SaaS Interviews with CEOs, Startups, Founders
Holded Grows 100% YoY to $4m ARR, Last Round Valuation $22 Million
24 Oct 2020
Chapter 1: What is Holded and how did it start?
So we are at almost, I think, $4 million. So doing the compression.
Is that Euro or USD?
So 3.4 million euros.
3.4 annually?
Yeah, annually. ARR.
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And you'll get interviews three weeks earlier from founders, thinkers, and people I find interesting. Like Eric Wan, 18 months before he took Zoom public.
We got to grow faster. Minimum is 100% over the past several years.
Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker CEO Frank Bean before Google acquired his company for $2.6 billion.
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Chapter 2: How does Holded serve small businesses?
So under the umbrella of the product virality.
So your 9,000 subscribers, for example, they all have their CRMs connected. What you're saying is you add up all their CRMs, you have potential to reach 1.4 million SMBs. Exactly. I see. I see. Interesting. Okay. And so 9,000 customers paying on average $47 per month. What's monthly recurring revenue today?
So we are at almost, I think $4 million. So doing the compression, but where is that Euro or US or USD? So three, 3.4 million euros, 3.4 annually. Yeah, annually, ARR.
Okay, got it. So yeah, about $4 million run rate or about $340,000 a month in MRR. Walk me through the decision to launch this new financial technology product, you know, percent of GMV.
Yeah, sure. So... As I said, there's a big trend on going in this direction. So in the end, with this small business segment, there's a limit on how much money you can charge them. They have limited resources. And we don't want to change the game. We don't want to go up in the market. So at some point, you need to find new revenue channels to monetize better your customer base.
But in the end, it's also because we believe this is also giving a lot of value to our customers. So in the first stage of this deployment, we're not thinking that much about making money out of that, but to give more value and to concentrate more actions into the platform. the invoices are already issued in our platform. The invoices are already received into our platform.
And what we want is to be also part of the process of the payment, both from the collection and the payment side. So you don't need to leave the platform to do that. And I'll put you an example. So when a traditional SMB, they tend to have at least two or more banks. So once you want to pay your employees or you want to pay a bill,
you necessarily need to leave the platform, go to one of those banks and initiate the payment by copying all the bank information from the platform. So we want to avoid this tough process and be able to do that directly from the platform, directly from the invoice. And actually, you can automate and start programming when you want to pay your bills.
So giving features that normal banks are not offering today and that we're going to be much faster in offering those.
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Chapter 3: What is the pricing model for Holded's services?
Because you're frisked a little bit.
You're processing 4 billion in GMV. If Stripe takes 2%, that's 80 million. And if you make 30% of that, that's 24 million in revenue. Is that what your projections look like for this new stream or no?
Yes and no. So we are not that ambitious and we don't think we're going to be able to capture the 100% GMB through the payment gateway. So for example, when we've done our financial model thinking about the FinTech, we've only used the invoices between zero and 500 or 1,000 euros because we don't believe someone's going to pay an invoice of 10,000 euros with a credit card.
So actually, and we are going to... work a lot on making sure the adoption of this feature is the right one. This is not something that's going to happen day one, no? So actually our model is that we do have four years to make sure that we're able to capture up to 6% of the GMB, but only on the GMB below 1,000 euros invoices, no?
So which, for example, last year out of those 4 billion, we had almost 800 million of invoices between zero and 1,000 euros, no? Um, so we know when we release this feature, we need to work to make sure people adopt it and people understands it. And, you know, so it's not going to be something from day one, but definitely it just makes a lot of sense.
And we've seen other success cases like wave app that they just live out of the, out of this, uh, financial service.
Yep. Very good hobby. This is good stuff, man. Let's wrap up here with our famous five, number one, favorite business book.
Uh,
favorite business what book uh the hard things of the hard things number two is there a ceo you're following or studying right now uh the ceo of shopify number three what's your favorite online tool for building your company for building my company besides hold it
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Chapter 4: How has Holded achieved its growth in customer base?
They're burning about $250,000 per month, but still have more than $3 million cash in the bank. Their last round of $5.5 million in 2019 was at a $22 million post money. They've raised $7 million total, 71 people on the team, 30 engineers. Churn is incredible in a good way. They have 125% net revenue retention, even in the SMB cohort space. Javi, thanks for taking us to the top.
Thank you, Nathan.