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.
so a stock exchange has a supply chain.
Speaker:We provide them a solution to facing their supply chain.
Speaker:So they bring in their turn, let's say a hundred vendors, and each vendor
Speaker:will bring five of their vendors.
Speaker:So you are creating a network effect through that.
Speaker:And if you are long touch enough and you are efficient enough in your
Speaker:like initiating those uh, sequences, then you can scale exponentially.
Speaker:Hello everyone.
Speaker:Welcome to the B2B SaaS podcast.
Speaker:I'm your host of PRA Verma, and today we have Kobe Friedman with us.
Speaker:Kobe here is the c e o and co-founder of a company called Findings.
Speaker:Hey, Kobe, welcome to the show.
Speaker:Hi, Pendra.
Speaker:Thank you for having me.
Speaker:All right, Kobe, so let's try to understand what your company does
Speaker:and why customers pay your money.
Speaker:So Findings is a, uh, a compliance automation platform.
Speaker:Uh, we mainly deal with what we call B2B compliance.
Speaker:Um, it's all kind of requirements around supply chain engagements
Speaker:that enterprises has to.
Speaker:Um, conduct, um, compliance and regulatory aspects, uh, with third
Speaker:parties, fourth parties, partners, uh, connected parties and so on.
Speaker:And in the climate around the world, there is a spike.
Speaker:Of requirements coming from regulatory compliance all around the world,
Speaker:as well as cybersecurity threats that require companies to conduct
Speaker:those processes at larger scale.
Speaker:And we are helping those companies to do a more efficient, more
Speaker:effective, more scalable, uh, work while spending less their engagement
Speaker:compared to the ways we've done today.
Speaker:And what sort of compliances are this?
Speaker:Like, can you name a few of.
Speaker:Yeah, sure.
Speaker:So we started, uh, within the cybersecurity world, uh, our, uh,
Speaker:me and my co-founder are both coming from cybersecurity background.
Speaker:Uh, the cybersecurity was our starting point, and in that regard, we dealt
Speaker:with all the typical cybersecurity frameworks, uh, and threads out there.
Speaker:Um, niche compliance, iso SOC two, and, uh, All the range further down the
Speaker:road to shipping companies, uh, cmmc around defense contractors and banking
Speaker:regulations and so on and so forth.
Speaker:And then over time we grew into other domains.
Speaker:Uh, data protection and privacy were the natural ones.
Speaker:And in the last year and a half, we are heavily engaged within
Speaker:the E S G market and trade compliance market, mainly from the.
Speaker:Of the, uh, Russia Ukrainian crisis.
Speaker:Got it.
Speaker:And how exactly do you do this?
Speaker:Is this purely software that you're selling with selling, or
Speaker:do you also have a services layer?
Speaker:Because typically I would understand compliance is lots of stuff, right?
Speaker:It's not just a simple software that you can plug in, you know, get it done right?
Speaker:So how exactly are you solving this problem?
Speaker:Yeah, so you are completely right.
Speaker:So basically I, I uh, um, I example that as building a puzzle.
Speaker:Every engagement is like a lot of pieces of puzzle, part of software,
Speaker:part of them services, uh, that needs to be inspect, need to be analyzed,
Speaker:uh, and then, uh, combining it together creates the overall compliance
Speaker:risk that the company experience.
Speaker:Uh, we are.
Speaker:We took a, uh, very unique approach in the industry.
Speaker:I think we are the only one we do, so we are sort of the platform
Speaker:for orchestrating all kinds of pieces of puzzles, if you like.
Speaker:Uh, we created a set of capabilities that enable each customers to customize.
Speaker:Automate, uh, everything around their vendor risk management program
Speaker:in every domain that they choose.
Speaker:And we are orchestrating connections to all the other service or product
Speaker:or data providers that can contribute in order to aggregate this.
Speaker:Uh, so we are purely software.
Speaker:Um, we are working a lot with service providers and, uh, mainly managed
Speaker:services and MSPs, managed service security providers, uh, and also
Speaker:some integrators around the world, mainly on our larger deployments.
Speaker:Got it.
Speaker:And one last question around the product here, right?
Speaker:So typically companies would do compliance like once or something like that, right?
Speaker:So how exactly is your software is, is it a recurring model?
Speaker:Like does your software help them stay compliant all the time?
Speaker:Or is, is it something that they would use at once for a, for a couple of months
Speaker:or some, some like for, for a period of time and then they just choose to move on?
Speaker:So the world is changing in the requirements and we are enabling to, uh,
Speaker:to, to do, uh, to go through this change.
Speaker:Basically, compliance process is very manual, labor intensive,
Speaker:very contextualized to the, uh, to the specific situation between
Speaker:the vendor and the customer.
Speaker:And cause of that, it cannot really scale.
Speaker:Most of the services out there today are billable hour based, uh, mainly made by.
Speaker:Consulting firms, uh, the, uh, compliance process is being done
Speaker:upon onboarding or upon engagement.
Speaker:And sometimes if it's a, a regulated company, every certain period of time,
Speaker:two years, maybe more than that, depending on the budget that they have, but their
Speaker:requirement is to go, uh, into, uh, to get into a continuous monitoring.
Speaker:Phase in that regard.
Speaker:The fact that we are automating a lot of the manual processes, uh, around
Speaker:compliance, around verification, uh, audit checks and so on, enables our
Speaker:customers to basically dramatically reduce cost per engagement.
Speaker:And because of that, to be able to cover much more, uh, engagements and to
Speaker:do that on a continuous basis rather.
Speaker:Periodic basis.
Speaker:So basically we are enabling them to build their own vrm Yeah.
Speaker:TPR program and to orchestrate that automatically.
Speaker:Alright, so let's move on to your customers now, right?
Speaker:So I wanna get a sense of like, how many customers do you serve
Speaker:as of today on your platform?
Speaker:So it's a tricky question because we are dealing with supply chain.
Speaker:So there is a network effect here.
Speaker:It's important to, uh, to understand that we have a unique model.
Speaker:Basically we are a subscription based company.
Speaker:We are encouraging to bring as many engagements as possible.
Speaker:Um, and we are zero touch.
Speaker:That means that we are, customers are coming to us, registering and starting
Speaker:to experience a product going from there.
Speaker:Currently, we're serving.
Speaker:About a thousand customers.
Speaker:Uh, and we have around 250,000 companies overall who are served in our platform.
Speaker:Uh, they're vendors basically.
Speaker:They're supply chain partners.
Speaker:And, uh, because of our go to market strategy, which is partnering with a lot.
Speaker:Service provider, stock exchanges and other entities.
Speaker:We are in processes of onboarding 10,000.
Speaker:Um, More customers, uh, who will be using us in order to engage.
Speaker:So, so when you said thousand customers, are these service providers
Speaker:that you're talking about or the end not, not, not necessarily.
Speaker:Those are like the enterprises who are Yeah.
Speaker:Getting services from service providers or directly engaged with us.
Speaker:And what about the two 50 K number that you mentioned?
Speaker:Those are their vendors.
Speaker:So basically every bank, for example, is working with us, might have a
Speaker:thousand vendors that they need to.
Speaker:And verify and monitor, and they, in that turn, become our customers as well,
Speaker:because they're using us in order to automate their customer engagements.
Speaker:Got it.
Speaker:Right.
Speaker:And like all, all of these on a recurring plan or how does that work
Speaker:in, in this particular space for you?
Speaker:We have different subscription models for the different roles,
Speaker:whether you are a downstream role or an upstream role, uh, all of them
Speaker:are recurring subscription model.
Speaker:With different flavors, uh, different price points.
Speaker:Uh, we are always experimenting around what would be the sweet
Speaker:spot around those price points.
Speaker:But yeah, we are monetizing on all, all of them.
Speaker:Got it.
Speaker:So I'm gonna ask you a question and there's gonna
Speaker:be a vague answer, obviously.
Speaker:So I wanna get a sense of how big these deal sizes are.
Speaker:Right.
Speaker:On an average, how much these customers pay you?
Speaker:Is it $10,000?
Speaker:A hundred thousand dollars?
Speaker:Is it a million bucks?
Speaker:What is this?
Speaker:I know there's gonna be a broad range, but if you were to try to sort of put
Speaker:them into buckets and sort of put a number to it, how big these size deals are.
Speaker:So I, I, I would say that I, um, It's, it's like depending on your role.
Speaker:Yeah.
Speaker:So if you are an enterprise on our system, meaning a downstream role,
Speaker:uh, someone who needs to assess these, uh, third parties, you'll be,
Speaker:uh, entering into one of few tiers.
Speaker:Uh, the average would be few thousand dollars.
Speaker:Annually, uh, to start, uh, your journey with us and scale from there.
Speaker:And, uh, the higher tier would be few tens of thousands of dollars per year.
Speaker:Mm-hmm.
Speaker:Uh, anyway, it's, uh, considered to be relatively low for the amount
Speaker:of vendors that we are providing, which is unlimited basically.
Speaker:Our whole intention is to enable you to grow your, uh, amount
Speaker:of, of, uh, of engagement.
Speaker:And through that, basically see more and more value from our product.
Speaker:Uh, Having said that, that would be the, uh, cost per legal entity.
Speaker:There are quite a few, um, enterprises who are subjected to multiple
Speaker:regulation, multiple uh, jurisdictions.
Speaker:They need, uh, to have numerous, um, entities, uh, and uh, and so
Speaker:that increases their subscription.
Speaker:On the vendor side, which is the upstream side, you would pay by the amount of
Speaker:connections that you have with customers.
Speaker:And we are, um, playing around with different models, but the
Speaker:subscription would be in the tens of dollars per month mm-hmm.
Speaker:To few hundreds per month for a full, uh, scope of engagements.
Speaker:Got it.
Speaker:And can you reveal where you are as a, as a company in terms of
Speaker:revenue that you've done last year?
Speaker:Approximate.
Speaker:We, we are in the ballpark of few million of a r r.
Speaker:Uh, we are, uh, rapidly growing.
Speaker:Uh, we announced in the last few months, few strategic partnerships.
Speaker:In the coming, uh, year or two to tens of millions of dollars.
Speaker:Mm-hmm.
Speaker:Uh, the largest of them is MasterCard, where we signed a, uh, strategic
Speaker:partnership with MasterCard to serve, uh, all their customer base
Speaker:and few others to be announced soon.
Speaker:Yeah.
Speaker:Sure.
Speaker:And then in terms of growth rate, how are you growing?
Speaker:Like, like what was your revenue say 12 months ago and how did you
Speaker:manage to grow during this past 12?
Speaker:We grew six times, uh, six times, say six times.
Speaker:You were, you were less than a million, million bucks, something like that
Speaker:or something on that in that range.
Speaker:12 months.
Speaker:Got it.
Speaker:We were quite significantly less than a million last year.
Speaker:Uh, we matured with our product, uh, basically we're not trying
Speaker:to optimize on one account.
Speaker:We're trying to.
Speaker:On the network that we'll, we'll come to the growth growth now right away.
Speaker:So I, I wanna understand right, where you're getting all of
Speaker:these growth from, right?
Speaker:Strictly from a top of funnel perspective, where are you finding
Speaker:all of these new customers?
Speaker:What's been working for you?
Speaker:Uh, regulation and awareness.
Speaker:Uh, it's, uh, we are living in a space where it's, uh, uh, pretty high on
Speaker:the mindset of a lot of companies from different angles in the cybersecurity
Speaker:space, supply chain concerns became the number one attack vector in
Speaker:the industry since Covid outbreak.
Speaker:And from ESG perspective, it is a rapidly growing regulatory compliance
Speaker:requirement all around the world.
Speaker:Uh, so this is basically push the engagement of customers.
Speaker:So how are you, so, so I'm, uh, specifically talking about
Speaker:the marketing strategy here.
Speaker:So how are you reaching out to these customers?
Speaker:I know they must be looking for a solution like yours, but how are
Speaker:you reaching them effectively?
Speaker:What's, what's the group channel that's been working for you?
Speaker:Primary.
Speaker:We invest quite so, so on a strategic, uh, approach, we invest quite a lot in inbound
Speaker:and content, uh, based on marketing, uh, providing them value around how to do,
Speaker:uh, the se the, the process that they, uh, are expected to do within the ESG space.
Speaker:There is a lot of requirements of for education and we're helping them there.
Speaker:Uh, and everything is like tuned to support the inbound traffic that can
Speaker:then, uh, be converted to, uh, users.
Speaker:Um, on the shorter and midterm, no.
Speaker:So we tend to, so, so I'm not talking about the strategic things.
Speaker:I'm talking about what's really been working in the past 12 months.
Speaker:I no long run content will work for you, but in the past 12 months,
Speaker:what's really worked for you?
Speaker:Is it inbound?
Speaker:Is it out?
Speaker:So mainly partnerships with, uh, strategic partners that ring with
Speaker:them the same interest and, uh, and go to market capabilities.
Speaker:The main ones would be stock exchanges.
Speaker:Uh, we found interesting, um, synergy between us.
Speaker:And quite a lot of stock exchanges in the world.
Speaker:It started from NASDAQ and mainly, uh, London Stock Exchange Group
Speaker:that we are, uh, working quite a lot with them around D S G.
Speaker:And they, their turn basically, uh, we go to market, to the traded companies
Speaker:and traded companies are, most of the time they're like the top of the funnel
Speaker:in their jurisdiction and go from there.
Speaker:Right.
Speaker:And so sort of a viral model starting from, um, a, uh, like a single point,
Speaker:which has a lot of traction to.
Speaker:All right, so essentially you go to stock exchanges, you look at these
Speaker:traded companies, and then you start, start there and then sort of, you
Speaker:know, start conversations there.
Speaker:Is that what's been working for you?
Speaker:So a stock exchange has a supply chain.
Speaker:We provide them a solution to facing their supply chain.
Speaker:So they bring in their turn, let's say a hundred vendors, and each vendor
Speaker:will bring five of their vendors.
Speaker:So you are creating a network effect through that.
Speaker:And if you are long touch enough and you are efficient enough in your
Speaker:like initiating those uh, sequences, then you can scale exponentially.
Speaker:And this is what we're trying to.
Speaker:Sorry, and like talk about the sales cycle or, you know, the conversion aspect.
Speaker:Like you, you mentioned a lot about, uh, it being not touch.
Speaker:Is it really not?
Speaker:Or like, is it as simple as somebody discovering you and just
Speaker:getting started or does, do you have anything else happening there?
Speaker:So I would say that we are much closer to no touch than we would what we used to be.
Speaker:But basically it's a journey.
Speaker:Uh, it's uh, it's a long journey of, uh, understanding
Speaker:and automating those processes.
Speaker:Uh, I would say that, uh, we are about, uh, 60% no touch.
Speaker:The rest is low touch.
Speaker:Um, we, everything that we develop and do, we expose self customization capabilities.
Speaker:So we are getting more and more, uh, better and better in that.
Speaker:And, uh, um, I would say only five to 10% of our capacity nowadays
Speaker:is higher touch, mainly for the very large accounts that we.
Speaker:And talk about the sales cycle, right?
Speaker:It's like, how much time does it really take once somebody discuss
Speaker:your product and they'll realize that they've got to, you know, use it?
Speaker:What happens after that on an average, typically at this point of time?
Speaker:So it, it, we, we have a rather quick sales sales cycle, so it's important
Speaker:to remember that we are inbound based.
Speaker:So basically we are very low touch.
Speaker:So we start with providing them a, uh, premium account.
Speaker:They can play along with that with me.
Speaker:We are, uh, very good in exposing our value through tutorials
Speaker:and online, uh, capabilities.
Speaker:And when they are, uh, getting into a conversation with my sales team, it's like
Speaker:based on a rather better understanding of the product and its value.
Speaker:So we are focusing on the more, like what you really need, uh, from the product.
Speaker:So, uh, the sales cycle will be.
Speaker:Uh, faster.
Speaker:Definitely considering the fact that we are talking enterprise.
Speaker:So in my past, I would do enterprise sale that will take 12 months.
Speaker:Now we are, uh, doing like two months, three months.
Speaker:Uh, and, uh, then our uh, uh, focus is how do we provide you
Speaker:value through enabling you to.
Speaker:And execute on your supply chain and talk about retention right here.
Speaker:So essentially, so you wanna provide that continuous compliance
Speaker:monitoring on a regular basis, otherwise they'll just turn out.
Speaker:So how does the churn numbers look like today?
Speaker:Typically, because, It's, it's gonna be different in your space, right?
Speaker:So, you know, it's a, it is, uh, it's, uh, sounds like a cocking to
Speaker:say, but we almost have no churn.
Speaker:But, uh, I, I, it's not that it's not existed, but, uh, the value we
Speaker:are providing con, considering the.
Speaker:Um, the investment is such that it's worthwhile staying with us, and we
Speaker:invest a lot in developing, uh, further our automation and AI capabilities,
Speaker:so their life becoming more and more easier and more and more valuable.
Speaker:Uh, so it looks good on that end.
Speaker:Are, um, mainly we're trying to optimize on the way forward in terms
Speaker:of enabling you more capabilities and more vendors on the platform.
Speaker:Got it.
Speaker:And let's, let's talk about, you know, your team, right?
Speaker:How big at u is and like how many folks in your team as of today, and
Speaker:how many in engineering was this?
Speaker:How many in the GTM side?
Speaker:So we are currently about 30, uh, employees.
Speaker:Uh, we grew.
Speaker:Five times in the last year.
Speaker:Uh, so we've growing quite, uh, quickly, um, about 20 plus our r and d uh, uh, team
Speaker:and, uh, rest our business development, marketing and US operations mainly.
Speaker:Mm-hmm.
Speaker:Um, even though part of it of the team is in the US we are focusing
Speaker:on the US and Europe and apac.
Speaker:And, uh, but yeah, this is, this is this.
Speaker:And then have you raised any external funding so far to grow the company?
Speaker:Yeah, yeah, for sure.
Speaker:It's, uh, you cannot do 30 employees with that.
Speaker:Uh, yeah.
Speaker:Uh, without, uh, how much in total raise?
Speaker:Around 10 million.
Speaker:Got it.
Speaker:And like, yeah.
Speaker:One last question here, right.
Speaker:So what's the vision here?
Speaker:Right?
Speaker:Where do you see your company going in like next five years?
Speaker:So we are going to be the, um, the compliance marketplace.
Speaker:Uh, we are, we are creating something that I, uh, like to explain that
Speaker:with a combination of monday.com and Ariba combined for compliance.
Speaker:Basically, uh, we are going to be a sourcing point for compliance data.
Speaker:Uh, of, uh, supply chain engagement, we gonna be the larger, uh,
Speaker:and largest solution out there.
Speaker:I think maybe even the only solution out there, mainly because we are
Speaker:the only vendor in the market who is oriented towards this goal.
Speaker:Got it.
Speaker:Yeah.
Speaker:All Covid, thanks for taking the time to talk to me.
Speaker:Hope you scale your company to much, much greater heights.