Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta (Part 7)

Sramana Mitra: Internet marketing is your primary channel?

Rakesh Gupta: Yes.

Sramana Mitra: In terms of segments and where you found the most adoption, what segments are you seeing the maximum revenue from?

Rakesh Gupta: After that initial journey into financial services and insurance, what we are finding is that we have a very broad set of customers. Anybody who is a little savvy or who wants to be a little savvy about their sales and marketing is a potential customer for us. Now, we are not limited to any one or two verticals but we have a very broad base of customers. We are selling something that has a fairly wide application as I can’t imagine any business that doesn’t want to grow. We think around 5 million business owners will be a good prospect for us. That’s the market size we want to go after.

Sramana Mitra: As you’ve done that, what has been the financing strategy of the company?

Rakesh Gupta: We have financed internally. We have the wherewithal to do it. As we get to our fourth and fifth year mark, we are looking for potential partners. As an analogy to McDonald’s, we have the burgers, fries, and the drink. We have a value meal. Now, we have to sell by the billions. That’s what we need to do. We need a lot of advertising dollars to get the message out to hundreds and thousands of business owners and sales people.

Sramana Mitra: What has been the financing strategy of the company so far after the $500,000 that you raised in 2011?

Rakesh Gupta: All the next financing rounds have been done internally by the co-founders. The biggest of them has been Vin Gupta.

Sramana Mitra: What were the timeline of those?

Rakesh Gupta: As I said, we have spent around $15 million so far.

Sramana Mitra: You’ve raised money as you went along, so there’s never really been a financing round.

Rakesh Gupta: There has never been an external financing round. As I mentioned, we got the cash flow going. That funded a lot of portions. That’s one of the key learnings that we have had. Get the cash flow going because for a small business, cash is the air, water, and the food.

Sramana Mitra: How far along are you in terms of revenues?

Rakesh Gupta: We are well on our way to break even.

Sramana Mitra: How big a business is this? Is this a $10 million business? $100 million business?

Rakesh Gupta: It’s a less than $10 million business.

Sramana Mitra: It’s still a fairly small business.

Rakesh Gupta: Yes. I think we have all the foundations set for it to turn in to a large business.

Sramana Mitra: You’re somewhere between a $5 to $10 million business. You’ve already invested $15 million into the company.

Rakesh Gupta: Right.

Sramana Mitra: What else is interesting in the story?

Rakesh Gupta: We are using all the analytics to empower small businesses. That’s really what’s interesting about this. We are making it easier for small businesses to have the tools that are only available to large businesses. You couldn’t do analytics on your own customer base if you’re a small business. We are creating tools to do that for literally no cost. That is really what’s exciting – being that business that empowers other small businesses. Much like what you do. You are in the business of teaching budding entrepreneurs. Once they on their journey, we try to be a catalyst for them.

Sramana Mitra: It was nice talking to you. Thank you.

This segment is part 7 in the series : Building a Founding Team Financed Business from Omaha, Nebraska: InfoFree CEO Rakesh Gupta
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