Fresh off his $100m all-cash deal to buy Unbxd, Netcore Cloud founder Rajesh Jain met up with the GetLatka team to discuss the state of the iconic Indian marketing technology company.
Technology entrepreneur and dot com pioneer Jain chatted about the 25-year history of Netcore Cloud, revealed his future IPO plans, and introduced and defined for Latka his own founder term: proficorn.
- $95mm ARR
- Team of 750 at Netcore with 175 engineers
- Team of 150 at Unbxd with 60 engineers
OG in the Marketing Automation Space
According to Latka, Jain is the “OG in the marketing automation space,” thanks to Netcore Cloud’s 25-year history of martech success. Netcore Cloud’s B2C base pays for a full-stack automation platform offered in layers. “I will explain what we offer in US terms,” cited Jain:
- Low-end communication, like Twilio and SendGrid, with an API and campaign management
- Customer engagement for B2C like Braze
- Product experience like Pendo for B2C
- Search optimization like Dynamic Yield
1,000+ Martech Customers in Emerging Markets with US and European Expansion Plans
Founder Jain explained that Netcore Cloud predominantly serves eCommerce brands in India, Southeast Asia, and Africa. His martech automation products serve over 1,000 customers. Global expansion is Jain’s focus and has already begun as the company serves 140 US customers, 100 from Unbxd and 40 from Netcore Cloud. Altogether, Netcore Cloud serves over 5,000 customers from all combined business units.
$100m Cash Acquisition of Unbxd
Netcore Cloud recently acquired 90% of Unbxd for $100m cash. The other 10% will remain with the founders, who Jain called “a great team.” Jain clarified that the purchase price included buying out the investors who had already invested $14.5m in Unbxd, including a Series C at $12.5m. Jain noted that Unbxd is a great strategic addition to Netcore Cloud, as he sees a future of continued marketing vendor consolidation. ”It’s a great opportunity to work together. Their customers can get the rest of our stack, and we can take Unbxd to our customers.” He added, “Netcore brings capital, regions, and a fuller solution to their customers.”
$75m Run Rate Last Year, $85m + $10m Unbxd This Year
Netcore Cloud broke a $75m run rate last year and already topped $85m this year, according to Jain. Adding in the $10m run rate from Unbxd puts the total at $95m, with $100m in the near future.
Bootstrapped from 1998
Jain founded Netcore in 1998 after selling his first company for $100m. His first company, India World, was India’s first internet portal, serving Indians in India and the US. By 1995, Jain had created a family of internet portals which we were able to sell in November 1999. “I got a very good exit,” he shared.
$100m “Proficorns”
“What both my businesses have in common is that they are proficorns,” asserted Founder Jain. A puzzled Latka asked for clarity. “Both companies are profitable, private, promoter bootstrapped, and highly valuable, over $100m,” Jain proclaimed. A charmed Latka responded, “Proficorns. I’m going to use that!”
First $1m Run Rate in 2007
Netcore hit a run rate of $1m around 2007, according to Jain. The company 10X’d to $10m in 2015, then skyrocketed to $50m just three years later in 2018. Jain explained that much of the growth at that time was driven by their transactional, low-margin SMS business, which operates only in India.
2 Streams of Revenue
The transactional SMS business makes up one revenue stream, while the high-margin marketing automation platform represents the other. Jain reiterated that his current plan is to grow his martech platform in the US and Europe aggressively. “The challenge is that although India is large, the market is small.” The pioneering founder places the value of the email and martech market across India and Southeast Asia at $150-200m. “We have to grow outside of this market to grow,” he added.
18B Emails Per Month
Netcore Cloud currently serves 75% of the Indian email traffic and 50% of the Asian email traffic, for a total of 18B emails per month. “We are one of the few independent email companies left in the world,” noted Jain.
IPO in 12 Months with 25% to Employees, Targeting $150m in 2024,
With the addition of Unbxd, Jain is putting his 2024 target at $150m. Founder Jain also shared with Latka that he plans to do an IPO in “about 12 months.” He noted that his employees own 25% of the company and that this IPO will help them with wealth creation. Jain retains ownership of the other 75% of the company.
$1m Monthly Profit
Jain indicated that Netcore has been debt-free and profitable for 15 years. On $75m revenue, their profit margin is roughly 17-18%, generating about $1m in profit per month. The founder has consistently accrued the profits internally, which allowed them to make a cash offer to Unbxd of $100m.
No Concerns About Spending $100m Cash
Although $100m represented a significant amount of Jain’s cash, he has no concerns about the spend, noting that “Unbxd is a great asset. It allows us to tap public markets. We wanted a story of a global company,” He added that they’d tapped the emerging markets and now can add the US. Since he believes the future of marketing automation is consolidation, Jain is confident he can get cash for future consolidations as needed.
125% Net Revenue Retention with Innovations to Come
Netcore Cloud enjoys an NRR of $125%, based on a tiny 5% annual churn and 30% growth from existing customers. Jain expressed excitement about the future of Netcore Cloud, which he predicts will go on for 100 years after lasting 25 already. “We’ve got great innovations coming up, like bringing in AI for predictive segmentation. Including that will transform AI,” he asserted.
6-10X Valuation, With a Bonus for Profitability
While he wouldn’t predict a specific valuation for the upcoming IPO, Jain seemed comfortable with Latka’s estimate of a 6-10X multiple. “We should get a bonus for profitability,” Jain quipped.
Fast Five with Netcore Cloud Founder Rajesh Jain
Rajesh Jain’s favorite book is Beyond Entrepreneurship 2.0 by Jim Collins. His favorite CEOs to follow are those at Twilio and Salesforce. “Those CEOs know how to build a big SaaS company,” he marveled. His favorite online tools are Salesforce and Freshworks. Rajesh sleeps 6.5-7 hours per night. He’s been married for 29 years and has one 17-year-old child. He is 54. At 20, he wishes he had known the value of disciplines other than engineering. He realized the importance of liberal arts late in life, including psychology and even economics.
