SaaS Interviews with CEOs, Startups, Founders
Edtech SaaS Breaks $4m, Looking at $10m Series B Next
19 Feb 2022
Chapter 1: What product did Yellowdig launch in 2019?
So we launched the product in 2019. I think we hit a million revenue in 2020.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey, folks. My guest today is Shonak Roy.
He's the founder and CEO of Yellowdig, a community-driven active learning platform adopted by over 130 colleges and universities, K-12 schools, and corporate training clients. Their mission is to transform every classroom into an active and experimental learning community. Shonak, you ready to take us to the top?
Yep.
Happy to be here. So who's paying for this? Is it the universities directly or is it the students?
We have both. So in some cases, universities pay for it. But a lot of the cases, students will directly pay either through the bookstore or they will pay through a credit card.
How do you manage it? I mean, those are very different sales motions. Schools are hard to sell. Students, you know, it's easy to sell, but they churn way more.
That's right. So we make it easy for our clients to adopt our technology. So if you imagine, most of our clients are higher education institutions and they have long sales cycles. So we make it easy for any professor who wants to use our technology They can either go to the institution and say they want to buy a license.
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Chapter 2: How does Yellowdig generate revenue from universities and students?
What is your biggest university? How many seats do they pay for?
So, you know, we, I mean, biggest university, I would say Arizona State is a big client of us. They were one of our first users of the platform. And we have an enterprise license with Arizona. So that's a very unique model, you know, for sponsoring your clients.
So usage, of course, grown over the years, you know, in the University of Arizona, but for us, for, you know, we have over 130 universities now. So depending on, every school has, sometimes, you know, one school has three different licensing models. Sometimes like Department of Arts and Sciences actually bought the student license.
So the students are directly playing, but maybe for another business school, they have an enterprise license where they are paying for the entire school to us.
I see. Got it. So I guess let's just talk about the 80% of revenue that comes from these 830 universities. I guess how many paid seats across all 830 universities? Maybe that's the right question.
So right last year, we had about 200,000 students who used our platform in a variety of ways. So some of them were part of enterprise license. Some of them were direct student pay. So that's a total pool. And in terms of our pricing, of course, if the university has adopted us, their pricing is lower than a school that is using us in a couple of courses or programs.
Well, that's why I'm asking. So ignore the total pool of 200,000. You're saying 80% of that. So about 100 and what? 160,000 is coming directly through an enterprise deal with the school. Okay. Got it. So if I take 160,000 seats divided by what? 830, that means the average number of seats is about 200 per university.
Um, yeah, that's, uh, that sounds reasonable.
Okay. So if I, if a university is listening right now and they reach out to you and sign up, what are you going to charge them per seat for 200, if a 200 seat deal?
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Chapter 3: What is the pricing structure for using Yellowdig in courses?
And were you the sole founder at the start, 100%?
That's right.
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Again, both plural founderpath.com forward slash products forward slash valuations. When you look at... So obviously, someone signing up for one seat is going to pay the full $12.50 a seat for one class. But someone signing up for 1000 seats, you're giving a discount too. If you look at the average across all your paid seats, what would you say the average paid seat is?
It's very hard to say. I don't have the number right now with me. The average is definitely lower than $12.95.
Yeah, yeah. I mean, because the reason I'm asking, right? So I'm trying to back into your revenue, right? If you have 200,000 paid seats at $12 per month per seat, it's $2.4 million a month in revenue. I'd love for you to be there one day. I don't think you're there yet, though.
Yes, so that's a good point. So just a couple of other things to mention here is the $12.95 is for per course. A course can run between three and four months. So that's one price you pay for the entire users in that particular course. So it's not by month.
Oh, it's just, got it. So the course could be for six months.
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Chapter 4: How has Yellowdig's revenue evolved since its launch?
We, you know, I mean, just to be, we have to be realistic. So, you know, when we started the process, we started scaling the team last year. So the last year's goal was to get a bit of the pipeline and build a relationship. So, you know, flexible year one, we are very flexible year two onwards. We started to put a quote on what we see some of the salespeople.
I mean, if you have five people, if somebody is kind of going and hitting a certain number, we know that that's possible. That's kind of when we play for year two, that's kind of the bar we set for the rest of the team.
Of the 30 people, how many are engineers?
um, about like 12 people are engineers abroad in the engineering team.
Okay. Interesting. Okay. Very cool. So, so looking at raising past called a million dollar run rate in 2020, um, you know, to be able to go out and do it, go from a 3.5 series a to 10 million, you know, you gotta be, I mean, I wouldn't say at least tripling at this stage. So, I mean, do you guys think you can get above six, 7 million bucks in ARR this contracted ARR this year?
We'll see. It's hard to say right now, but of course, we are talking to a lot of people right now. So we'll see how quickly we can grow.
Is it fair to say since 2020, though, you've grown at least 100% year over year? Since 2020? Last year? 24 months ago. No, 2020. That would be two years ago.
That's right. If we look at, yeah, it was close to 100%. I don't know whether it's 100% exactly, but yeah, close to that number.
Around. Got it. So you go from a million to 2 million to around 4 million today, hoping to continue to scale past there.
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