Nate Wyne, Co-Founder & CEO of  Floodlight talks about how they’ve grown past $1 MN$ ARR by helping companies measure their greenhouse emissions.

• How their product SAGE delivers asset-level measurements of greenhouse gases using satellites & ground sensors
• How they broke through to 20 customers doing past $1 MN$ in ARR in just 12 months
• How they used warm intros from their institutional investors as a primary channel to acquire most of the customers so far
• How they sell primarily to two personas - PE (private equity) firms to vet their deals & other companies who want to track their assets
• How their sales cycle looks like
• How an SEC ruling recently forced every C-level executive to start measuring & reporting their ESG reporting
• How they manage to keep an ongoing subscription with PE firms
• Team, funding status & future vision for the company

You can also view the video on youtube here.

So BlackRock, three years ago, um, Larry Fink sent a letter to every

one of their stakeholders, and this is 7 trillion behind it saying, Hey, every

C-suite person hearing this, you need to start tracking the c s G number in

reporting it or we're going to fire you.

Okay.

That was.

What really got people moving this year is when the s e c proposed a new rule

in March saying you have to, if, if we adopt this rule next year, you have to

be able to stand behind the numbers.

You tell us for scope one and two with the same legal ramification if you're

lying as you would be on your financials.

So if you, if you go to market and your C F O has signed saying you have

a hundred thousand tons of carbon and it's proven that you have 200.

You're looking at the nine figure, fine if, if looking to Europe

is any forecast for the future.

So that's where we see people kind of terrified now.

hello everyone.

Welcome to the SaaS podcast.

I'm your host of FINRA of mine.

Today we have Nate Wine with us.

Nate here is the co-founder and c e o of a company called Flood Light.

Hey Nate, welcome to the show.

Hi.

Thanks Benra.

Great to see you.

All right, Nate, so let's, let's talk about flood light first, right?

What does the company do and by do customers for you?

Yeah, so FLOODLIGHT is a company that's focused on essentially

making e S G data more scientific.

So as more, um, environmental data is required by regulatory bodies, a lot

of companies have never had to gather this information before, and it can

be very expensive and time consuming because they do it all internally.

We do it all with satellites and ground sensors, and then

we charge a subscription basis.

Alright,

so is it a pure data play, right?

So is it, is it that you, you, do you, do you have a database that

you're constantly updating and are you just selling the data?

Is that how it works?

Yeah, so we, we sit in the, the acronym our industry

uses M r V, so measurements, um, reporting and verification.

So we sit in those three together.

Yes, we are continuing to expand the database.

We have, in addition to one and two greenhouse gas, we've got 122 data

themes in E S G that we cover and sell.

All right, so let's, let's talk a bit about these customers, right?

What sort of customers do you have?

And so, so what I want you to do is just pick one of your, you

know, representative customer and talk about how they use your data.

And if you, if you do anything oth apart from data, just

talk, talk about that as well.

And if, do you have any, if you have any product around which you've

sort of building that data, right?

So just talk about that as well in, in, in terms of how your,

how, how your customer is using.

Perfect.

Yeah, so the, um, one of the customers I would, I would probably

highlight first is a private equity.

So private equity shops currently are usually spending most of their effort

after they find a target company to buy and making sure the financials work.

So they want to check 2, 3, 4, 5 years out to make sure this cash flows.

The current problem a lot of them have is it takes usually three to six months

just to calculate the carbon that a, a company will have to disclose.

That because they have to, usually they have to fly people

out to take measurements.

They have to count how many machines there are, they have to figure

out the supply chain, et cetera.

We can do all of that in four business days.

And I think the private equity shops that we're using, um, and that we're seeing

the most interest from, are the ones that want to use us as their edge because

they can whip through their compliance and due diligence, you know, five, 10

times faster than their competitors.

And about an eighth of the.

So,

so just to sort of, uh, understand this better, right?

What sort of companies are these PE firms looking to buy?

Which, what industries are.

Yeah, so, um, we see manufacturing a lot.

We see energy a lot, and then we see financial services.

Ironically, , we don't think financial services have many emissions cuz

it's mostly people in offices.

But those, uh, those financial institutions are coming under massive

pressure to say, okay, how many of your employees are traveling?

, how many, um, are you left lead on any of these deals that are

actually producing more emissions?

Because we can calculate that all a lot better for them

than they can do themselves.

And most people would rather have an arms length, like an auditor

doing it instead of them themselves.

Listen, how, how do you do that?

And so for example, imagine a PE firm is looking to buy a,

buy a manufacturing firm, right?

So how do you sort of get all of this data within just a couple of days?

What are you doing there?

Yeah.

It's super fun to, I mean, I'm, it's very exciting to be able to do it,

but essentially we've, we've gotten deals with four major satellite providers and

with close to 30 ground sensor network providers and essential, what we do is

we will bring in that data, we get a list of the assets, so the buildings or the

warehouses that we're supposed to review.

And then our data is fully refreshed, fully refreshed for the

entire planet every three days.

So we can take measurements and then we can go back up to 12 years and we can

forecast likely output in the next three.

Got it, got it.

So, so talk, talk about, so let's, let's sort of, uh, move

to your product first, right?

Because look, my, my sort of audience are majorly software audience.

So typically they build software and they end up selling it looks like you're

doing a , you, you similar, but you're doing something else apart from that.

So just help me ex uh, understand, right?

So once you collect the satellite measuring right, how

do you sort of transform that into whatever is needed for.

Customers.

So what exactly do you do?

You do in of course, process thing and is it automated manual?

Do you use any software?

They just talk about the product that you really have.

Yeah, so the, the product that we use most often for the private equity

use cases called Sage, s a g e, or S, spatial Asset for Greenhouse Gas Emission.

And essentially what we do is we will train our satellites directly

onto the assets we're looking for.

The satellite will actually line up with the sun.

And then we can assign a different color for a different gas.

So carbon is usually blue, methane is usually purple.

And then polycarbonate gases are usually pink or white.

And essentially we can track how intense that is based on the visuals

and that can go go down up to five meter resolution if we need it.

So we take that information, then we'll pull it from the ground sensors as well.

So with satellites, you usually have some problems because there can be wind

dispersal, you can be next to a freeway.

So there's a lot of mix.

With ground sensors we can actually measure and hold it against the

satellite data to be more precise.

We then essentially build our models to calculate exactly how much that

business or that asset under review is responsible for, and then push

that back to them really quickly.

We use AI to essentially confirm back that the data and the outliers that we've

identified really do harmonize and then we'll benchmark it against our customers.

So is this software powered?

So do you have a, do you have a set of engineers who are actually doing.

Yeah, so

Josh Pitts is our c t O.

He's worked at pretty much every major house.

So he is done Google, he is done Amazon, he is done several major

engagements with Microsoft and whatnot.

So he's built all of the software behind to empower.

Our other co-founder, Dr.

Gopal, all of all of her academic work is basically pushed into the software.

Okay, so this is not essentially a data player then you are

actually end up selling, you, you are selling software to be honest, right?

So you are sort, you have a software that is correct, which is sort of, you know,

extracting these patterns or whatever you call it, out of the satellite imagery

and you are sort of transforming them into meaningful data for your customers.

That's what you're doing, right?

You got it.

Alright.

Right.

Alright.

So you are, you are, you are a typical SaaS company then, so let's,

let's sort of get into that, right?

So, so, uh, so just give me some approximate numbers in,

of a few customers, right?

How many customers do you have on your platform?

As of.

So we just broke through to 20.

So we've, uh, we've been adding really quickly since Sage got rolled

out, and then we've got pretty grand ambitions for the future.

Sure.

And, uh, can you reveal your revenue, like approximate revenue?

Is that something that you can do?

No.

So I can tell you a range.

We can't tell you.

Yeah, totally.

We're, we're over, we're over a million.

And then really looking to double that pretty quickly here.

And is that a r r That's a r.

Okay, so, okay, got it.

So you've got million.

Got it.

So, and talk about your growth.

Right?

So when, where were you would say 12 months before today?

Yeah.

So we went through the Techstars Barclays Accelerator in New York.

Um, and graduated through that a year ago.

And, um, really between then and then our participation in the Mass Challenge

program this year, um, our product really went from almost nothing to this.

Okay.

So we had done a lot of research into the, the, the technical and the climate

change problems affecting insurance.

FinTech in general, and especially finance because there's so many

firms that want to be net zero now, but don't know how to get there.

And that's where we ideated on the Sage product.

And really since we got that running earlier this summer,

it's been off to the races.

So.

So

essentially you're saying in one year you went from zero

to 1 million, approximately 1 million with, with around 20 customers.

Is that what you're saying?

Okay.

No, I'm not, I'm not even gonna ask anything about your product

or, you know, your customers.

I'm directly deep dive into, you know, how you're getting all of these customers.

So like, since you know, you, you've got just 20 customers, right?

I know you, you really know where all of these customers are coming from.

So let's start with your top funnel first, right?

So where are you finding all of these potential leads in the first place?

Yeah, so we, we are very, very focused on using the networks we're into.

So our first institutional money was from Village Global, which is

a, um, a VC fund in San Francisco.

They have a really tight group into the financial industry, and

that's helped us when we got into the Techstars Barclays Accelerator.

it's very, very focused on, um, family introductions.

Basically like not introducing you into, into conversations with the

firms that really want to change.

Cuz there's a whole bunch of firms that are saying they wanna do this, but when

it comes to actually paying money or putting resources, they're like, Ooh,

actually we just did a press conference,

So with us, it's really using those good introductions to connect to the firms

that really are ready to do something and pay for it and really get ahead of

the rest of their competitors for it.

That's where we've been able to gain the customers.

Is that the only channel that, that you just focused

on so far, just based on this intro?

Far?

Yeah.

So far, obviously, right?

Yeah.

Cause we're, we, we just got to product market fit, so now we've,

we, now our challenge is just to go out and market, but, yeah.

Makes sense.

I wanted to build what that, that

makes a lot of sense.

Anyway.

So no talk about your conversion, right?

So no.

Once you, once somebody introduces you to this potentially, right?

Who is sort of looking to sort of use your product, what happens now, and I

w I really want you to walk through the exact process that you sort of typical.

Take Right.

Uh, with, with real examples so that we can understand how it goes, right?

Yeah, yeah,

of course.

So it, uh, first off, it depends on the size.

So we have some very large customers.

I mean, with them, our focus really goes to finding that internal champion.

So this is such a new space, and so many people are worried about doing it wrong.

That for us, finding somebody bold enough to really, to understand why what we're

doing is better than what they can get for the rest of the market is vital.

If we're, if we're going, uh, for a big whale and we can't find

an internal champion, we usually just kinda let them drive because

it's not gonna, which team do you sell within a company?

Which, who, who's this target persona that you're targeting?

Who's this champion?

Yeah, so

you.

Usually it's the head of data will come to us or the Chief Sustainability Officer.

Mm-hmm.

. So, um, it depends if the firm is looking to make itself net zero or if they're

looking to use us to verify their deals.

Mm-hmm.

, there's two different people usually in those groups, but they know each other.

Got it.

So yeah, talk about that.

So once you find this, you know, internal customer, so internal

champion, what happens after that?

So, so I'm understanding, so is it a sales led motion where you've got

a bunch of people within your team trying to, you know, get into these

meetings, maybe have those, like talk about the entire conversion funnel?

Yeah, so the conversion first is usually them asking something

like, I heard that you guys can do this 10 times faster than competition.

Tell me, are you just one of those startups that just says stuff to try to

get people in the door ? So a lot of times it's overcoming that first objective.

And then we have a, we have a pretty nice demo that we can actually run through that

lets people see what the current setup is from a lot of our competitors, and

then lets them see how ours goes deeper.

is more understandable at every education level and is really auditable.

Like people can really stand, be beside behind our expertise in a way

that they can't with our competitors.

So it's really getting them to really see like, oh, okay, I get it.

They're doing this different and better.

That's the first hurdle.

Mm-hmm.

. And then from there it's okay, how can I plug you guys in?

This sounds perfect.

So what happens after that?

So let's say you've managed to convince someone with a demo, right?

So now how do you sort of convert them into paying customer?

So what's the exact process?

Do you

Yeah.

. Yes.

So we have, we have a couple different tiers.

The, it depends, uh, we have two use cases.

One that we've seen is if a customer of ours or a prospect has a specific

portfolio of assets and they want to make sure that that portfolio is carbon

neutral, that's a different use case.

Sure.

Than if it's a new company that says, I've never calculated my

scope one emissions, help me.

Yeah.

So if it's the financial assets, we usually take an audit of what they've got.

And then we'll ascribe what portion of all the companies they own, that they're

carbon, they're they're responsible for, and then they can use that as their offset

number to either buy offset credits or to start decarbonizing their own industry.

On the other side, for the, the companies that have never

done this before or their bank.

Or their asset manager, et cetera.

Our approach is really much more generalized to say, here's the benchmark,

here's the direct assets, and this is how your customer sits in between.

So they essentially get like a report card when they're looking

at multiple assets and how

much time does it actually take for them to sort of plug your

solution and start seeing that value.

Yeah.

So, um, this is more my background as a banker, but I push people pretty hard

at the beginning to say, look, if you're not interested in going quickly, we're

probably not the best company for you.

So from in, from con confirmation of interest to booking for a big

firm, that's usually two months or less is what we try, especially with

just a foot in the door approach.

Yeah.

And for more of the smaller shops, we can do that in a couple of.

Got it.

So, so what happens in these two months?

So is it, uh, so like how many, so I'm just trying to understand like how

tough it is to sort of sell these deals.

Right.

And these are huge deals, to be honest, right?

50 K CV is a huge deal.

Yeah.

And so I just wanna get the sense of how many meetings do you do and like,

what happens during those meetings and like who, who, who are the ones

who are actually doing these meetings?

Do you have any closers in your team?

So just uh, give us a sense about that process within those.

So the

first couple of calls, I would say for a, for a medium sweet

spot client for us, we're gonna have about some meetings in those two months.

The first three are going to be vetting where essentially they bring in

their chief E S G people, their chief sustainability people, and usually

their head of vendor management.

And they put us through the ringer.

They want to make sure that we're academically sourced, that we're, we

have insurance, that we back up what we have and that we have other customers.

Okay.

After we get past that.

Okay.

Floodlight is a, is a serious player, mark.

It's all about how do we start implementing you.

So do you guys want us to go to your entire portfolio or do you just have

one that you want us to focus on?

Or in the other use case it's do you have a live deal now that you're

looking to either buy or merge or acquire with another company?

Because that way we can turn it around in four days and really show them how

quickly both they can get the data and the analytics to back up a good

decision or get them out of a bad one.

Right.

So, so, got it.

So once, let's just say once you, with these customers, I know it's still early

days, it's just been in New Year, right?

So how do you plan on to expand these accounts, right?

And what are your pricing access along which you can

potentially expand in the future?

So we're looking at several marketplaces.

We, we posted this on LinkedIn, so it's public knowledge, but we're on

the open fact set marketplace as well.

Um, and that, that's really been helpful for us because if a, if a

data provider has trusted as fact set has vetted us and said, Hey, this is

legitimate good data you can build on.

That helps us.

We've done the same with Chainlink.

They're a Web 3.0, uh, both cryptocurrency provider and a blockchain enabler

that's really taking over the.

Those kind of, uh, flywheels for us are vital because we want people to be able

to access us, but borrow the legitimacy of other firms who will say, Hey, trust us.

We've vetted these guys.

So a lot of what we do then is really saying, Okay, you can trust us.

Here's the data.

Here's an example.

Tell us what your exact problem is and then we can give you one of

our three products that are now or co-develop one if it's in the future.

So my question, I'm usually the closer.

Yeah.

My

question was a bit different.

So I was trying to understand, for example, if you, if you

landed a 50 K a c V deal, right?

If you managed to close a 50 K deal, so how do you convert that to, let's say, a

hundred K or one 50 K in the next year?

So how are, how do you plan to expand a landed account?

So that was my

question.

Yeah, great question.

No, its, so the, the first deal will usually be what's called scope one.

So it's director measuring their own emissions.

The, what we can tack onto that is scope two.

We can give them some preliminary work around their Scope three,

so their supply chain as well.

And then it gets a little bit deeper as we a, as they actually wanna

adhere to different frameworks.

So there's sasb, there's T C F D, there's UN sustainable develop gold

numbers, and then there's even p a.

So all the services and all the intellectual quotient.

Required to really adhere to.

Those are cross sells for us that we can really bring into, bring

into expand that relationship.

Alright, so one question here.

So for all of these customers, right, so, and I'm talking about the second

segment where a cus a customer is basically buying your product to

measure their own, you know, emissions or whatever you call that, right?

So, so why is it that they really wanna measure?

Is it, is it some compliance that they're trying to sort of, you know, follow or

is So what is that necessity and why is.

That they're sort of seeing this problem all of a sudden, what changed?

Right?

So what's the

trigger?

? Yeah.

So BlackRock, three years ago, um, Larry Fink sent a letter to every one

of their stakeholders, and this is 7 trillion behind it saying, Hey, every

C-suite person hearing this, you need to start tracking the c s G number in

reporting it or we're going to fire you.

Okay.

That was.

What really got people moving this year is when the s e c proposed a new rule

in March saying you have to, if, if we adopt this rule next year, you have to

be able to stand behind the numbers.

You tell us for scope one and two with the same legal ramification if you're

lying as you would be on your financials.

So if you, if you go to market and your C F O has signed saying you have

a hundred thousand tons of carbon and it's proven that you have 200.

You're looking at the nine figure, fine if, if looking to Europe

is any forecast for the future.

So that's where we see people kind of terrified now.

Okay, guess.

Looks like it's a great team to sort of build your company.

Uh, compliance is the only thing.

Help us how we say it, but yes, time is good.

look, I mean, compliance is something that will definitely work.

I mean, if you have a rule, if you've gotta follow it, well,

people have to buy it, right?

There's absolutely nothing in the world.

Exactly.

That can be it.

Yeah, that totally makes sense.

And just, and

most of, most of Europe, Japan, and New, and Singapore, New

Zealand, they're already doing this.

They already require it.

So it's the US just finally saying, okay, world will do the.

. Got it.

And talk about your first segment.

Let's, let's talk about them, right?

So you mentioned PE firms sort of vetting all of these potential

acquisitions, so, uh, you know, sales that they're trying to do, right?

So in terms of the use case as such, isn't it a one-time thing, right?

For example, if I'm a PE firm, right?

So how do you go on.

So how do you close that subscription business with them?

Because I'm assuming these are like, yeah, you got the question, right?

Yeah,

yeah, I got the question.

So there's two reasons to continue on a subscription instead of a one and done.

The first is there are a lot of federal programs like Pace.

Where if a PE shop can show that they are actually reducing their

energy usage or essentially reducing their carbon emissions, they can

get, um, beneficial interest rates from their, from their banks.

They can get better tax treatment, et cetera, but they

have to have a proof case.

They can't just say, we think we're decarbonizing, so they can use our

data for that as the first one.

The second is, . Most of large PE firms are now incentivizing their deal makers

on full performance, not just financial.

Mm-hmm.

. So if they can actually prove that same track record of either we bought this

asset and we reduced its carbonization, or we bought an asset that had horrible

carbonization and we've turned it around and its profitable, that's major bonus

potential for all players involved.

Plus the environment is better, which means that they have a

better reputation, they have less reputation risk by being perceived as.

You know, somebody who doesn't care about the environment but needs their e p s.

Right?

So

essentially they need this continuous up-to-date information.

That's where they're gonna stick with your subscription.

Got it.

That makes no sense.

Yeah.

That, that's where you get

the most value.

Yeah, absolutely.

Let's just, let's, let's understand, you know about your backstory, right?

So when did you start the company and just talk about how many on your founding team.

Yep.

So I started the company three years ago.

Uh, there are three of us on our founding team.

I was a career banker.

I worked for Wells Fargo and Silicon Valley Bank and capital markets.

And really most of my, um, most of my interest really webbed news

history and financial altogether.

And so as I got to see the rise of E s G impact sustainability investing,

I saw that there was so much.

It was all just like whatever, you could write it up on a blog.

People just agreed with it and accepted it and that seemed

like a, a terrible idea to me.

. So seeing it and getting to meet with Succ and Josh and see what technology

is available to really move this whole industry from kind of a wild, wild west

to something now where it's establishment adopted, that's what we want to do

and we want to take the top spot.

Got it.

And how many in your team as of today, the total number of folks in your team?

So we have seven members and we have quite a few contractors.

As we kind of, as we grow, we can pull those back and forth, but

that's, uh, that's where we stand now.

And how many engineers on the engineering team?

We have three.

Three.

So, so I'm just trying to understand how complex is your product?

So how did you manage to build a product of that, this caliber

with just three engineers.

Yeah, the, I, I really have to hand it to Josh Pitts.

He's our c t o and he's one of those people.

I'm sure a lot of your audience will understand this well.

He's one of those people who never wants to hire somebody to do something

he hasn't done before himself.

So every piece of, of our, um, technological infrastructure,

he's blazed the trail.

and then he hires back.

We really look, look very, very fiercely at the, the credentials and the ability

to be a lifelong learner on our tech stack, cuz it is ambitious build

Yeah.

And when did you write that first line of code?

Was it three years back?

No,

. Nate Wyne: So I'm, uh, I'm the

I'd probably said the first line of code was in year two.

Year two.

And first dollar of revenue was that in year.

Uh, that, no, we made some, we did a private beta, um,

with a, a part of the business.

I'm embarrassed even to talk about now, just as part of our iteration

process for pulling in political donations instead of environmental data.

But we ran a private beta then that was our.

Our first dollar.

I think I was crying.

. Got it.

So Nate, so what next?

Right?

How, how do you plan on scaling, right?

I know till 20 you could, you, you, you've used all of these

warm intros and all of it, right?

So now how are you gonna grow it to, let's say, 10 million in the next few years?

What's the plan there?

Yeah.

So the plan really for us is we want to be, we want to be

the most admired, um, non-financial data company in the world.

We really want to be the E S G killer or the, um, the E S G Bloomberg terminal.

What we really need to do in order to accomplish that, is we need to make sure

that our data is rock solid and, uh, and.

Understand why people need to use it quickly.

So for us, that's marketing and continuing to build the team out

with the same level of expertise we have now cuz there's just not a lot

of people who have this expertise.

It's a pretty new field.

So we're really looking in far, especially with our professor, with Dr.

Sui Gopal, a lot of her connections to academia.

We're actively hiring into so that we keep that top mark of really what

should be the bleeding edge of the

science.

So talk, so talk about this marketing theme that you're

sort of trying to build, right?

So, so what's your vision?

Who are you gonna hire and what exactly are they, are they gonna do?

Where are you gonna focus during those next six or 12 months?

So just talk a bit about that.

Yeah, so our, our marketing team, um, I'm running marketing

now cuz I'm a, a startup founder.

I have to wear 12 hats every day,

But essentially what our marketing team, as we hire them on to do their

job, will really be to help people that have landed a great job, like Chief

Sustainability Officers, e s G folks.

They're making huge money, especially for established firms.

Mm-hmm.

, what none of them want to admit is that they don't know how to do it.

So our marketing really is designed to.

We won't tell people , but you can use us as really the steel thread to

understand how to actually make an actual impact rather than just make

things look pretty but not do anything.

So for us, that's, that's really our, our modus apprendi is to really say we

need to find the people that look to wanna make an actual impact instead of

the ones that just wanna make it look.

Right.

So, so, so my question was more in terms of, you know, uh, in,

in terms of the exact processes and, you know, headcount, right?

So, so where I, so is it gonna be sales led motion or are you gonna sort of, you

know, go marketing heavy and sort of, you know, so how ex and make it, you know, a

bit more self-serve or whatever that is.

Right?

So how exactly are you gonna scale this from 1 million to 10 million?

That, that was more of migration?

Yeah.

Yeah, so it's definitely marketing led, so we really, we really

are, we're looking at some of the best feedback we've gotten from our clients in

terms of how it changed their business.

We want to use that very quickly before any of the other bigger

players really understand what we're doing to say, we can do this for

you too, in a scalable solution.

Quick.

Mm-hmm.

. So for us, being able to get that message out we think is the way

for us to grow the fastest because our solution within the next three

months should be fully automated.

We won't really need a human to touch every contract.

And then it's a lot easier for us to onboard as many new

projects as there are out there.

Got it.

And just, uh, one last question.

So you mentioned you've been part of few accelerators as well.

It's how much funding did you raise as of today in total?

So we've raised a total of one seven everything at 1.7 million.

Everything since then has been bootstrapped.

That's absolutely great.

So you've got a wonderful sales playbook and I mean it's, you

really nailed it so far, I'd say.

Uh, so , we're trying.

Yeah.

Thank you Nate.

Thanks.

Thanks for taking the time to talk to me.

Hope you scaled, let light to much greater heights.

Thanks so much Apprenda.

Really love being here.