more than 150, around 150 enterprise, small scale SM, but they're in the range of 20, 25 SME customers.
That's great. So if I take con that 150 kind of enterprise customers times that $60,000 ACV you told me earlier, I mean, that would put you guys somewhere around 700 and 750 grand a month right now for this tool. Is that accurate?
Uh, yeah, yeah. Uh, but not every customer pays the same, but we are, we are about 500,000.
Yeah. Okay, great. Okay. So about 500,000, uh, and where, if you're at 500,000 a month today, where were you about a year ago? So we can calculate growth.
Uh, next year. No, no, no.
Where were you one year ago?
Yeah. Uh, We are still growing very fast, moderately fast. We are growing 60, 70% per year.
Okay. So that would mean a year ago today, you would have been somewhere in the call at $350,000 a month range? Is that right? Yeah, exactly. That's great. Help us kind of educate.
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Chapter 5: How has the company scaled since its launch in 2012?
Do you guys look at those data points or no, not usually? Pardon? Do you use those data points to guide the business or no?
Yes. We look at the churn very, very closely. Net new names are very important again because majority of our growth is still coming from our new customers. So these are two metrics we're working. And also, we're watching closely
The success of our customers, which we measure the campaign effectiveness, their CTRs, general CTRs, the difference between iOS and Android, these are all metrics we're working toward.
That makes good sense. And then talk to me about getting the customer in the first place. So how much are you willing to spend to get a new $60,000 a year customer?
What's your CAC? It's around $10,000.
Oh, that's not that much at all for a $60,000 customer?
Yeah.
So you get paid back in, what is that, three, four months?
Yeah, exactly. The business is mature now, and we have a good reputation and name in our region, in EMEA region, I mean. So that helps. In the first two or three years, we spent a lot of time, effort, and energy, and also money on gaining customers. But now, regularly, we are getting good customers like banks, et cetera, and they are calling us. And I think we are good at the competition now.
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