Building Significant Revenue with Inbound Marketing from Israel: Pepperi CEO Ofer Yourvexel (Part 5)

Sramana Mitra: Tell me more about the pricing. How did you price this?

Ofer Yourvexel: It was trial and error it the beginning. We started with one price and we simply said, “We’ll look at how much ERPs cost.” We looked at prices of roducts like ours that were not cloud-based. We made the price significantly higher than theirs. We found out that people were willing to pay more if you show them that you have something different. We are still priced higher than most of the competitors.

Sramana Mitra: Can you give me a benchmark of how much it could cost a company to buy your product?

Ofer Yourvexel: It’s modular. If you’re talking about a sales rep, it starts from $600 a year.

Sramana Mitra: For one user?

Ofer Yourvexel: Yes, one user per year. It can go up to around $1,200 depending on the functionality. Actually, it can start from $400 for an independent sales rep working by himself without integration to any back office. With integration to some back office, typically it can go up to $1,200.

Sramana Mitra: Let’s switch gears a little bit and talk about how you are financing the building of the company. You said in the beginning there were some investors who came to look for you at Amdocs and that’s how you got involved with the company. How much money had the company raised?

Ofer Yourvexel: I prefer to keep that confidential. Until now, it’s the same two investors.

Sramana Mitra: In an entrepreneur journey story, financing is a very important topic. You have to give me some material to discuss how this company was built from a financial standpoint.

Ofer Yourvexel: We raised over $10 million.

Sramana Mitra: Over the course of the story, when you came on board, how much money was in the company? How much had the company raised and how many rounds did you do?

Ofer Yourvexel: When I started, there was zero money in the company. They were living month by month.

Sramana Mitra: The investors had invested money that was out already.

Ofer Yourvexel: Every time the company ran out of money, they gave them on a monthly or quarterly basis. We didn’t have an engineering department and something was built through third-party for the pilot. When I signed the contract, it was all by handshake. They stood behind it. I had a feeling they would stand behind it because both of them are billionaires. They’re very successful people in their 70s. I had a feeling that I can trust them. It’s now over five years and they have never let me down.

Sramana Mitra: They had given money to the company at the very beginning. They kept the company alive. You came on board and they gave you a chunk of financing.

Ofer Yourvexel: They gave me a chunk of financing and I used that. The pivot is a critical time. During a pivot, the investors think they’re throwing their money because suddenly you’re changing directions. They had to make a decision to continue. It was like what you invested up till now is not relevant anymore. The management I have here is the same management from day one. I brought everyone from my personal connections. These were not people that I hired through agencies. It was all word-of-mouth. People were recommended to me.

I think they saw that the company delivered. The product was working. Our customers were happy. I’m talking about warranty as opposed to Pepperi. The only issue is that we didn’t believe that we can make it happen with the current situation. We showed them that the indications are so strong that we can be very successful in this new direction. They were willing to give it a shot for six months. In those six months, the growth was exponential. It has changed everything completely from what we’ve seen before. Everyone was very excited. From then on, it has been very easy to get the money again for the last three years.

This segment is part 5 in the series : Building Significant Revenue with Inbound Marketing from Israel: Pepperi CEO Ofer Yourvexel
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