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