Sramana: How much have you been able to accomplish with your new engineering team when it comes to maturing your product?
Varun Shoor: I personally believe the product is evolving. Our engineering practices can still use additional maturing although my teams believe we have evolved to a point where we are able to really leverage our Agile processes to provide innovative features. Despite that I hope to accomplish a lot more. Having a sound engineering practice in India can be difficult because the culture is so focused on the services aspect of business, not on product businesses.
Kayako is one of the more mature products in the market. Everyone is latching onto channels and service. Over the years we have had a product which allows an organization to handle inputs on many different channels. We have stable and efficient Live Chat support. We have great remote desktop support. We have some very large customers. We know competition is coming but we have out segment that we are very satisfied with.
Sramana: Do you offer a cloud-base product?
Varun Shoor: We have a SaaS product as well as an on premise solution. We are the only ones who have that solution that I know of. On-premise is still popular with big enterprises.
Sramana: What is the size distribution of your clients?
Varun Shoor: We have found that 1 out of 5 Fortune 500 companies use Kayako and 3 out of 8 Ivy League universities use Kayako. Today 50% of our clients have opted for our SaaS offering while the other 50% have opted for an on premise solution.
Sramana: What has your pricing evolution looked like?
Varun Shoor: Initially our on premise product had a flat $500 price tag and our SaaS offering was a flat $30 a month. We decided to switch to per-seat pricing in November of 2010. That was a pricing jump but it allowed us to expand our R&D and engineering teams. A month ago we released a new version of the product and the price is now based on a tiered per seat package, per product.
We have three products; Kayako Case which is an email management solution, Kayako Egnage which is a live chat solution, and Kayako Fusion which is a combination of the two and is our flagship product. A 5 seat license for Fusion starts at $2,000. A 5 seat license of Case starts at $1,500. That price includes 12 years of free support updates. For SaaS, Fusion costs $50 per seat, per month.
Sramana: What do you think your run rate will be for 2013?
Varun Shoor: I expect it to be in the range of $8 million to $12 million.
Sramana: Have you considered taking financing to scale your business?
Varun Shoor: We have been in constant contact with top tier VCs. Many of them have a limited presence of India. We have been at a point where our full attention is on growing Kayako for several years now, and we are a profitable company. We do plan on raising funding in the middle of next year to take our company to the next level. We want to expand the engineering team, polish our value messaging and expand our global reach. We believe that our next version of the product is going to revolutionize this industry.