SaaS Interviews with CEOs, Startups, Founders
Raising $10m on $50m Valuation, 1500 Farmers Pay $2m/yr For This SaaS
15 Feb 2021
Chapter 1: What is the main topic discussed in this episode?
We doubled it. That's really cool because we had to cut our budget because of COVID. And so we spent less money in 2020 than 2019, but we added more revenue than ever before.
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My guest today is Robin Salux. He's the son of an organic grain farmer, built his first company in high school, and is still operating that business. Well, is still operating with 50 employees. He studied computer science and is now building something that accelerates the transition to sustainable farming. It's a software play. The website is called eagronom.com.
Robin, you ready to take us to the top? Yep, absolutely. Okay, so I obviously love a situation where the there's a computer science major who's familiar with farming that builds code that you're using yourself. So what got you into like grain and farming? Is it a family thing?
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Chapter 2: What inspired the founder to connect farming and technology?
But it's hard to put this into the money. Now with carbon credits, we can go to farmers and say that, hey, you use our program. And we will get the transparency and good overview of what's going on in the farm. You will follow our guidelines. So you will capture more carbon. And we will turn this transparency and increased captured carbon from there into carbon credits.
And we can sell this to companies who want to offset. I see. And this will result in farmer earning, let's say, like 30,000 euros a year or 30,000 a year. And we will take just 10% out of it. So the value proposition gets much more clear.
And how do you package and sell the carbon credits?
How are you packaging?
The carbon credits, yeah. How do you sell them?
Well, there are big corporations who want to offset their footprint and they came to us and saying, the thing is that agriculture is one of the best places to reduce emissions and increase capturing. And that's why they came to us and asked like, hey, is it possible that you will help us to offset our carbon footprint?
And we went to our farmers and work together with them to reduce their emissions and increase carbon capture from there. And, uh, and turn those things into credits.
Well, what does that, what does that mean though? Like, I guess I don't understand. You have 1500 farmers using your product. You have ultimate transparency because you're measuring, you're capturing all of the carbon credits that those small farmers could be getting, but they're saying we don't want it.
And they give it to you and you package it and sell it to a bigger company that wants to offset their agricultural costs.
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Chapter 3: How does eAgronom help farmers earn carbon credits?
That's amazing, man.
Yeah. And the best thing is with the smaller cost base.
Now, have you done all this bootstrapped or did you guys raise capital?
Now we raise capital as well. So even our own paid customers invested $1 million. So they invested through the holding company. 50 farmers said that they want to be part of the vision and they invested. But we also have VCs. They have given majority of the money. We have raised $5 million in total. And we have angels as well on board, builders of different unicorn startups.
And you're raising $10 million seriously this spring.
Okay, and so why is 10 million the right number right now? Why do you need 10 million? What will you use it on?
Yeah, we will use it on, well, to accelerate the carbon business to enter high volume markets, meaning markets where it's possible to produce a lot of carbon credits, big potential to change farmer practices, so they would capture more CO2 from there.
And secondly, we will use it to increase our remote monitoring capabilities so we can deal with this higher volume to make sure that we can still continue producing good transparency credits.
What valuation will you target raising the $10 million on? How much of the company will you sell?
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Chapter 4: What is the pricing model for farmers using the SaaS platform?
So just to be clear, you have two revenue streams. SAS is about $2 million a year. This year, you will capture one ton of carbon from the measurements you're doing with your SAS platform from 1,500 farmers. That one million tons of carbon is worth about $30 million in carbon credits.
You think you can take something between 5% and 15% of that $30 million value as a new revenue stream that you're launching this year?
Yeah, exactly.
Very cool. What about churn? Do these farmers stick? What's your churn rate?
Well, the annual churn is below 10%.
That's impressive. What's expansion revenue look like on a percentage basis? Excuse me? Do you have any ways to drive expansion revenue to farmers where they pay you more year over year?
Yeah, they're paying us. We basically increased our prices, I think 50%.
like five zero percent uh during the last 12 months what does that mean in terms of what your net dollar retention is over the past 12 months uh i we have i i don't know this by heart but uh but it's it's it's higher than one so it's higher than a hundred percent yeah yeah you know a lot about business i think you know relative to like what you're doing you built this company in high school with 50 people do you still have equity in that business
The first business, yeah, I still go to shareholder meeting once a month. How much equity do you own? I think, well, from the first business I built, maybe 20-25% or something like this. What was that business? Well, it's doing, well, basically half of the stone and six-year-old children go to our science class every day, every week. So it's virtual learning? Right now it's virtual.
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Chapter 5: How did eAgronom acquire its first customers?
Well, basically we have five people in management and the rest of the people are either sales, account management, customer support.
Interesting. Do you have any quota-carrying sales reps? Quota-carrying? With the sales target, where they have a quota.
Oh, yeah, yeah. Well, approximately 40 to 60 farmers a year.
But how many employees do you have that have a quota target?
Well, I would say six or seven. Six or seven. Yeah, yeah. But basically for us, sales is very seasonal. So... We acquire more farmers during the winter period when farmers have more free time and less during the summertime.
And what's your customer acquisition cost? What's it cost you to get a new $1,200 a year farmer?
It's below, annual customer value is higher than the customer acquisition. By how much? Not much, maybe 10%. But it's okay, because farmers pay us upfront a year.
Yeah, so you'll spend $1,000, but then they'll pay you $1,200 immediately, so it's an instant payback. Yeah. Very cool. When you raised the $5 million, you took $1 million from your customers and $4 million from VCs. That was last year. What valuation did you raise at?
Well, the last round was, I think, $60 million. Okay. One six. Yeah. Pre-money.
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Chapter 6: What growth milestones has eAgronom achieved recently?
Yeah, I think my father is one of the coolest CEOs I know.
What's his name?
Robert. Robert Salvox.
I love that. Okay, number three. What's your favorite online tool for building the business?
Pipetribe.
Number four. How many hours of sleep do you get every night? Eight. And what's your situation? Married, single, kids?
I'm in a relationship with a crazy girl who runs...
Any kids? No kids. And how old are you? I'm 25. 25. Last question, Robin. What's something you wish you knew when you were 20?
Well... Don't stress for, well, there's no need to stress about anything. It will go over well.
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