SaaS Interviews with CEOs, Startups, Founders
Fashion Brand Supply Chain Management SaaS hits $600k ARR, $6m Valuation
29 Jan 2022
Chapter 1: What is the current revenue for the sustainability management platform?
50 brands paying at that average price you told me earlier, $1,000 a month, that would mean you guys are doing about $50,000 a month in revenue right now. Is that about right?
Yeah.
And if that's where you're at today, where were you exactly a year ago? Do you remember?
Basically nothing, I would say.
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 it is Peter Mercurt.
He's a tech wizard with strong business knowledge on how to run a company successfully. He started to realize early on that the true challenge in our society will be bridging the tech and non-tech world, especially with topics like blockchain.
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Chapter 2: How did the company evolve from nothing to $50k ARR?
More confusion is created than problem solved. Asides all that, he's a fast learner to adopt today's challenge running a company. He's including a semi-remote setup, agility and development, quick learn iteration loops to fail fast. He's now building retraced.co, a sustainability management platform. Peter, you ready to take us to the top?
Yes, of course. Lovely introduction, Nathan. Happy to be here. So yes, indeed.
I'm excited to have you on. So tell us, who's paying for Retraced? Who's using you and how are they using you?
Actually, every fashion company, you can imagine, might be a client of Retraced because we are building a sustainability management platform for the fashion industry, meaning brands, manufacturers, suppliers, suppliers, suppliers. down to the raw material producer, actually.
It depends how they use the platform if they actually have to pay for it, because obviously most of them are not willing to pay, especially if you're a small company, because typically what you do, you contribute information into the platform, because this is what we are all about for the last ones in the tier, like a retailer.
These are the ones who actually want to process and report information. Whereas, you know, in the lower tiers in the supply chain, this is less necessary. So you want to just have something to easily collect information and process them on for the next party in line.
Yep. Okay. So fashion brands are your customers today. What are they paying on average per month to use your technology?
It's not only fashion brands. It could also the same be suppliers and manufacturers. Every fashion company actually you can imagine. We are on average... So an average is approximately 800 euros.
Okay. So about a thousand dollars per month, whether it's a supplier or a brand, et cetera. Yes.
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Chapter 3: Who are the primary customers of the sustainability management platform?
Yeah, yeah. But 2018, you launched. You're scratching your own itch, right? You build this for your own footwear brand. Then you bring in Pierre as your first customer. How many customers are you now serving today?
I think we are above 50 brands already. I'm not counting. Five zero or one five? Yeah. Five zero.
Five zero. Okay. Very cool. And 50 brands paying at that average price, you told me earlier, a thousand bucks a month. That would mean you guys are doing about 50,000 bucks a month in revenue right now. Is that about right? Yeah. And if that's where you're at today, where are you exactly a year ago? Do you remember?
Basically nothing, I would say. We started very small, especially in COVID times. No one wanted to invest because back then we had COVID and fashion brands often said, hey, we stay clients because we still want to utilize the platform. It was a benefit for us. We still get known, but we stopped most of the subscription revenue, actually, and it was hard times.
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Again, both plural founderpath.com forward slash products forward slash valuations. Okay, so maybe go from 2000 $3,000 a month a year ago to now $50,000 a month. You've grown really nicely. Have you bootstrapped or raised capital?
We raised capital actually a year ago. That was in the end of that year. Actually, we were very happy. It was a venture capital.
So sorry, when was the first capital raised? What year?
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Chapter 4: What is the average monthly payment for using the technology?
It was last year, 2020. Interesting. Okay, cool. Did you just formally close that based off your government filings? They say it was closed literally last month.
Okay, interesting that you picked up on that. So the thing is, it was a performance condition because we set ourselves a strict target as founders. We said, you know, we want to set ourselves a performance condition that product market fit is there. Something very... We were proud of our product. But we were not sure if we are there and we didn't want to risk too much.
So we said in the end of last year, hey, we are going to close this. This is the amount we agree on. But we want to meet a performance condition that we have product market fit actually. And we wanted to prove it for ourselves. And this is why I came a little bit later.
When did the money actually get wired then?
It was split up in two tranches. You know, you have something sent over, so pretty much 50-50, okay? And then based on the performance condition, you got the rest of it. But the filing happened later because I'm not really sure. I think some people go on summer holidays. So effectively, we reached it earlier.
So we had a performance condition, I think, set to the end of April, and we met it already in the beginning of March.
Yeah. So what was the performance condition? Was it number of customers or revenue target or what? Yeah, it was MR, actually. What did you have to hit to get the second $600,000?
Well, let me think about it again. Was it something above $20,000 or so?
I see. Interesting. Okay, so you raised $1.2 million on this sort of performance-based seed round. And what was that, like a $6 or $7 million valuation, something like that? Yeah, around about that. Okay. And so how do the three of you guys think about dilution? How do you mean for ourselves? Yeah, I mean, obviously, you don't want to get diluted, right?
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Chapter 5: How does the platform cater to different tiers in the fashion supply chain?
We are now looking into alternative possibilities of cash. So for example, revenue-based financing, that's a good alternative.
How many folks are on your team today?
We are 24. 24.
How many of those guys are engineers and gals? I think 14. 14. Okay. So happy engineering. That's great. Now, when these fashion brands and suppliers sign up, they stick, what's your turn look like?
Um... I think it's basically nothing. I think we have lost two clients or so. So not 2% is like less than that, but a tiny bit. But one has also to mention most contracts are 12 months. So I could also be biasing here, but actually they stick around for a longer period of time.
Some even start to close for two years contracts time as we are building something in an era of compliance, they are sticking around to it in any case. And actually I can be very proud of, Our customer excellence, head of customer excellence, because everyone who went through a trial period, you know, pilot project, they were converted over into paying clients actually.
And that could last from three to six months. And sometimes they even went over, said six months pilot, but after four months they converted over because they were just convinced that it works.
Those are all healthy early indicators, Peter. That's exciting stuff. Let's wrap up here with the famous five. Number one, what's your favorite business book?
I think it's richly put it.
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