Building a Venture Scale FinTech SaaS Startup: Mike Whitmire, co-founder and CEO of FloQast (Part 3)

Sramana Mitra: And how long did that $6.5 million last?

Mike Whitmire: We did extremely well in 2016 and the first half of 2017. We more than tripled our recurring revenue. Then we were approached proactively about raising another round. The investor was great, the terms were strong, and I was ready to scale further. We fielded a few term sheets, found the right partner, and raised our Series B—$25 million led by Insight.

That was in the second half of 2017. The funding helped us scale all key functions: product, engineering, customer success, and go-to-market.

Sramana Mitra: I presume at this point, once you raised Series B, it’s about building out repeatability. You have repeatability, and you’re scaling against that repeatability hypothesis or a proof of the repeatability hypothesis.

Mike Whitmire: It’s twofold: scaling the repeatable part of the business and having capital available to build out new parts of the business.

One lesson I learned at Cornerstone was that we built a great core product that landed well, but we never found the second, third, or fourth product line to expand our market. I’ve been ambitious from the beginning. I joined a pre-IPO company because I wanted to go through that from the founder side of the table.

If you’re going to build a big company, you have to go big and do the repeatable stuff. Mid-market became repeatable for us, and it became more about investing in going upmarket and developing that side of the business.

On the product side, it’s about how we scale upmarket to handle enterprise with our core application, and also how we build out more products to become more of a platform story.

As a founder, it’s my job to always be increasing our TAM (Total Addressable Market). You increase TAM not by predictability and scalability within a market you already understand, but by investing in new markets.

Sramana Mitra: That’s cross-sell. What was the average deal size early on, and how did it increase as you added new functionality elements?

Mike Whitmire: Looking back, the deal sizes were extremely low. When I raised our Series A, part of why it was so hard was that I was out in the market saying our ACV was about $8,000 a year. It was tough and not a compelling story.

As we’ve gone upmarket and built more products, that number has increased significantly. We track ACV through two lenses: the ACV of new customers and the ACV of our install base. Are they buying more products? Are they expanding?

At this point, both are about the same. We’ve more than quadrupled that number over the years. It’s now a much healthier and more investable amount for investors.

Sramana Mitra: And it’s multi-year deals?

Mike Whitmire: Yes, we sign anywhere from one- to three-year contracts. About 40% of our deals are multi-year, with the rest in the one- or two-year range.

Sramana Mitra: So, the band is $30,000 to $220,000 per year for contracts?

Mike Whitmire: The band is much wider than that these days. We work with some of the biggest companies in the world. We don’t necessarily market them, but we have accounts paying well into the nine, sorry, seven figures. I wish it were nine figures.

This segment is part 3 in the series : Building a Venture Scale FinTech SaaS Startup: Mike Whitmire, co-founder and CEO of FloQast
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