Fresh off raising a $22m Series B funding round in March 2022, Hiver CTO and co-founder Nitesh Nandy sat down with the GetLatka team to discuss the Google Workspace help desk software’s post-funding growth plans. Since B2B SaaS Hiver’s launch in 2011, product and technology division leader Nandy has already overseen the scaling of the platform from one to over 1000 customers since launching in 2011.
Co-founder Nitesh Nandy is passionate about building products used and loved globally and now proudly proclaims that Hiver serves over 1700 customers worldwide. The help desk software integrates with the Google Workspace platform to allow teams to better manage customer queries through shared inboxes, workflows, and task management. The CTO shared with Latka how Hiver is using their Series B funding, their current CAC and payback period, and how they used a $4m debt round the year before the Series B to double MRR.
800,000 MRR
- Team of 120, 45 engineers, mainly from Bangalore
- 1700 customers globally
- 270,000 downloads to date
With Google Marketplace and the Chrome App store as their primary distribution channels, Hiver prospects have downloaded the product over a quarter of a million times to date and continue to do so at a rate of 300-400 per month. Co-founder Nandy explained how his team quickly shows prospects the value of the software to migrate them from the free to one of the paid tier levels. “It’s important to help them get their first win,” explained the CTO. The team helps onboard new prospects by showing them how to set up a shared mailbox and handle the first email by assigning it to an agent. Over time, the team onboards customers to more advanced features, gradually exposing them to more value.
SaaS plans from $15 to $59
Co-founder Nandy shared that the subscription plans run from $15 to $59 per user seat. He shared that the average company invests in 10-20 users, although Hiver serves many customers with over 100 users.
$500-$600 ARPU, with 5x growth from 2018
Latka recalled that Hiver’s other co-founder was interviewed in 2018. He shared that at the time, their ARPU was $115. Latka queried Nandy about whether that 5X increase was accurate and how they had grown it so much over the last 4 years. The CTO explained that it was intentional and that Hiver has invested heavily in product improvements by adding valuable features. Latka confirmed with Nandy that those decisions seem to have paid off, as they now serve over 1700 customers at an average of $500 per month for a total MRR of roughly $850,000.
$22m Series B earmarked for marketing
Latka queried the co-founder as to why Hiver raised capital because that company seems relatively independent. “We need to grow faster. It’s a big market with a huge opportunity for growth, so we have to act quickly,” explained Nandy. The CTO went on to explain that virtually the entire bulk of the Series B round from Kai Capital went to the balance sheet for marketing and sales. “We took a minimal amount, under $1m, as secondary for our small team,” Nandy revealed.
$180m pre-money valuation on Series B
Co-founder Nandy shared that they sold about 10% equity in the Series B funding round, which calculates to a $180m pre-money valuation and $200m post-money. Nandy shared that he thought the valuation was fair and that he’s happy to have Kae Capital as their investment partner, given the markets Hiver operates in. Latka added that they closed at the right time, given the market’s recent downward trend.
$1600 CAC for 3-month payback
Although Nandy revealed that their ad spend is mixed, he confirmed that Google Ads is whether most of their resources are targeted, estimating their CAC is about $1600. “We produce a lot of content. Blog posts, guest posts, and we get organic traffic from that,” explained CTO Nandy. Hiver’s two most important keywords they optimize for are “help desk for Google Workspace” and “help desk for Gmail”. With an ARPU of $500, their average payback period runs an acceptable 3 months. Nandy reiterated that Hiver needs more leads in the funnel, so their month-over-month CAC increases as their keywords’ bidding intensifies.
102% net dollar retention
Co-Founder Nandy estimated Hiver’s net dollar retention at 102%. “We have very low churn,” noted Nandy, who also explained that their team is focused on keeping paying customers engaged in the product. He added, “If we see customers dropping off in terms of engagement and activity, we get in touch so we can try to retain them.”
Benefits outnumber risks on solo platform
Latka queried Nandy about building his software on a single platform that he doesn’t control. “Yes, there are downsides to building on Gmail. We are limited to the vertical that Gmail allows us. But it also gives us the benefit of not reinventing the wheel, as we can build atop what’s already there,” responded the CTO.
$1.5m run rate explodes to $10m in 4 years
Co-founder Nandy discussed Hiver’s recent financial history with Latka, who recalled from his 2018 Hiver interview that the company’s run rate then was $1.5m. Co-founder Nandy explained that in 2018 Hiver did a Series A funding round of $4m that helped them scale past $5m in ARR. Then they did a $4m debt round last year. When Latka asked why, Nandy responded, “We wanted money to do some experiments before doing a full Series B round. It worked out very well, as we wanted to try some marketing funnel things.”
Interest rate under 10%
Without revealing exact figures, Nandy indicated that he felt the terms on the $4m debt were fair for everyone. “We got charged only for the pool of money that we used,” explained the CTO, adding that the interest rate was under 10%.
2X MRR from $400,000 to $800,000 in 12 months
Hiver doubled its MRR in a year from $400,000 to $800,000, according to the co-founder. He added that the growth came from a healthy combination of existing and new customers.
Famous Five
Hiver CTO and co-founder Nitesh Nandy shared that the latest book he’s reading is The Soul of Money by Lynne Twist. “It talks about the purpose of money and how you should think about it for growth,” shared Nitesh. Following CEOs isn’t his style, so Nitesh moved on to question three. He chose Retool as his favorite tool for building Hiver. Nitesh gets 6-7 hours of sleep per night. He’s 38, married with no kids. At 20, Nitesh wishes he had known that it was OK to fail. “I was too scared to fail. I should have experimented more,” lamented Nitesh.
