SaaS Interviews with CEOs, Startups, Founders
He Raised $3m at a $25m valuation, is that overpriced or just right?
03 Sep 2024
Chapter 1: What is CV Partner and who are its clients?
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 Erling Lind.
After completing an MA in computer science from the Norwegian University of Science and Technology, he held software development and consultancy roles at Hydro IS Partner, Miles AS ThoughtWorks, and Ford Internet Group. With his comprehensive IT background in 2011, he presented with Nikolai Nielsen to found CV Partner. That's cvpartner.com if you want to follow along.
All right, Erling, you ready to take us to the top? Yes. All right. What is, what is CV partner? Who are you guys selling to? What's the product do?
Chapter 2: How does CV Partner help professional service firms?
Yes. So, uh, CV, uh, a CV is, uh, that's Latin for resume. So as you call it in the, in the, in the, in the state. So, um, our clients, they are professional service firms. Uh, so that means, uh, it consultancies like, uh, Capgemini or CGI. It could be management consultancies like BDO or PwC. It could be engineering firms like WSP and even law firms like DLA Piper.
All those logos are clients in some geographies. And they all typically often share a challenge when it comes to winning work. So they essentially get a lot of their work from winning oblique tenders, so they bid for work.
In order to win that work, they need to present their people, so their consultants or engineers or lawyers, and they need to present them in the best possible way to highlight the relevant experience and also include a lot of experience to make sure that they tick off all the requirements in the bid. And further, they often also have to format it.
Chapter 3: What challenges do clients face when bidding for work?
So in the EU, there's standard formats that keep changing all the time. The same in the Nordic trade from, the government issues different resume templates that you have to adhere to. And the same in the US, like US government forms. And typically, we would have these resumes without our solution. The resumes would be in a file share, in Word documents, could be on someone's laptop.
So you just give them a tool, a B2B niche sales solution to gather all this information so they can search, find the relevant consultants with the right amount of experience and certification, et cetera, put them together, highlight the relevant experience and export it into these templates. So they save a lot of time in this process, reduce the burnout of their bid and proposal teams,
and they increase the chances of winning more work.
Yeah, let me just jump in real quick. So to try and simplify this real quick, DLA Piper has 50 lawyers. They have a startup that needs help with a lawsuit related to FinTech. DLA Piper would use your software to find which of their attorneys is best suited for that FinTech legal case that the software company needs, and then they will send that proposal to the software company using your tool.
Is that right? Yes, that would be a good example.
But I would say possibly a more typical example would be, let's say, WSP is bidding to build or support a huge project and they need to prove that they have 100 engineers that have participated in designing a large bridge or something with specific requirements in the past and they need to put all this together and send it off to them. Then they would
able to search fine but also actually make sure that uh the percentage of these law firms then those are the ones paying you as customers like the dla pipers the world etc yes yes i see how do you price this then sort of on average what's the average customer paying you per month or per year to use the technology
Yeah, we are kind of targeting two segments now. So we go for mid-size, which should be like 15 to 50K USD ARR. And then we have the kind of enterprise motion, which is like 50 to 500K USD ARR. And yeah, we have lines in both of those boxes.
How many folks would you categorize in your enterprise segment today?
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Chapter 4: How does CV Partner's pricing model work?
Tell me that story. When did you close your first customer?
So... When we started out, we had this idea that we could help consultancies solve this problem. I called everyone I knew in the consultancy business, and they all said they had the same problem. And then I asked them, like, if I solve it, will you pay for it? And all of them said yes. But then I started building. Marling, when was that? What year? 2012 was probably when we started building.
And I think we started building. We had some pilot customers that gave us great feedback. One of the feedback was like, this is awesome functionality. It saves us a lot of time, but it looks completely shit. So that's when I got my co-founder, Nikolaj, to join me. And we sorted out the user experience. And after a number of demos, we finally had one client that said, we're ready.
Then there's the contract. And we looked at each other. It's like, do we have a contract? What year was that? That first customer? I think it was 2013. Okay.
So 2013, you signed your first customer. What did they pay? Probably 10K or something. Okay. So they paid 10K for a year for, you said, six zero seats?
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Chapter 5: What was the journey of CV Partner from inception to funding?
Yeah. I'll try to remember. It could be 5K, 10K, somewhere in that range.
Yeah.
Got it. And then, so that was your first customer, right? Scale up, you know, take us up to today, right? How many customers are you serving today and how are you growing?
Yeah. So today we have more than 400 customers and we grew around 47% last year.
So just to be, and just to be clear, you said average price point earlier, you had midsize enterprise, but then you gave me two very different ranges, but was the average customer paying something like 15K per year?
Yes. Yeah, I would say so. That's the ACV at the moment, but it's shifting upwards as we're going more up markets.
Okay. So can I take 400 paying customers times 15,000 ACV average, that would put you at about 6 million run rate today?
Yeah, that's correct. Between 5 and 6, that's the current error.
That's great. And so if you grew 47% year over year, that means you were doing what about, you ended about a year ago at 4 million run rate? Yes, yes. That's great growth. Where's most that growth coming from? Expanding seats in current customers or adding new customers altogether?
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Chapter 6: Why did CV Partner decide to raise equity funding now?
What is it?
We got some we do get some from from SEO inbound. That's more in the markets for more established. And as we're breaking into new markets, it's more outreach going to a lot of events, conferences and things like that.
Okay, so I guess you added a million and a half of revenue over the past 12 months, where would you say the majority of those customers came from? Was it a big conference you went to or something else?
It's a mix. It's a mix of... I'm asking you to pick your most successful growth channel.
So the answer cannot be it was a mix. What was your most successful channel?
I would say it's still probably growing word of mouth from... customers that, uh, come in bounds. Uh, but, um, Okay.
How, but how do they find w w word of mouth? Doesn't just happen in Norda's inbound. So when you say inbound, how do they find you? What are you doing? Your organic rank on Ahrefs from a domain rating perspective is 26. So you don't get a lot of traffic from just random inbound SEO. How are you getting an end down?
No, it's, it's, it's typically, uh, people that have used us in other companies and changed jobs and they come to us. Uh, that's a, I see obviously a very successful, but, uh, Uh, in order to reach into the new markets, we are. So you need people to get fired? Not necessarily fired, but getting new jobs perhaps. Yes.
Who would you say, what are the other two or three firms you're competing with in this space? What are their names?
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Chapter 7: What are the growth strategies for CV Partner moving forward?
We are competing against people only using this in SharePoint. And then it's typically maybe companies that are coming from a more like digital asset management, like document management, more like more generic tools. And then there's some sort of CRMs that have added the functionality that we provide as an add-on, but maybe not at the depth that we go into.
I mean, would you put people like Congo Composer or Proposify, Lupio in your competitive suite or no?
No, those are more for us. Those are more partner potential. A proposal can consist of multiple parts and multiple documents. And typically, there would be some intro about your company, some financials, how you would solve it. But then there's this
resumes and the case studies and that's the two part that we sold really well we go super deep there uh so i would say these other tools uh they could partner with us when they need a more specific specialized solution in that area so yeah we don't see those as um as competitors more like partners okay so four million is what you ended uh with call it june uh last year so year of your growth brings you to 5.5 million today what year did you pass a million revenue do you remember
Oh, it must have been 2017, perhaps.
Okay. So how did you guys sustain the business from 2012 to 2017 with under a million of revenue? You just keep the team really small?
Yes. So we basically bootstrapped for 10 years until we raised our first round last year in September.
And what was the size of that round?
Around 3 million.
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Chapter 8: Who led CV Partner's recent funding round and what does the team look like?
And we want to use this to go faster now. It's so it's more Maybe it was not ideal timing in terms of the market, but it was the right timing for us as a company.
Most folks in their seat are selling something like 20% of their company. Were you around there?
Less than that.
Okay, got it. So, I mean, is it fair to say between 15 and 20 or were you under 15? I would say under. Okay, great.
Around that.
Well, if you raised $3 million and you sold between 10% and 15% to your company, that would put you somewhere between a $30 and a $45 million valuation, right?
Yeah, it's on the lower end of that, but yeah.
Yeah, the reason I bring up the timing is because by all, I mean, for a seed round, you have 4 million of ARR, right? 30 million valuation represents a 7.5x multiple.
I was slightly lower than that.
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