SaaS Interviews with CEOs, Startups, Founders
DataLab Hits $15m Revenue Charging Farmers Price Per Cow, Largest ACV $100,000
09 Jul 2022
Chapter 1: What was Datalab's revenue growth from 2008 to today?
And what was revenue back in 2008? Do you remember?
I would say $4 million.
Okay. And what have you grown it to today?
So today we're closely to $15 million. $1.5 million? $1.5 million, yeah.
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Chapter 2: What motivated Datalab to go public on the Ljubljana Stock Exchange?
My guest today is Andre Merkley. He's a lifelong IT nerd and founder of Datalab, the ERP leader in Southeast Europe. He then did the IPO and caught interest for farming and started development of farm management information systems, now building datalab.eu. Andre, are you ready to take us to the top? Sorry? Are you ready to take us to the top? Oh, yeah. Well, yeah, sure. All right. Very good.
So just to be clear, Datalab IPO-ed or your prior company IPO-ed?
No, Datalab IPO-ed, actually. Okay. We were the first technology IPO on the Ljubljana Stock Exchange. It's rather an essence market or a very sleepy market.
Chapter 3: How does Datalab price its software for farmers?
So we did not get the bang from the listing that we hoped for.
So this is the stock exchange in Slovenia that you IPO'd on. Why did you want all the pressure of being a publicly traded company? Why not stay private?
Well, we firmly believe in employee stock ownership, and it was very problematic to do it under the local legislation. Basically, the only way to really put it properly in place was to get listed.
I see.
When we were there. So that was our main actually goal. Not so much raising capital, but establishing value of the company.
So when did you guys IPO?
June 30th, 2008. So we got, yeah, three months before everything going down.
And what was revenue back in 2008? Do you remember?
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Chapter 4: Who are Datalab's primary customers in the farming industry?
I would say $4 million. Okay. And what have you grown it to today?
So today we're closely to 15 and one five, one five. Yeah. And we're stepping up, we're stepping up, um, extremely in the last, uh, two years. Uh, so we hope that we'll be getting the 50 in probably two to three years.
Now, before we go too deep on the economics, tell me who's buying this. Is it small farm managers or folks managing thousands of acres of farmland?
Mostly, we were successful with the large farms. What we found in farming is that it's the basic business principles that are extremely hard to make because you have such a variable environment.
You see, when you think about a factory, you have a predictable environment, you have everything that's under control while if you go planning for the farm, you've got all these variables and very complex processes and stuff like that.
And that's what we actually wanted to simplify, to really get an overview of all the resources in the farm and to help you plan, basically to help you manage your farm the way um, an industrial production would be managed.
And so how many, uh, farmers use you pay for you today?
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Chapter 5: What challenges do farmers face that Datalab aims to solve?
So I would say that we have roughly 500 farms, but our, I think our biggest is 120,000 hectares. So sorry.
That's your largest. And so what is the largest customer? What do they pay you per year?
We price our software per asset. So basically you would be paying us per cow or per flock of ship or per hectare of land or orchard or something like that. We're charging, depends on the market, but we would be charging from 1 to 1.8 euros per hectare per month.
I see. So can we take 120,000 actors times 1.8 times 12, the biggest customer pays you 2.5 million.
Well, it was a first customer, so it's quite discounted.
Ah, I see. Yeah. So, I mean, do you have anyone paying you more than a million per year? No, we don't have anyone.
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Chapter 6: What are the plans for Datalab to go private again?
So the largest, largest, uh, invoices or projects that we were, that we're making. are a hundred thousand per year or something like that.
Okay. Okay. Got it. That makes sense. And, and any, I mean, you're now public, any plans to go private again? Are there any advantages to going private?
Yeah. Just, just in the process of, of taking the company back private, uh, and, um, got in some investors and then scaling up.
How much do you have to raise to take the company private?
Four to five.
Four to five million dollars?
Yeah, it was four to five million plus what we have spare actually for stock buybacks. We would be able to remove almost the complete free float from the market and the listed company.
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Chapter 7: How does Datalab's team structure support its operations?
I see. And how much cash do you guys currently have on the balance sheet?
I can only tell you. I can't tell you currently, but I think In the last quarterly report, it was 3.5 or something like that.
Okay. So 3.5 of your own cash plus raise four or 5 million, then you could use that money to take the company private.
Yeah. With ease.
Interesting. And so what, I mean, why, why do that? You went public for a reason. You don't like it. Now you want to go private. What didn't you like about being public?
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Chapter 8: What future growth does Datalab anticipate in the next few years?
Um, well, first, first of all, uh, being public on, um, on, um, back country market is not the way to go. And we thought that the financial markets will consolidate and we basically hoped to get a backboard to also to some larger stock exchange that either the Vienna stock exchange would buy the Libyan stock exchange and we would be automatically listed and stuff like that.
Unfortunately, after 2008, everything went south and those plans did not materialize. We did not, Establish full potential. We're stuck on an illiquid market. And that became a hurdle to our raising capital because, again, being public in an unknown foreign market with unknown legislation decreases your enterprise value.
When did you start the company? What year? 1996. 1996. Wow. So did you bootstrap it from 1996 to 2008?
In 1996 to 2008, we were working on ERP systems for small and medium-sized businesses, which carry a lot of similarity.
My question was, did you bootstrap or did you raise capital in that time?
No, we completely bootstrapped. Actually, I went bankrupt in 1994 with my previous company. So actually, we were not even credit. I was not credit worthy. So it was basically the last paycheck. A garage... computers and, and a lot of will.
Why'd your last company go bankrupt in 95? What was the name of the company?
Uh, Gecko. We, we did wholesale of computer chips and, and, um, as it was fashion that day, we assembled, uh, PCs, personal computers importing from Taiwan, uh, assembling and selling the fixed computers.
And why did it go bankrupt?
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