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How we’re achieving viral growth (6x last year) through strategic partnerships
Episode 3510th April 2023 • B2B SaaS Podcast • Upendra Varma
00:00:00 00:20:34

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Shownotes

Kobi Freedman, Co-Founder & CEO of Findings, talk about how they have used strategic partnerships to grow almost 6x last year to a few million dollars in ARR. We talk about how they are unlocking this viral growth & his vision for the company.

  • How Findings is automating supply chain security and privacy compliance at scale being the one-stop-shop for all security VRM and compliance requirements.
  • How they are serving around 1000 customers & almost 250K vendors of these customers
  • How they’ve hit a few million bucks in ARR with almost 6x growth over the past 12 months
  • How strategic partnerships are leading to most of their growth
  • How their sales cycle looks like
  • Team, external funding & future vision

Transcripts

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so a stock exchange has a supply chain.

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We provide them a solution to facing their supply chain.

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So they bring in their turn, let's say a hundred vendors, and each vendor

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will bring five of their vendors.

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So you are creating a network effect through that.

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And if you are long touch enough and you are efficient enough in your

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like initiating those uh, sequences, then you can scale exponentially.

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Hello everyone.

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Welcome to the B2B SaaS podcast.

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I'm your host of PRA Verma, and today we have Kobe Friedman with us.

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Kobe here is the c e o and co-founder of a company called Findings.

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Hey, Kobe, welcome to the show.

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Hi, Pendra.

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Thank you for having me.

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All right, Kobe, so let's try to understand what your company does

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and why customers pay your money.

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So Findings is a, uh, a compliance automation platform.

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Uh, we mainly deal with what we call B2B compliance.

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Um, it's all kind of requirements around supply chain engagements

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that enterprises has to.

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Um, conduct, um, compliance and regulatory aspects, uh, with third

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parties, fourth parties, partners, uh, connected parties and so on.

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And in the climate around the world, there is a spike.

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Of requirements coming from regulatory compliance all around the world,

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as well as cybersecurity threats that require companies to conduct

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those processes at larger scale.

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And we are helping those companies to do a more efficient, more

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effective, more scalable, uh, work while spending less their engagement

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compared to the ways we've done today.

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And what sort of compliances are this?

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Like, can you name a few of.

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Yeah, sure.

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So we started, uh, within the cybersecurity world, uh, our, uh,

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me and my co-founder are both coming from cybersecurity background.

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Uh, the cybersecurity was our starting point, and in that regard, we dealt

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with all the typical cybersecurity frameworks, uh, and threads out there.

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Um, niche compliance, iso SOC two, and, uh, All the range further down the

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road to shipping companies, uh, cmmc around defense contractors and banking

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regulations and so on and so forth.

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And then over time we grew into other domains.

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Uh, data protection and privacy were the natural ones.

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And in the last year and a half, we are heavily engaged within

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the E S G market and trade compliance market, mainly from the.

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Of the, uh, Russia Ukrainian crisis.

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Got it.

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And how exactly do you do this?

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Is this purely software that you're selling with selling, or

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do you also have a services layer?

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Because typically I would understand compliance is lots of stuff, right?

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It's not just a simple software that you can plug in, you know, get it done right?

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So how exactly are you solving this problem?

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Yeah, so you are completely right.

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So basically I, I uh, um, I example that as building a puzzle.

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Every engagement is like a lot of pieces of puzzle, part of software,

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part of them services, uh, that needs to be inspect, need to be analyzed,

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uh, and then, uh, combining it together creates the overall compliance

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risk that the company experience.

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Uh, we are.

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We took a, uh, very unique approach in the industry.

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I think we are the only one we do, so we are sort of the platform

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for orchestrating all kinds of pieces of puzzles, if you like.

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Uh, we created a set of capabilities that enable each customers to customize.

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Automate, uh, everything around their vendor risk management program

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in every domain that they choose.

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And we are orchestrating connections to all the other service or product

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or data providers that can contribute in order to aggregate this.

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Uh, so we are purely software.

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Um, we are working a lot with service providers and, uh, mainly managed

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services and MSPs, managed service security providers, uh, and also

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some integrators around the world, mainly on our larger deployments.

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Got it.

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And one last question around the product here, right?

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So typically companies would do compliance like once or something like that, right?

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So how exactly is your software is, is it a recurring model?

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Like does your software help them stay compliant all the time?

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Or is, is it something that they would use at once for a, for a couple of months

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or some, some like for, for a period of time and then they just choose to move on?

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So the world is changing in the requirements and we are enabling to, uh,

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to, to do, uh, to go through this change.

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Basically, compliance process is very manual, labor intensive,

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very contextualized to the, uh, to the specific situation between

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the vendor and the customer.

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And cause of that, it cannot really scale.

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Most of the services out there today are billable hour based, uh, mainly made by.

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Consulting firms, uh, the, uh, compliance process is being done

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upon onboarding or upon engagement.

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And sometimes if it's a, a regulated company, every certain period of time,

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two years, maybe more than that, depending on the budget that they have, but their

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requirement is to go, uh, into, uh, to get into a continuous monitoring.

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Phase in that regard.

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The fact that we are automating a lot of the manual processes, uh, around

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compliance, around verification, uh, audit checks and so on, enables our

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customers to basically dramatically reduce cost per engagement.

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And because of that, to be able to cover much more, uh, engagements and to

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do that on a continuous basis rather.

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Periodic basis.

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So basically we are enabling them to build their own vrm Yeah.

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TPR program and to orchestrate that automatically.

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Alright, so let's move on to your customers now, right?

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So I wanna get a sense of like, how many customers do you serve

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as of today on your platform?

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So it's a tricky question because we are dealing with supply chain.

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So there is a network effect here.

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It's important to, uh, to understand that we have a unique model.

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Basically we are a subscription based company.

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We are encouraging to bring as many engagements as possible.

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Um, and we are zero touch.

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That means that we are, customers are coming to us, registering and starting

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to experience a product going from there.

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Currently, we're serving.

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About a thousand customers.

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Uh, and we have around 250,000 companies overall who are served in our platform.

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Uh, they're vendors basically.

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They're supply chain partners.

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And, uh, because of our go to market strategy, which is partnering with a lot.

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Service provider, stock exchanges and other entities.

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We are in processes of onboarding 10,000.

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Um, More customers, uh, who will be using us in order to engage.

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So, so when you said thousand customers, are these service providers

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that you're talking about or the end not, not, not necessarily.

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Those are like the enterprises who are Yeah.

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Getting services from service providers or directly engaged with us.

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And what about the two 50 K number that you mentioned?

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Those are their vendors.

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So basically every bank, for example, is working with us, might have a

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thousand vendors that they need to.

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And verify and monitor, and they, in that turn, become our customers as well,

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because they're using us in order to automate their customer engagements.

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Got it.

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Right.

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And like all, all of these on a recurring plan or how does that work

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in, in this particular space for you?

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We have different subscription models for the different roles,

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whether you are a downstream role or an upstream role, uh, all of them

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are recurring subscription model.

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With different flavors, uh, different price points.

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Uh, we are always experimenting around what would be the sweet

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spot around those price points.

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But yeah, we are monetizing on all, all of them.

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Got it.

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So I'm gonna ask you a question and there's gonna

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be a vague answer, obviously.

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So I wanna get a sense of how big these deal sizes are.

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Right.

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On an average, how much these customers pay you?

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Is it $10,000?

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A hundred thousand dollars?

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Is it a million bucks?

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What is this?

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I know there's gonna be a broad range, but if you were to try to sort of put

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them into buckets and sort of put a number to it, how big these size deals are.

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So I, I, I would say that I, um, It's, it's like depending on your role.

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Yeah.

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So if you are an enterprise on our system, meaning a downstream role,

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uh, someone who needs to assess these, uh, third parties, you'll be,

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uh, entering into one of few tiers.

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Uh, the average would be few thousand dollars.

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Annually, uh, to start, uh, your journey with us and scale from there.

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And, uh, the higher tier would be few tens of thousands of dollars per year.

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Mm-hmm.

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Uh, anyway, it's, uh, considered to be relatively low for the amount

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of vendors that we are providing, which is unlimited basically.

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Our whole intention is to enable you to grow your, uh, amount

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of, of, uh, of engagement.

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And through that, basically see more and more value from our product.

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Uh, Having said that, that would be the, uh, cost per legal entity.

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There are quite a few, um, enterprises who are subjected to multiple

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regulation, multiple uh, jurisdictions.

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They need, uh, to have numerous, um, entities, uh, and uh, and so

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that increases their subscription.

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On the vendor side, which is the upstream side, you would pay by the amount of

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connections that you have with customers.

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And we are, um, playing around with different models, but the

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subscription would be in the tens of dollars per month mm-hmm.

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To few hundreds per month for a full, uh, scope of engagements.

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Got it.

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And can you reveal where you are as a, as a company in terms of

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revenue that you've done last year?

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Approximate.

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We, we are in the ballpark of few million of a r r.

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Uh, we are, uh, rapidly growing.

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Uh, we announced in the last few months, few strategic partnerships.

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In the coming, uh, year or two to tens of millions of dollars.

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Mm-hmm.

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Uh, the largest of them is MasterCard, where we signed a, uh, strategic

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partnership with MasterCard to serve, uh, all their customer base

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and few others to be announced soon.

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Yeah.

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Sure.

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And then in terms of growth rate, how are you growing?

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Like, like what was your revenue say 12 months ago and how did you

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manage to grow during this past 12?

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We grew six times, uh, six times, say six times.

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You were, you were less than a million, million bucks, something like that

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or something on that in that range.

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12 months.

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Got it.

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We were quite significantly less than a million last year.

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Uh, we matured with our product, uh, basically we're not trying

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to optimize on one account.

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We're trying to.

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On the network that we'll, we'll come to the growth growth now right away.

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So I, I wanna understand right, where you're getting all of

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these growth from, right?

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Strictly from a top of funnel perspective, where are you finding

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all of these new customers?

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What's been working for you?

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Uh, regulation and awareness.

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Uh, it's, uh, we are living in a space where it's, uh, uh, pretty high on

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the mindset of a lot of companies from different angles in the cybersecurity

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space, supply chain concerns became the number one attack vector in

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the industry since Covid outbreak.

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And from ESG perspective, it is a rapidly growing regulatory compliance

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requirement all around the world.

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Uh, so this is basically push the engagement of customers.

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So how are you, so, so I'm, uh, specifically talking about

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the marketing strategy here.

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So how are you reaching out to these customers?

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I know they must be looking for a solution like yours, but how are

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you reaching them effectively?

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What's, what's the group channel that's been working for you?

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Primary.

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We invest quite so, so on a strategic, uh, approach, we invest quite a lot in inbound

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and content, uh, based on marketing, uh, providing them value around how to do,

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uh, the se the, the process that they, uh, are expected to do within the ESG space.

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There is a lot of requirements of for education and we're helping them there.

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Uh, and everything is like tuned to support the inbound traffic that can

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then, uh, be converted to, uh, users.

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Um, on the shorter and midterm, no.

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So we tend to, so, so I'm not talking about the strategic things.

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I'm talking about what's really been working in the past 12 months.

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I no long run content will work for you, but in the past 12 months,

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what's really worked for you?

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Is it inbound?

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Is it out?

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So mainly partnerships with, uh, strategic partners that ring with

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them the same interest and, uh, and go to market capabilities.

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The main ones would be stock exchanges.

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Uh, we found interesting, um, synergy between us.

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And quite a lot of stock exchanges in the world.

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It started from NASDAQ and mainly, uh, London Stock Exchange Group

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that we are, uh, working quite a lot with them around D S G.

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And they, their turn basically, uh, we go to market, to the traded companies

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and traded companies are, most of the time they're like the top of the funnel

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in their jurisdiction and go from there.

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Right.

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And so sort of a viral model starting from, um, a, uh, like a single point,

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which has a lot of traction to.

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All right, so essentially you go to stock exchanges, you look at these

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traded companies, and then you start, start there and then sort of, you

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know, start conversations there.

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Is that what's been working for you?

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So a stock exchange has a supply chain.

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We provide them a solution to facing their supply chain.

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So they bring in their turn, let's say a hundred vendors, and each vendor

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will bring five of their vendors.

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So you are creating a network effect through that.

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And if you are long touch enough and you are efficient enough in your

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like initiating those uh, sequences, then you can scale exponentially.

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And this is what we're trying to.

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Sorry, and like talk about the sales cycle or, you know, the conversion aspect.

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Like you, you mentioned a lot about, uh, it being not touch.

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Is it really not?

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Or like, is it as simple as somebody discovering you and just

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getting started or does, do you have anything else happening there?

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So I would say that we are much closer to no touch than we would what we used to be.

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But basically it's a journey.

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Uh, it's uh, it's a long journey of, uh, understanding

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and automating those processes.

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Uh, I would say that, uh, we are about, uh, 60% no touch.

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The rest is low touch.

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Um, we, everything that we develop and do, we expose self customization capabilities.

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So we are getting more and more, uh, better and better in that.

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And, uh, um, I would say only five to 10% of our capacity nowadays

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is higher touch, mainly for the very large accounts that we.

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And talk about the sales cycle, right?

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It's like, how much time does it really take once somebody discuss

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your product and they'll realize that they've got to, you know, use it?

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What happens after that on an average, typically at this point of time?

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So it, it, we, we have a rather quick sales sales cycle, so it's important

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to remember that we are inbound based.

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So basically we are very low touch.

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So we start with providing them a, uh, premium account.

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They can play along with that with me.

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We are, uh, very good in exposing our value through tutorials

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and online, uh, capabilities.

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And when they are, uh, getting into a conversation with my sales team, it's like

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based on a rather better understanding of the product and its value.

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So we are focusing on the more, like what you really need, uh, from the product.

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So, uh, the sales cycle will be.

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Uh, faster.

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Definitely considering the fact that we are talking enterprise.

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So in my past, I would do enterprise sale that will take 12 months.

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Now we are, uh, doing like two months, three months.

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Uh, and, uh, then our uh, uh, focus is how do we provide you

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value through enabling you to.

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And execute on your supply chain and talk about retention right here.

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So essentially, so you wanna provide that continuous compliance

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monitoring on a regular basis, otherwise they'll just turn out.

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So how does the churn numbers look like today?

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Typically, because, It's, it's gonna be different in your space, right?

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So, you know, it's a, it is, uh, it's, uh, sounds like a cocking to

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say, but we almost have no churn.

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But, uh, I, I, it's not that it's not existed, but, uh, the value we

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are providing con, considering the.

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Um, the investment is such that it's worthwhile staying with us, and we

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invest a lot in developing, uh, further our automation and AI capabilities,

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so their life becoming more and more easier and more and more valuable.

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Uh, so it looks good on that end.

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Are, um, mainly we're trying to optimize on the way forward in terms

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of enabling you more capabilities and more vendors on the platform.

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Got it.

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And let's, let's talk about, you know, your team, right?

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How big at u is and like how many folks in your team as of today, and

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how many in engineering was this?

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How many in the GTM side?

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So we are currently about 30, uh, employees.

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Uh, we grew.

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Five times in the last year.

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Uh, so we've growing quite, uh, quickly, um, about 20 plus our r and d uh, uh, team

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and, uh, rest our business development, marketing and US operations mainly.

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Mm-hmm.

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Um, even though part of it of the team is in the US we are focusing

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on the US and Europe and apac.

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And, uh, but yeah, this is, this is this.

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And then have you raised any external funding so far to grow the company?

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Yeah, yeah, for sure.

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It's, uh, you cannot do 30 employees with that.

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Uh, yeah.

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Uh, without, uh, how much in total raise?

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Around 10 million.

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Got it.

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And like, yeah.

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One last question here, right.

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So what's the vision here?

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Right?

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Where do you see your company going in like next five years?

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So we are going to be the, um, the compliance marketplace.

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Uh, we are, we are creating something that I, uh, like to explain that

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with a combination of monday.com and Ariba combined for compliance.

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Basically, uh, we are going to be a sourcing point for compliance data.

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Uh, of, uh, supply chain engagement, we gonna be the larger, uh,

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and largest solution out there.

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I think maybe even the only solution out there, mainly because we are

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the only vendor in the market who is oriented towards this goal.

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Got it.

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Yeah.

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All Covid, thanks for taking the time to talk to me.

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Hope you scale your company to much, much greater heights.

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