SaaS Interviews with CEOs, Startups, Founders
Coro Breaks $25m ARR, Hits $600m Valuation Growing 300% YoY in CyberSecurity for Mid Market Space
01 Aug 2023
Chapter 1: What are Coro's recent achievements in cybersecurity?
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Quoro is all-in-one cybersecurity folks that help you get up to speed quickly, serving over 13,500 mid-market customers. They just broke $18 million in AR as of the end of 2022, hoping to grow that 300% this year, which means they would need to add about $36 million of new AR. He says they're on track to do that.
They just raised another Series C+, we'll call it, $75 million at around a $600 million valuation. His team is growing, a lot of talent, 297 folks with concentration opportunities. up there in Chicago as they look to continue to scale across their three key channels. Hey, folks, my guest today is Dror Leewer.
He is a serial entrepreneur and investor who took two companies public, sold three, and is now building the world's fastest-growing cybersecurity company at Coro.net. It's an enterprise-grade cybersecurity for the mid-market. Dror, are you ready to take us to the top?
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Chapter 2: How is Coro planning to achieve 300% growth this year?
Absolutely, Nathan. All right. So before we get into this sort of customer profile, the product updates over the last year, you did come on the show about a year ago. And I remember you said, quote, Nathan, we're targeting 18 million run rate target by the end of 2022. So my first question is, did you beat your goal? We did beat our goal. Okay. Now tell us how you did it.
What are your customers using you for and how are you growing? neglected people in the world of cybersecurity. So the entire cybersecurity industry is focused either on the very rich, the enterprise Fortune 500, or the consumer market. Nobody's focused on the economic backbone of the American economy, the mid-market companies that are actually 65% of the GDP.
We focus on these guys and we provide them with enterprise-grade security in a way that they can actually implement and protect themselves. So we've solved the four biggest problems that they've had and our growth, which has been 300% year-over-year for the past four years straight, with this year expected to be yet another 300% growth.
has shown... Do you think you'll break a 40 million run rate by December?
Chapter 3: What unique challenges do mid-market companies face in cybersecurity?
Oh, yeah. Yeah, I mean, that would be 300%. You're 18 million in 2022, so 300% year-over-year growth would be somewhere above 40, 45 million. Yeah, so our expectation is to beat that number. And the main reason is we are in this really unusual perfect storm where...
On the one hand side, the attackers are changing course and now attacking the mid-market companies and the small businesses as well, simply because, A, they can, and B, they're vulnerable. And it's much harder to go after the enterprise, which has much larger budgets. much more experienced cybersecurity teams, and is a lot better protected.
So I always equate this to if you're a burglar and you're walking down the street and there are two equal houses, but one has two Dobermans, a barbed wire fence, cameras, and an alarm system, and bars on the windows, and one has the window open, where would you go? And that's really what our attackers are doing. The bad guys are going after the people that it's easiest to go and grab.
So granted, their ROI is lower on a per attack basis, but they have a lot more of these attacks that they can execute. And now they've automated everything. And with all of the automated tools that are out there, it's much easier for them to execute those attacks. And they're going after these mid-market and smaller organizations.
Chapter 4: What strategies is Coro using to acquire new customers?
And you're very effective at talking to those users because you told me last year you'd already signed up 4,500 of them. These mid-market folks to use your tool, they were happy they're using it. Where are you today? How many paying customers? So it's triple that. Oh, wow. Okay. So you're about like 13,500 paying customers. Wow. What drove most of that growth?
Was it an outbound motion, inbound motion? What growth levers did you pull? So we actually have three different motions in parallel that we're going to market with. One is a direct outbound. We have a team in Chicago, very diligent, that is going out and engaging with potential customers and bringing them on board.
Chapter 5: How does Coro differentiate itself from competitors?
How many FTAs on that team? A total of about 100. Wow, 100 on the outbound team, okay. Yeah. And then... Maybe I'm exaggerating a little bit. It's more like 80 because I'm mixing up some of the direct with the channel. The second one is, of course, the channel team. So we are selling through very, very good partnerships that we have with MSPs, with MSSPs, with VARs, with master agents.
And they're also using us to open new doors where historically they couldn't sell cybersecurity into the market that we're selling because the offerings were too expensive and too complex and too labor intensive. And now that we've removed these three barriers, they are able to go to market and offer a cybersecurity solution to their mid-market customers as well.
And the third is through what we call technology partnerships. We have a team that focuses on tech partners where basically we become the cybersecurity component of what they sell. Name one.
Chapter 6: What partnerships is Coro leveraging for growth?
So an example is a company called Comply Auto. They provide compliance software to the automotive industry. So now they also offer security compliance. And that's really us. It's not white-labeled. It's co-branded, call it. So is Comply Auto bringing you the customers? Are you billing Comply Auto's customers directly? No, no. Comply Auto owns the relationship.
The customer knows that they're using a Coro product. We're not hiding that. But it's a partnership. The ownership of the account, the ownership of the customer is Comply Auto. We're just providing that cybersecurity engine to make sure that those automotive customers are protected and are compliant with
Chapter 7: What is Coro's current valuation and funding status?
With, in this case, the GLBA safeguard rules that they're now supposed to comply with. Does comply autos say, hey, we want a thousand seats here because that's what we think we can sell. You say here's a bulk discount and then they mark it up, whatever, 50 percent and then sell to the end user. What's the revenue relationship there? What's the partnership agreement like?
We don't disclose revenue relationships in public, but basically Comply Auto sells a package to their customer. We have a relationship with Comply Auto where they get our product for a fixed fee per seat and how they market up or how they sell it to their customers, their business.
So the reason I'm asking this is what prevents Comply Auto from undercutting a customer that's going to sign up directly on Quoro.net? They might see cheaper pricing on Comply Auto. We're not worried about that. We're not competing with our partners in any way.
We actually prefer that our partners win because from our perspective, there is a very strong sales multiplier when you're using partners. So we're not trying to compete with them on those customers. If the customer prefers to buy from Comply Auto... More power to them, more power to Comply Auto.
Chapter 8: How does Coro plan to use its recent funding for future growth?
We're very happy about that. Why would anyone ever buy it? If Comply Auto sells it, though, like let's say your ACV you told me last year is $2,700, right? So your website lists $2,700. But if Comply Auto lists the exact same thing at $1,000 for a year, basically your partners would effectively cannibalize your own direct revenue. You're saying you're okay with that? 100%. Okay, cool.
And then how is that different from the VAR agreements? or the channel team agreements? When you sign up a new channel partner, what is that relationship like? So very similar, we sell to our partners for a discount of the MSRP, and they mark it up, and they add on top of it also their services. So, for example, an MSP doesn't just sell product. They sell a service.
They help manage the platform on behalf of their customers. So from their perspective, their offering now is a lot more complete, and what we can give the MSP beyond that margin or that discount
that discount that they can, the haircut that they can get from it, they're actually getting a lot more from it because they are getting a new market open to them because now they can offer cybersecurity at a very reasonable cost to a customer to whom they could have probably offered only antivirus in the past because the price points are just so difficult.
And beyond the price point, maintaining a security stack is a very expensive thing from an HR perspective. And what we offer that customer, that MSP, that partner, is the ability to offer a stack that manages pretty much itself because of the engines that we have. So there's a lot less work that a human needs to be doing. So we've removed more than 95% of the human element
Through AI, through automation, through... So the same team cannot support a whole lot more customers from an MSP's perspective. So now I can go out and sell it at a very reasonable price. You're helping MSPs expand their margin. Absolutely. And expand their foothold within their existing customers. And, you know, in the MSP world, it's all about stickiness. Wallet share. Yeah. Yeah. Yep.
That makes tons of sense. Have there been any drastic change? You told me last year, your average customer is paying about 230 bucks a month. Has that changed drastically either up or down or is it about the same? Yeah, it's changed significantly. So first of all, with economics being what they are, we've raised our prices a little bit.
So last time we spoke, our prices were at about, I think they were about $6 per user. Now they're at about $8.99 per user. So that increased. But also the size of our customers has grown significantly. So now we're seeing customers that are more in the 700-seat
range uh whereas when we last spoke the range was more about 150 200 maybe yeah yeah okay um so i guess what does that mean in terms of the average annual contract value like maybe it's now instead of 3 000 it's looking more like four or five thousand on average per team it's actually more like uh nine 9500 9500 okay per team per year interesting do you have any million dollar accounts yet
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