Bootstrapping to $80M ARR So much for a quiet start to the year. Any hopes of 2021 giving us respite from the turbulent waters of 2020 went splat, as the first week of the New Year was busy with venture capital deals (Divvy! Gtmhub!), IPO news (Affirm! Poshmark! Roblox!), SPAC news (SoFi! BuzzFeed!), and violence in the American capital. We'll get to all of that in a minute, minus the political stuff as I don't have the heart to scream again before the work week is over. Today we're starting with two growth stories, one from a company that is nearing IPO scale, and the other from a startup that is just getting its feet underneath it after a product launch. We'll start with Cloudinary, a media-focused software company that we covered in early 2020, when the bootstrapped company announced that it had reached $60 million in annual recurring revenue, or ARR. I caught up with the private upstart again this week to check in on what it was like to bootstrap through a pandemic. Cloudinary co-founder and CEO Itai Lahan told TechCrunch that his company has reached $80 million ARR, or 33% growth during a very busy year. Not bad, right? But according to Lahan, Cloudinary had targeted a number over $90 million for the year. So what happened? Well, Cloudinary intentionally decelerated a little bit. Lahan walked TechCrunch through how Cloudinary dealt with the COVID-19 pandemic, which had an impact on parts of its customer base. Lahan and the rest of the company decided to slow down, he said, reducing the pace at which it was hiring, among other initiatives. The goal was to get the company through the pandemic, switch to remote work with its culture intact, he said. The Exchange is looking for startups between $35 million and $60 million ARR that are growing quickly and are willing to share performance metrics. Email in if that's you. More on the project here. The gap between the company's $80 million ARR result and its original goal was a mix of COVID-19's commercial impact and the company's own choices, Lahan said. When's the last time I heard the CEO of a private technology company tell me that they were making conscious choices to slow their company down? I honestly don't remember. Lahan had reasons, however, that went past not having recently raised $100 million or whatever. Instead, the company decided to exchange short-term financial growth for what the CEO described variously as long-term growth or sustainable growth. Lahan said that if Cloudinary focuses on its customers and employees over short-term financial goals, it will grow more in the next half-decade than it will if it decided to sprint as fast as it could today. One example of the choice to go a little slower in 2020? The company has around 285 people today, under its original plan to have around 320. Wild, right? This is all possible because Lahan and his team at once don't have to answer to external investors with short, or medium-term time frames in mind for liquidity, and because Cloudinary makes secondary liquidity available to its workers, alleviating internal agitating for an IPO. Not that we would mind Cloudinary going public so we could dig into its numbers more deeply. It should cross $100 million ARR this year, so it's nearly time to start sending it regular, annoying emails. Now on to our smaller company: OnJuno! If Cloudinary is nearly ready to go public, OnJuno is getting ready to think about a Series A. So it's just a little bit younger. TechCrunch first spoke with OnJuno in December, right after it launched, trying to figure out why the world needed another neobank of sorts. According to co-founder Varun Deshpande, OnJuno is targeted at affluent individuals, while other neobanks have more traditionally targeted less-wealthy customers. OnJuno entices them with higher interest rates, and a focus on what Deshpande described as the more debit-focused Asian American community. How is it going? We checked back in with OnJuno, about three-and-a-half weeks after it launched. Per Deshpande, OnJuno expects to reach the $10 million assets under management (AUM) threshold shortly, with users bringing average deposits of $7,000 to $8,000. That's a multiple of some other neobanks, the startup said. The fintech upstart said that it expects to reach $100 million AUM in the next two to three quarters, adding that around 80% of its users come from traditional banks. Let's see how fast it can reach $25 million AUM, and if its deposit averages hold up. Now, venture rounds, IPOs news, and then — I am sorry — some SPAC news we need to discuss. |
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