Helping SaaS Companies Grow Through Revenue Sharing: Avangate CEO Carl Theobald (Part 5)

Sramana: Let’s talk a bit more about how the company is being built. How do you build and scale from here?

Carl Theobald: The company had focused on the self-service market, which meant we had a very small direct sales organization. Once we realized the solution was acceptable for larger customers, as well as the need to scale into North American and Asia, we decided to raised funds. The company is based in the Netherlands, with development centers in Romania. There was no real penetration into North America and the founders realized they wanted some more experienced management.

The company was bootstrapped and hit profitability in 2010. At the beginning of 2011 they raised $5.5 million from a Cisco-backed fund called 3TS. They are a European fund focused on European growth startups. That was great because that is when I came on board, and I am very happy about that! I joined in early 2011 and we moved our corporate offices to Redwood Shores. I started bringing on additional management folks.

Sramana: How did this company find you?

Carl Theobald: It was through a recruiter. At that point we did a number of things. We expanded our sales capabilities by building a direct sales force that includes a good contingent of folks here in North America. Second, we focused our strategy more so on SaaS and cloud service subscriptions. That is a huge, growing market. We built out some services and support folks here in North America as well.

Sramana: What is the average deal size for a mid-market customer over one year?

Carl Theobald: We look at customers that are rough and tough. If they have 100K then they are mid-market for us. We see the self-service market below that.

Sramana: In terms of scaling sales and marketing, since you have come on board, are you doing $100,000 plus accounts via telesales?

Carl Theobald: We did create a telesales function as well as an outside function. We have a lower end of that where people come in through inside sales. Our bigger deals are done by outside guys. When I joined we had 60 people, and we are now at 140 people. We have been growing, in terms of revenue, at 70% per year. It has been a big success but also crazy in terms of scaling the business.

Sramana: Have you raised any other rounds, or just the $5.5 million?

Carl Theobald: That was the last equity investment although we did take a little bit of debt. We have no other equity investment.

This segment is part 5 in the series : Helping SaaS Companies Grow Through Revenue Sharing: Avangate CEO Carl Theobald
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