Scaling to Over $10 Million From Delaware: Ye Zhang, CEO of Katabat (Part 4)

Sramana Mitra: Talk about the customer service value proposition. What is it that you do specifically that delivers on the customer service value proposition?

Ye Zhang: We are still focused on financial institutions. Financial institutions have a lot of legacy systems behind their firewall. There will be a lot of silo’d communication components. One for email, one for their website, and one for their app. All of those things are actually added.

Also we found that they don’t talk to each other very well. The value proposition of our customer service platform is that if you put your customer into our platform, all the channels will be managed by this same platform. That will improve your efficiency. More importantly, that will improve your customer experience.

Sramana Mitra: You are getting clients in that domain as well? 30% of your clients are in the customer service domain now.

Ye Zhang: Yes. We moved to the customer service side with the same client.

Sramana Mitra: Excellent. Can you talk about your financing strategy? You said you raised four rounds of financing. Can you talk about what were the various milestones with which you raised each round? What were the metrics and what were the milestones with which you raised each round?

Ye Zhang: I cannot remember the exact amount of each round, but I can talk about the reason behind each. For the first two rounds, the major focus was the development of the product. We wanted to make sure that we have features so that we can be attractive. If you look at our timelines starting from 2001, the recession happened, and collection became very hot.

All those compliance issues and government regulations were drivers for us. We made sure that our product could handle these requirements from the financial industry. The most recent two rounds were more focused around operational efficiency. We want to make sure that we expand our horizon to make sure that we were heard by different levels of market not only at the big banks but also at the middle banks with assets of less than $10 million. Then you have the internet lenders such as GreenSky. We want to make a mark in that market segment.

Sramana Mitra: Interesting. Where are you now metrics-wise? How much are you making? How many customers do you have? What does the TAM look like?

Ye Zhang: We have about 30 plus financial institutions who are using our software generating anywhere between $15 million to $20 million. We are diversified from the old days where we only do business with big banks. Nowadays, we have a lot of midsize banks and other lenders. The most recent push of our story is trying to make sure that we can manage all those channels and make sure channels generate even more output. That’s a very rewarding process. As you know, this domain, especially from artificial intelligence angle, is very hot. We are developing new features to satisfy that market.

Sramana Mitra: You’re doing this all out of Delaware?

Ye Zhang: Yes, we have three offices. One is in Delaware. We also have an office in London and Sydney. We’re pretty international right now.

Sramana Mitra: What is your revenue level right now?

Ye Zhang: We’re a privately held company, so I can’t tell you that, but we’re more than $10 million.

Sramana Mitra: Thank you for your time.

This segment is part 4 in the series : Scaling to Over $10 Million From Delaware: Ye Zhang, CEO of Katabat
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