SaaS Interviews with CEOs, Startups, Founders
1703 Virus Will Drive Major Growth at This SaaS Company as Restaurants Move Delivery "In House", $20m+ Revenue
23 Mar 2020
Chapter 1: What is the main focus of LogiNext in the delivery industry?
Logitech is playing in a very interesting space.
Chapter 2: How does LogiNext help major brands like McDonald's streamline their delivery process?
They help companies like McDonald's, Starbucks in-house their delivery team so they don't have to rely on Uber Eats. Very interesting time for him. He's sitting on over, you know, call it $39 million in cash. Two acquisitions coming down the pipeline. Economics look good. Over 130% net revenue retention. Serving over 100 customers.
Again, as he looks to continue scaling growth, hopefully hitting $30 million in ARR by the end of this year. Currently at about, call it $15 to $20 million in ARR. Hey guys, my guest today is Dhruvil Sanghvi. He is the CEO and founder of a company called Loginext Solutions. Loginext specifically is where you can look him up.
He's been recognized as one of the youngest and fastest growing SaaS CEOs in the US, serving the transportation, automation, and delivery experience platform space. All right, Dhruvil, you ready to take us to the top?
Chapter 3: What growth metrics is LogiNext currently experiencing?
I am. Good to be here.
So these are a lot of big words here in the bio. Who are you selling to? Name a customer.
One of our largest customers is McDonald's. We work with them over more than five countries right now across the world.
Okay. How do they use you?
McDonald's used to have one of the exclusive partnerships with Uber Eats, which expired in 2018. And as you would have seen, a lot of food delivery, large chains, they hate their margins. And they end up creating a dependency for a delivery business, which is one of the most critical businesses today.
And especially in the whole coronavirus that is going on all around us, you would have seen the delivery demand is just increasing from customers more and more. So with that macro trend, likes of McDonald's and such large chains, they are trying to move away and build their own flexible layer to manage their own customer experience. That means next time when you go to
come to McDonald's.com or download their own app, and then they want to communicate how the driver is coming to you, what the ETA is, what the charges should be for delivery, and if there are delays, what happens to engage you next time when you want to order and stuff like that. And you don't want to outsource that to an Uber Eats or any other aggregator.
And that entire piece behind the scene, from order capturing to ETA calculation to real-time visibility of the driver, to creating great customer experience over their own fleet of contractors or third-party fleets. We cover all these things in our platform by providing them one single unified SaaS technology.
When you came on in November of 2018, you articulated you were serving out 50 customers at that point. How many are you working with now today?
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Chapter 4: How has LogiNext's customer base changed since 2018?
That's something which has grown significantly well. We are right now, our current ACV is $75,000. So a lot of our growth has come from expansion, where our expansions used to be very close to 105% net year-on-year. Our expansion revenue has grown from 105% to 135% year-on-year. Break that down.
Chapter 5: What is LogiNext's current Annual Recurring Revenue (ARR) and growth projection?
Break that down. What's gross revenue churn and then add back expansion to get the 135%?
Our gross churn still comes to about like 5% to 7%, 5%, let's say, annually. And then expansion comes to about 40%, which is 140. So net comes to about 135.
Yep, yep, that's great. And then are you still pricing based off number of assets managed, number of trucks managed?
Yes, our pricing model still remains the same. It's depending on number of drivers or trucks which use our platform.
Okay, and have you done all this just still with a 10.5 million raise or did you go raise more money?
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Chapter 6: What strategies does LogiNext use to manage customer acquisition costs?
We just raised our Series B in December. We announced that in January. The last round of Series B was $39 million. So our total base so far is 49.5 to be accurate. And we haven't deployed any capital yet because we have been just kind of figuring out our business plan around how to really make the most of this sad outcome, but an opportunity for us as a business from a delivery perspective.
We'll be right back. for us okay they enable you to do this globally they have incredible redundancy and they protect the most critical components of our app infrastructures including our DNS domain name system so you can set this bad boy up with just a few clicks or API calls so that you and your team can spend more time innovating even if
If it's virtually on zoom calls these days to get the offer, visit f5.com forward slash top. That's F the number five.com forward slash T O P. It's all a big, beautiful free trial. These guys have been doing it for 20 years. So go to f5.com forward slash top to get started today. Yeah, you can say it's, you know, it's a tragedy.
But if you're sitting on cash, it's also a great opportunity, especially for what you're doing. I mean, if everyone's going to be trying to if you can't go to McDonald's anymore and sit or Starbucks like they all want it and they don't want to get addicted to Uber Eats because they lose leverage and margin. They need you. You should you should grow 300 percent over the next four months.
Well, that's the plan. That's why we want to make sure that we leverage this trend very carefully. I think what we have seen over the last five years of execution is that execution is just one part of it. But if you try to tag along with the market trend, that can pull you much faster than you trying to push your product into market. So that's one thing great happening to us.
We have great cash flow already in the bank. So we are ramping up on hiring. We are also seeing a lot of people. How many are on the team today? Go ahead.
How many on the team today?
Wrapping up to 250, but we have just started.
Sorry, Drewville, you said 200 early, wrapping to 250? Yes. Okay. How many engineers?
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Chapter 7: What acquisitions is LogiNext planning, and what are their strategic goals?
In fact, we have 60% of where our backend offices and our sales and support offices are in the US.
Okay. And obviously just there's around. So you've got your burn more than covered, but in a time like this, I mean, what are you burning per month? You're talking like a million a month, 500 grand a month, a hundred grand a month.
200 grand a month.
200. Okay.
Yeah. So it's significantly lower. We will be ramping up the burn to close to a million dollars, but we will not go beyond that.
Yeah. Very good. And then from a growth perspective, have you passed that $20 million ARR mark yet? Yes. Okay. And what do you think you'll end this year at?
Um, I think we'll be, we will still be growing at a hundred percent, uh, year on year. So our plan was to initially close December, 2020 at 150%. But I think from our current numbers, we will be growing at about a hundred percent. Now we'll be looking at the last two months off, you know, slower sales closures and stuff like that. Uh, but 2021 is going to be even faster.
So that's what that we are building towards now. Uh, we already have a strong pipeline for December, 2020. Uh, what is that?
What's that number though? On a numerical basis, not a revenue and not a percent. Is that 30 million in ARR by the end of this year? Is that the target?
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Chapter 8: What personal insights does the CEO share about his entrepreneurial journey?
Maybe it will go to 80 or 90K, but that's when we will stabilize, which still allows us to offer a great payback on our books in terms of we kind of recover our customer cost in less than one year. which is what the standard target is.
Any big acquisitions you're about to announce, especially considering everything is cheap and you've got cash in the bank?
We are targeting two acquisitions. We, in fact, had actually raised additional money in this round just to do that, irrespective of the market situation. The good part is that we may be able to get it in a cheaper way. But we are looking to acquire one company in Europe and one in Asia. The Asian company is going to be about less than 10 people, which will be more of an acqui-hire.
And the European one is going to be more for market expansion.
Do either of those have more than $3 million in ARR themselves?
No.
No. Okay, got it. So these are really like you're buying the tech stack and the people.
Both of them are like between one and three.
Yeah, yeah. Okay, very good. Let's wrap up with the famous five. Number one, favorite business book? Hard Things About Hard Things. Number two, is there a CEO you're following or study? Jack Ma. Number three, what's your favorite online tool for building your company?
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