SaaS Interviews with CEOs, Startups, Founders
EngageRocket Targets $3m Raise on $15m Valuation For HR Tech Platform
26 Jul 2020
Chapter 1: How much funding has EngageRocket raised so far?
We raised a seed round from Venture Capitalists September last year. So how much total on the company? So 1.1 million US dollars.
Okay. And are you raising right now?
We're in the midst of it. Yes. We're going for a series A. How much do you want to raise ideally? Between three to five, three to five M's.
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Chapter 2: What is EngageRocket's current fundraising goal?
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We got to grow faster. Minimum is 100% over the past several years.
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He's the CEO of Engage Rocket, a tech company using real-time analytics to help businesses improve talent retention and productivity. Chitong, you ready to take us to the top? Absolutely. All right. So are you guys a pure play SaaS model? And if so, who are your customers?
Yeah, we're, I would say 90% pure play SaaS. Our customers on average have about 600 employees. We target mid-market enterprises, so between 500 to 5,000 employees. in size. And I'd say that at that size, you do need to add on a bit of services. So we do find ourselves also providing some services around that, around change management, some consulting, but most of it is still SaaS.
Okay. Now, Chitam, when you look at your total revenue over the past 12 months, what percent was pure SaaS versus professional services, would you say?
Yeah, about 90%, 90 plus percent. It's software revenue and then the rest are services.
Okay. Now, if we just look at the software side of the business, give me like a sweet spot, right? On average, what's the company going to pay you per year to use your technology?
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Chapter 3: What type of business model does EngageRocket use?
We blasted out people to our email contact list. But there wasn't a lot of traction. So a lot of these people in the group were actually strangers to us. We had no idea who they were. They came in through meetup.com as a platform. Oh, I see.
So meetup juiced it.
Yeah. Some came in through the data science groups and some other groups that HR groups.
Good. Well, yeah. So put this on a timeline. So your first article on Forbes was back on December 12th, 2016. And the title was here are five great opportunities HR departments can take in 2017. 4,000 views. You've now published pretty consistently since then as you've built your brand.
Today, when you look at your most successful organic keywords, the ones that drive you the most traffic, what's your number one?
um the the number one converting one no the number one in terms of total traffic in total traffic um we don't i i don't really know okay what's the converting one yeah the best converting one so far is employee engagement software singapore so we we get hit on that a lot and that converts within months so interesting okay that's really good so those are your first customers the meetup group the seo stuff how many customers are you serving now today
So we have 40 active customers. Till now, we've had more than 100, but we have 40 live and active ones that are with us today.
Okay, 40 at the price point you told me earlier, $1,500 United States dollars per month would put you at about $60,000 United States dollars per month in terms of revenue today. Is that right?
Yeah, that's right.
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Chapter 4: How did EngageRocket acquire its first customers?
So we're continuing to double down on outbound efforts in those markets. In Southeast Asia, it's a half a billion dollar addressable market today. Mostly we're looking at Indonesia and Thailand as pretty large markets where we have the ability to position ourselves as the market leader. So that's something that we're working on.
You mentioned you've had 100 customers, but there's only 40 active today, which means you have some churn. What's your annual churn look like right now on a revenue basis?
So our net retention rate is actually quite high. It's 101%.
But peel back the onion. What's the gross and expansion?
So the expansion revenue is about, for those customers that are within our ideal customer profile, which took us a good two and a half years to figure out, we've actually expanded by 25%.
So does that mean your churn annually is about 24%?
Yeah. The logo churn, you mean?
No, no, revenue churn. If your net revenue retention is 101% and your expansion is 25%, then by math's nature, your churn is one point lower.
Yeah, yeah. Okay, so I'm not sure how we... like how we're calculating net retention.
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