SaaS Interviews with CEOs, Startups, Founders
ProjectCor Hits $1m ARR, Raises at $40m Valuation for Profit Tracking Tool for Agency's
27 Jun 2021
Chapter 1: What is the goal for ProjectCor's annual recurring revenue?
Our goal is to be over $2 million in ARR. By December? Yeah.
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Hello, everyone. My guest today is Santi Biblioni. He is a Silicon Valley-based technology entrepreneur and co-founder and CEO at a company called Core, the next generation solution for creative and professional teams that intelligently suggest how to manage your projects, teams, and finances.
Prior, he founded Balloon Group, one of America's fastest-growing digital agencies, among other businesses. Today, he continues to grow Core and is also a sales and fundraising mentor at 500 startups, as well as a speaker and jury in big technology, advertising, and entrepreneurial events. Santi, you ready to take us to the top? Thank you for having me. You bet.
So if people want to follow along, the URL to your website is project and then cor.com. So that's where they can follow along. But tell us what the company does. So we're the project's profitability platform. What we understood is that in the billable hours market, like all companies that sell hours, Project management is not a problem.
The real problem that is behind project management is projects' profitability. Are you selling directly to agencies mostly? Yeah, so we sell to agencies, to consulting firms, to law firms, accounting firms. These companies that are selling ours, they need to understand their profitability in real time. And The reason why this was not happening before is because no one wants to log hours, right?
No one wants to log hours because it's tough to log hours manually. I mean, everyone's hated. And at the same time, everyone feels that logging hours is for their control. People are managers controlling their time. The reason why we are educating these people on time tracking is because we are automating this with AI.
And at the same time, we are letting them know that this is the way where managers can understand their costs to better negotiate fees with the clients. This way, you can hire more people, you can increase salaries, and you can have a healthier company.
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Chapter 2: How does ProjectCor define its core functionality?
Normally between 3.5 and 4x quota versus OTE. So we normally do OTE half and half for sales reps. Half and half means if you have an OTE of 150k, it's 75 salary, 75 commission. And then your quota is going to be like 3.5 or 4x that amount. to take the 150K, your full on-target earnings, times 3.5 to 4X. So something like $600,000 to $700,000 is your quota target for new AEs. Exactly.
That makes a lot of sense. I mean, that's market. So tell me more about the backstory here. When did you launch the company? launched the product like three years and a half ago uh here in sf in in san francisco and after going through 500 startups program here we i mean we the co-founders are argentinian so i moved to the valley like to to launch the company we we
We made a company before that we exited most of it like five years ago. And we felt the problem firsthand. So the three co-founders, we know each other from like for long. Jose, who is my co-founder and CFO, COO, he has been also a partner on the previous company I started. So yeah, we've been 10, although we are young, like 31 years old, we've been 10 years working together.
And Santi, did you guys just split equity down the middle, 30, 30, 30? We didn't. We didn't because we had different positions on taking risks at the very beginning. So we compensated equity with risk. Yeah. I see. Did any of the co-founders put in capital to get the business going? Yeah, two of us, Jose and I invested some of our capital just to develop the MVP. Yeah.
So let's build up to your current Series A, but let's go back and start the MVP. How much did you guys spend of your own money to build the MVP? It was not too much. I mean, like 10K to just get a minimum MVP, a minimum buy all product, get it up and running.
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Chapter 3: Who are the primary customers for ProjectCor's services?
It was awful, but we launched it and we had three to four customers with that. And that's how we got into 500. That's very cool. And now how many customers are you serving today? Today we have 115 clients. 115. Okay. So it starts with your own money. Then it sounds like you raise some capital. So let's go, let's work backwards. You just raised, I guess it's 30. How much did you raise?
We raised 6 million. Okay. 6 million. And most of that capital you think is going to go towards your sales efforts or is there a lot of engineering hires there too? So we're going to invest 70% growth, which is like all the gen marketing, pre-sales, sales, and post-sales.
And then we're going to allocate 30% of the capital to product, which is already very robust and working pretty well with a great customer satisfaction and more. And part, I mean, We're going to invest a little bit more in product, but in features that are product-led growth. So it's product features, but that will be for sales enablement.
A lot of you guys will ping me out of the blue asking for help selling your software companies, but I'm not a broker and I'm really focused on founder path right now, not helping folks sell their company. So I'm always looking for great tools to recommend for you guys to quickly figure out what you could potentially sell your company for and how much cash you could get.
That's where Flippa comes in. Now, here's my thing about brokerages, especially for selling your company. You guys should not have to pay a 10% brokerage fee when you put your blood, sweat, and tears into building your company for years out of a sale. All smart founders know though that the best way to maximize price is to have multiple options.
So how do you get multiple options, multiple bids on your company without paying a broker 10% or more? Well, I recommend Flippa because they have the largest list of buyers for these sorts of digital assets, which almost always guarantees a bidding war. I tell my founder friends all the time to try Flippa's valuation calculator to see what their company is worth.
And I encourage you guys to do it today. Go to NathanLacke.com forward slash Flippa right now to test out the valuation calculator for free. That's NathanLacke.com forward slash F-L-I-P-P-A.
I'm curious, I mean, playing out of COVID valuations, or I'm just curious generally about when you guys raised 6 million, you can give me a range if you want, but like what valuation do you guys raise at? So we're typically racing at 25X revenue. Okay. Got it. So what, like how much of the company were you selling for 6 million, like 15%, something like that? Yeah. I mean,
Today, we were lucky enough because we were growing at 9.8% month over month. That's like kind of doing 170, 180% year over year. That's like tripling revenue year over year. So we were lucky that we got a good valuation at this time. And yeah, we got diluted kind of like 10% on this bridge round because we raised 2 million and then we raised 4 at different valuations, different terms.
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Chapter 4: What differentiates ProjectCor from traditional project management tools?
leveraged that one million and as we had some due diligence we we knocked some off like some prospects doors and we allocate we we received three other million and
we we made the whole thing as like the kind of this although there are kind of like different rounds and because there are different terms we we called it seriously like all preferred stocks they're just this the same stocks for everyone yeah and so was the two million that you closed a year ago at about like half the valuation of what you just closed the four million at yeah okay got it so you can do this and have different valuations
Yeah. I mean, it's not typical, but, and we didn't know before this that it was not on our mind to do this, but it's the way it went. And we were very lucky. I mean, not very much dilution, great investors. I mean, we had top VCs and at the same time, great individuals.
We had the founder at, so Kevin O'Connor, the founder of DoubleClick, then Dax Smith, the founder of Anaplan, public company, founder of Aquafold, sold over 1 billion, founder of Trax, sold to Salesforce for over 1 billion, global CEO at Walmart. Marcus Galperin did a follow on who's the founder at Mercallori. I get it. Yeah.
I mean, it's strategic, but basically to sum it up, you brought in strategic partners, you sold 10% twice over the past year, 2 million on 20 and then another 4 million on 40, basically. More or less. Yeah. Yeah. And that's great. I think, I think there's nothing wrong with that. It's getting creative. That's smart.
And I mean, we can sort of, I mean, I can take a hundred customers times the $1,500 ARPU right on average, which is a $19,000 ACV. And that puts you somewhere around, what, $150,000 a month right now in revenue? Sorry, say that again? $150,000? Yeah, you said you have about 115 customers. Yeah. Times the average ACV you gave me, about $19,000.
It means you're doing something around $150,000 a month right now in revenue. Average, yeah. Yeah, yeah, okay. Can you break $200,000 a month this year, you think? Yeah, I mean, our goal this year is to continue growing into this over 9% by the month, and this will help us achieve. Our goal is to be over $2 million in AR. By December. Yeah, by December.
Yeah, and if you're at, like, call, again, $130,000, $140,000, $150,000 a month today, where were you exactly one year ago? Do you remember? Yeah, I mean, we're doing... 400K, if I'm not wrong. Oh, in ARR? Yeah, in ARR. Yeah, wow. Okay. Significant growth. Very significant growth. Yeah. Yeah. Cool. Okay. 400 to 500K. I'm not sure. Yeah. Yeah. No, that's fine. That's fair. That's fair.
Regardless, good growth.
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Chapter 5: What pricing model does ProjectCor use for its customers?
Net revenue retention is 114%. 114%. Got it. So you're expanding by about 18%. You're churning 4%. You're net 114%. Yeah. That's great. Is most the expansion coming from the teams adding more seats or do you have a feature-based or usage-based upsell as well? More seats. More seats. Yeah, makes a lot of sense. Very cool. Santi, let's wrap up here with the famous five.
Number one, favorite business book? Start with why? Number two, is there a CEO you're following or studying? If I'm a CEO, what? Is there a founder that you're following or studying? Yeah, I really admire Marcos Galperin, who's the founder and CEO of MercadoLibre. They say Amazon for Latin America. CEO of who? MercadoLibre. MercadoLibre, okay, I haven't heard of that.
MercadoLibre is an $80 billion company in NASDAQ. He's Argentinian, and he started the largest tech company in Latin America. How do you spell his last name? His last name is Galperin. Marcos Galperin, G-A-L-P-E-R-I-N. Got it. Okay. Marcos Galperin. Very good. Number three, what's your favorite online tool for building a business besides your own? Hotspot.
Number four, you're not in the acquisition talks with them, are you? Acquisition? We have two. Why did you decide not to sell? We're here for the long term. I mean, that's the answer. We didn't start this new company to sell it right ahead. All right. Well, we'll see what happens there. Number four, how many hours of sleep do you get every night? Normally, human things. Relationships.
Sorry, how much sleep do you get each night? Sorry. Eight hours. Okay. And what's your situation? Married, single kids? Married with one eight months baby. So when I said eight hours was like before the baby. Wow. Okay. And you're 31, right? Yeah, I'm 31. Last question. What's something you wish you when you were 20? Yeah. I have no regrets.
I mean, I am pretty happy of everything I did and the things I didn't make. Guys, Project Core, C-O-R.com, launched back in 2018. They had about a half-million-dollar run rate last year. Now up to north of that, they've broken a million-dollar run rate, hoping to break a $2 million run rate by the end of this year. They just raised $4 million at a $40 million valuation.
Healthy Revenue Multiple, call it 2526X there. Team size 66 right now, 30 engineers, 12 in sales and marketing, using the new round of funding to bring in additional talent to keep pushing growth forward. A verticalized solution for marketing agencies to manage their project-based billing, hours, All that's done. Santi, thanks for taking us to the top. Thank you, Nathan.
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