SaaS Interviews with CEOs, Startups, Founders
22 yo Launches B2B Fraud Prevention SaaS That Will Tell you if the China Steel Company is Real or Not
31 Aug 2023
Chapter 1: What is the main topic discussed in this episode?
verified.com.
Chapter 2: What is the main focus of Verified's fraud prevention service?
It's fraud prevention in the B2B space. If you're trying to do a deal with a steel manufacturer in China, he'll tell you if they're legit or not. Same thing in the oil industry, very prevalent considering what's happening with sanctions in Russia right now.
They're doing a business with 27 customers doing 7,800 per year right now in terms of run rate revenue, each customer paying on average $24 per month with consider raising $300,000 at a $3 million valuation selling it, you know, call it 10% of the companies look to scale. He wants that credibility in the marketplace right now with this team of two as they launch. Hey, folks.
My guest today is Farhan Afsahi. He's a 22-year-old, started his first startup when he was 18, which is a hybrid of Zoom and Moodle. It was called Edpex. Now he's working on building a web hosting startup called Xgrid. Sorry, he did that. In the meantime, he learned a lot about design and software development, now working on Verified for the last 10 months. That's V-E-R-I-F-I-E-T.com.
Farhan, you ready to take us to the top? Yeah. All right.
What is Verified? So Verified basically, it's like Stripe, but for verification. We provide verification APIs for B2B companies that want to learn more about other companies they want to work with. and get the company information like company status, registration date, and other data that they might need to verify the legitimacy of the company they want to work with.
So basically, we're building this service for enterprise-type customers because of the regulatory requirements that they need to abide with.
that was set forth by the governments uh and yeah that's basically it farhan what's your unique mousetrap here there's a lot of companies that sell data on other companies zoom info bombora cognizant there's a lot of them you know a clear bit what's the unique piece of data that you get that nobody else gets or other people have a hard time getting
So they're not a verification and fraud detection company. So we're focusing on fraud prevention, mostly, and verification part of the job. So they're not mostly connected to company data sources, government data sources, but we are.
For example, if you want to work for the company in China, you're based in the US and you want to learn more if you can trust the company you want to work with in China. You just entered a name in our program. And it will give you a basic score that whether that company has any type of red flags or not.
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Chapter 3: How does Verified differentiate itself from competitors in the B2B space?
About nine months ago.
Okay, so launched the company in 2022, got your first customer. Where did you find the first customer? He was a friend of my father. Ah, okay. Is your father in defense or security or fraud? No, he's in the logistics industry, yeah. Interesting, interesting. Do you have any kind of cyber background or fraud detective background? Not much, no. Not much, okay. Got it.
So I guess that was your first customer. Fast forward to today, how many customers are you working with?
So right now we have about 380 users out of those 380, about 27 are paying customers and our ARR right now is at $7,800 per year.
That's great. Yeah. So, so 27 folks paying 75 a month would be about 2K in MRR. You just said, you know, 7,800 per year, but you know, so maybe, maybe the ARPU is more like 50 bucks and the MRR is more like a thousand. So you're doing, you know, you know, $10,000 a year right now, something like that. Yeah.
I see.
That's great. Well, congrats on getting this off the ground. Have you done it yourself or do you have a co-founder? I have two other people working on this as well.
We're working on building and launching every one of our APIs every day.
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Chapter 4: What unique data sources does Verified utilize for fraud detection?
Were you nice at the beginning? You split equity evenly or you took the majority? No, no, no. Evenly. Looking back now, you're a year in. Was that the right choice to do it evenly?
yeah look uh normally i don't care about these things because these things are always like this bates a lot of time so we're going to put as much as output as we can so let's just focus on building a product and getting more customers so you know i don't care about having 50 or like 33 percent so yeah you you will if you sweat for 10 years and build into a billion dollar company
but we still don't have a billion dollar company.
So let's have a billion dollar company and then. Well, you can't change your equity split from 30 to 15 once you have a billion in revenue, then it's much harder. Yeah, but like we're equals in this, yeah. That makes sense, that makes sense. I'm just pushing you. Okay, this is great. Now, have you bootstrapped the company or did you raise capital? bootstrapped. Very cool.
Any plans to raise or you want to say bootstrapped? No, no, no. We have to raise. But not for having money reasons. Because right now we're working with government offices that provide their API services. When they do, also want to check our company if we have good backers, investors that will add credibility to our name as well. So
that's one of the most thing as in the same time to get more enterprise customers. Like for example, since 10 months ago, a lot of enterprises and like banks like Wells Fargo, Maybank, Cheaper Cash, like Corner Shop, which is a subsidiary of Uber, Shopify have visited our website. Some of them scheduled the demo to see how they want to use our products. So they're eager to use it.
So how much are you targeting for Honduras? so right now about like the normal pre-seed seed round so about like between 200 to 500 so that that's pretty much the same thing um and at the same time like in the meantime uh we need this type of uh investors in the b2b step space because most of our customers that we're going to target are like fintechs big fintechs like banks and uh
to get in touch with these type of companies and landing them as customers having some sort of a connection to them of course so far if someone offered you 500k out of 2 million post money valuation or 2 million cap would you take that deal uh so 500 for two million post money post money okay you're selling 25 of the company i don't think so no You would say no.
Okay. So what valuation are you targeting? So, as I said, like, for example, 25% is a lot today. Like for 25% of the company, 500K is a lot actually. It's low actually. So if it's about like 300K for like 10% of the company, yeah.
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Chapter 5: How does Verified handle B2B fraud cases, specifically with international companies?
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