SaaS Interviews with CEOs, Startups, Founders
Rosterfy Hits $3.2m ARR, Raising $4m on $30m Pre with 100 Customers
06 Oct 2021
Chapter 1: What is the main topic discussed in this episode?
Churn's really good. We have on average at the moment, because we're doing this, we're raising investment at the moment that as of next week, we're starting. And so we'll be at about 97% retention month on month.
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Hey folks, my guest today is Shannon Gove. He is the co-founder of Rosterfy. They exist to connect communities to events and causes they're passionate about solving complex contingent workforce management problems for the largest organizations in the world, from the Super Bowl to the City of London to the British Heart Foundation and many more. Shannon, you ready to take us to the top?
Let's do it. All right. Last we chatted was August last year. I think you shared you were going to do about 2.1 million bucks in ARR. I imagine COVID impacted you somehow. What happened? Yeah. Good question. So, yeah, we ended up around the 2.1. You're right. We're probably closer to 1-ish ARR. And so... We ended up for this year, for 2021, we'll probably end up around the 3.2 with 2 mil ARR.
So we've managed to weather the storm as best we can and grow quite significantly. So it has been a challenge, but we've managed to get through well. You're a SaaS plus model, 2 million of your 3.2 this year will be SaaS. What's the other 1.2? Yeah, we work on some significant enterprise contracts that require a lot of support from our team and also some technical support as well.
So dedicated project leads on projects like the Commonwealth Games or some work with FIFA and UEFA as well. Yeah, so describe, for people that missed our first episode together, describe to people like what you do. Sure. Large organizations require mass workforce management. They come from spreadsheets or outdated systems.
Our platform provides the end-to-end solution from recruitment, screening, engaging, rewarding. scheduling, time and attendance, award rates. So we provide that end-to-end journey in one central system where previously they might have had four or five systems. So that's what our platform does.
And given the significance of some of these programs, like the FIFA World Cup or the Commonwealth Games or the City of London Volunteer Program, a lot of these programs may require one or even two full-time staff supporting them to execute that journey. Launched in 2015. I think you told me last year you passed 100 customers. How many today? Probably closer to 130 or so.
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Chapter 2: How did COVID impact Rosterfy's revenue and growth?
So I think we'll be in a better place for this raise. How much are you looking to raise now? We're looking to raise 5 mil Aussie potentially by the end of this year, but we'll see how we go. And why 5.9? I guess we can talk about it, but we've come from the volunteer and mass workforce space and we're really finding an opportunity for us in the larger contingent workforce space.
So probably a higher level of workforce into an organisation. effectively anyone that's not full-time in an organization. So because of that, it's a much larger market size we'll be moving into. So we want to increase our sales and marketing capacity and probably just general resource around the team to support that. And what valuation do you think yours are?
It's a million-dollar question, but we're seeing some pretty crazy valuations at the moment. We'll really let the market decide, but anything off a 10 to 15 times multiple for recurring revenue would be a good mark. And then we do have around a million of support, sort of non-recurring typically, but whether you want to classify support for these contracts as recurring, we'll find out.
So 10 to 15 times SaaS recurring would be about the valuation. So you think you'll see it'll be above a $30 million valuation? Yeah, I think that's the number that a few people have mentioned to us, but we'll go through the journey and find out. Talk to me about the art. I mean, this is game theory. How do you get soft conversations to give me your term sheet or shut up? It's a great question.
And we learned a lot through our last investment raise where we had a lot of fantastic conversations. People really loved the concept. And for us, what we are passionate about is connecting communities all around the world. We've got a great story to tell. And so people are really attracted to that story. And then the contracts come out and they display a different thing of the conversation.
So we learned a lot through that process. And I think for us, it's just about cutting to the chase and And importantly, we want to work with the right people that will support us and help us grow.
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Chapter 3: What is Rosterfy's SaaS and consulting revenue breakdown?
We're not naive to think we know it all. So it's not just money we're chasing here. I think we'll get that money from somewhere. We just want to make sure it's from the right people. And Shannon, what's the cap table like today? How much equity do you still own? Yeah, so what did we give up last time? I think it was 22%. Yeah, correct. Correct. So that's still what we have there.
And so three co-founders are majority shareholders of the business. And I'm one of those. And then we have the investors in that small pool. Scott, so you plus the other two co-founders on 78% and investors on 22%. Yeah. And we have an ESOP pool for our staff. So that is 10%, but that just hasn't all been utilized yet in a small portion. A lot of people struggle with when to set that up, right?
When do you start incentivizing employees with an ESOP pool? Did you set that up by your pre-seed round, the $1.6 million? Yeah, we did around then and a touch after. But yeah, it's an interesting thing to have. Our staff is so important to us and we want them to be as part of the journey as what we are. And so we decided to set it up then.
And I guess the advice or the thought was it's probably easier to do it then compared to later down the line where people may have to sell shares to create it and it just might get a little messy. And I think Future investors want to see that to be able to bring good people in. So you're just prepping yourself for the future. We weren't in this for two years. We're in this for the long run.
So we thought we may as well set it up early. Yeah. And what's the team size today? How many people? We're around 23 now. So we've significantly bolstered our team in the last six to nine months. Certainly probably not what we were expecting at the start of this year with COVID and how it's lingered on in particular this year, and especially where we are in Asia Pacific. But yeah, 2023 now.
Very cool. And how many engineers? We have six slash seven engineers in our team. Seven. Interesting. So where are the other like, you know, 15? Are they sales reps or what? Yeah, we have six in the sales team at the moment. And then, like I mentioned, on those significant projects, we have dedicated project staff. So that's probably around four.
And then we have a global account management team as well that supports clients through Zendesk. That might be another four. And then finance and leadership teams. Interesting. And how are you landing more customers? Like where are you spending money today on CAC?
Yeah, I think our summary in this investment round is we've got to where we are today from hustle and grind and good relationships and networks. So we really have in the last six months bolstered our marketing efforts to increase our visibility out there. But I guess for our larger clients, it's often a direct sales lead and effort into that and building relationships.
But then for the mid-market opportunities, it's through marketing. So we'll probably spend... top line quarter of a million in marketing this year, but that could be a lot more to increase visibility coming into next year. So we're doing the groundwork is what I'd say this year, but we're going to grow off that next year. Sorry, mate, say that again. Where's the quarter million going this year?
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