SaaS Interviews with CEOs, Startups, Founders
His cap table will shock you. $100m revenue, $750m valuation in his series D with Coro Co-Founder Dror Liwer
31 Oct 2024
Chapter 1: What is the main topic discussed in this episode?
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Next speaker just closed a $100 million Series D. We usually don't celebrate funding, but I'll celebrate the funding here because he's also very transparent. He's a natural teacher. We're going to dive into the story, the security SaaS space today, and how he's broke $50 million of ARR. Please tell me. Welcome to the stage, Jor Luer of Quoro.net. Jor. Jor. for being back. Come on up here.
Did I get the numbers right? It was $100 million Series D?
The Series D was $100 million. Total raised so far was just north of $280 million.
And the valuation on the Series D was about how much?
The press has stated, we don't state it publicly, but the press said it was 750, and they were pretty close.
Okay, press is generally close. So 750, okay, great. Let's go back to the origin story. So you got going, I mean, when do you guys, when was the first line of code written for coro.net, would you say? The first line of code, like the MVP.
2014.
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Chapter 2: What is the story behind Coro's $100 million Series D funding?
I think orange is my favorite color from a branding perspective. I got overruled by my partners. But basically, we started off like every other cybersecurity company trying to sell a niche product into the enterprise market.
very quickly understood that that market was not very receptive to new ideas, started really morphing the product, got the product to be a lot more complete, continued to sell to the enterprise. And then I remember the board meeting where I presented on a big graph saying, Here's where we are selling. Here's who's buying. Maybe we should sell there.
And what was there?
This was mid-market and small businesses. Mid-market and small businesses, okay. That really loved the simplicity that we created, that really loved the whole concept of an all-in-one. So we slowly grew the product from a very niche product to a platform that covers basically everything that a mid-market or a small business needs.
You try and ignore everything you've learned over the past years, because I want people to get in your head in this moment of time. When you push on this website, the thesis was that you were selling what? Was it to police groups?
It was trying to, so the attack vector was called calm jacking, which is a name I actually coined. And the whole concept was preventing a man in the middle attack in the wireless realm. So either Wi-Fi or cellular. It's very, very easy for an attacker to step in the middle and basically intercept all the traffic and then either manipulate the traffic, steal the traffic or whatever.
And yeah, so when we went to sell this, people said, oh, that's a great technology. We had patents, we won awards and everything. But people said it's too much of such a specific threat vector that it wasn't really... They weren't willing to spend money to prevent it. It's not about just spending the money. They weren't willing to add one more thing to the stack. I see.
That's a very, when you look at it from the eyes of a chief information security officer or an IT person, adding something new to a stack has additional costs. which is why cybersecurity is so broken, because you need to have layers and layers and different tools. An average company on the enterprise side will have 40 different cybersecurity products that they've bought.
Each one of them has a massive side cost, not just the cost of the software, but the team, the training, the maintenance, and so on and so on.
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Chapter 3: What factors contributed to Coro's valuation of $750 million?
Fair enough. He owns it, 25 each. Was it as simple as that? You're like, okay, pizza, beer, 25, feels right, let's go?
It was, we all brought so much to the table, so it was clear that each one of us has equal value, and therefore we should have equal share.
And you're running for president soon. I am running for the president of Bolivia. Very political answer, but no, it is what it is. But okay, so anyways, you start with 25, 25, 25, and then your first seed round, Series A, 5.5 million in 2016. I mean, most people were selling 20% in their seed round. Was it around that? Just around that, yeah. Okay, so that was called a 20 million valuation.
You were still, though, pre-1 million, 2 million of AR in 2016, right?
In 2016, we were zero.
Zero, okay. Yeah, yeah. So you don't really do that big round until 2018, 20 million. And if we go back to the revenue graph, we still see basically no zero or zero in that range. What was being valued at the time? Was it the patents?
It was both the patents and the potential. Because I think we really showed that the potential was phenomenal. SMBs are the least protected animal in the business world. And if you wanted to know how big that opportunity is, we can ask this audience. I think all of you are what we would consider SMBs under 2,000 employees. How many of you actually have end-to-end cybersecurity that you can trust?
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Chapter 4: What challenges did Coro face in its early revenue stages?
covering your devices, the network, the cloud, the email, and the data. Yeah, no.
Some people.
Three people. By the way, for the rest of you, 40% off on Coro if you go to coro.net slash sasopen.
I rarely meet an engineer that can sneak in a sales pitch at the same time. That was very good. Do it one more time because it was so good.
Koro.net slash SaaS open, 40% off on our entire platform.
I love that. That's great. All right.
But here's an interesting thing. Everybody in this room will spend easily $50 a user on CRM, but they won't spend $15 a month on cybersecurity.
Until they get hacked.
Until it's too late.
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Chapter 5: How did Coro evolve from a niche product to a comprehensive cybersecurity platform?
2015, 2016, you learn, you learn. OK, now this is the new messaging, 2017.
Yes. So basically in 2017, we created this all-in-one that covered, basically extended what we've originally done. So we were very much in the network space. Then we extended it to SaaS on the one end and to the device on the other end. And we launched it in 2017. We called it Secure Cloud. And that's really the time where we noticed that
The simplicity, the concept of all-in-one was really attractive to the ICP that we weren't even considering. The mid-market, the small business, you know, 20 to 2,000 employee range, which, you know, all four founders come from the enterprise world. And to us, this was a sort of like an epiphany that there was a market and they were buying and they were interested.
So you keep learning from 2017, 2018, 2019. Now this is what your website looks like in 2019. Feels more enterprisey, right? Less words, less colors, more direct, right? Using Office 365 G Suite Dropbox, plug us in. Let's go forward. You keep learning, you keep learning. Here's what you look like now in 2021. You've expanded the industries you're serving, healthcare, manufacturing.
Which of these six sort of industries was making up the most of your revenue in 2021? Do you remember?
Actually, I would say pretty equally distributed. One of the things we're super proud of is the fact that we are very evenly spread across verticals. So we're not exposed in any way to a specific vertical tanking or something like that. And we've all had our battle scars where you sell into financial services and then 2018 happens and everything gets shut down. So we're very proud.
Right now, we see two specific spikes.
This is where you're at today, right? So you're trying to brand this idea of sort of modular cybersecurity as a brand.
Correct. So right now we're seeing two spikes in education and in automotive. And that's because these two industries have suffered a significant amount of attacks in the last couple of years. So they were waking up to the reality and understanding that they need to make that investment. And we made that investment extremely easy for them to make.
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Chapter 6: How does Coro differentiate itself in the cybersecurity market?
So if you go back through the revenue growth, you'll see that suddenly we started growing at 3x. So you mentioned before 3x, 3x, 3x, 2x, 2x. So we did five years of 3x. And then this year is going to be our first 2x year because the base number has become.
You gave me this projection of $100 million this year. Where are you today?
We are on track for it.
You're on track. OK, wow. So yeah, going from $50 to $100 million in today's SaaS market, that's pretty incredible. So you use that to drive growth. You keep doing fundraising, right? Because you obviously did the Series D, $75 million, and the Series E. It was a Series E for $100 million, right? Or was it the D?
No, the Series D was $100 million. There is an error here. The Series C was actually $155. Oh, so put them together. Yeah, it's sort of like a two-
So the 80 million at 500 and the 75 at 600 were actually the same round, just two different closed tables.
It's like C1, C2.
I see, I see. Okay, what I want to get into, though, and I didn't ask you for this, and it's going to make you uncomfortable, so I apologize, but just roll with it. I've modeled your cap table.
My sister did not ship my Kevlar vests.
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