After serial entrepreneur Rab Govil sold marketing production SaaS Nimblefish to RR Donnelly in 2010, he doubled down to serve the finance vertical by bootstrapping his next venture, Naehas. Launched in 2012, the “CX ERP” for financial institutions is on target to hit $40m ARR in 2023. Founder and CEO Govil revealed to the GetLatka team how his low volume, high-value GTM consistently delivers 20-25% YoY growth when he believes the time is right for secondary funding, and what pioneering titan’s playbook he follows to grow Naehas.
- $35m ARR in 2022
- Ongoing 20-25% YoY growth plus 20% EBITDA
- Multiple $1m customers, some over $10m ARR
- Team of 210
Sells offered personalization production in 2010, launched supporting infrastructure SaaS in 2012
Prior to Naehas, CEO Govil launched Nimblefish in 2004 to help companies deliver customized offers at scale via digital and direct mail marketing. After selling the company to RR Donnelley in 2010, Govil focused his new venture on landing page optimization. Then, he was approached by “one of the top 4 banks” that had a different execution in mind: deploying personalized offers at scale. With this directive, Govil built Naehas to expand the institution’s personalization potential from 800 offers to over 1,000.
Why customers pay $1m+ ARR
“When a bank wants to send you a new offer, they use our platform to create the product and pricing. The offer is approved, the supporting content is created, and the offer is delivered into a channel, all from our platform. Then, when customers take advantage of the offer, we confirm that they’ve met all the criteria before sending the offer.” After Latka asked Govil for an example, he explained, “Let’s say Bank of America wants to create a new offer, like if you open a checking account, they will give you $500 as long as you also move $10,000 into the account and connect to direct deposit. We do all that on our platform, including ensuring the customer fully complied to get the offer.” The CEO summarized, “We are like a customer experience ERP for financial institutions, with our system of records for offers, compliance, disclosures, and analytics. That’s why they pay us $1m+ per year.”
Broke $1m ARR in 2013
According to Govil, Naehas broke $1m ARR just one year after launch. Seven years later, they crossed the $10m ARR threshold. “We’ve grown consistently at 20-30 year-over-year,” the CEO shared, gleefully adding, “Until last year, we didn’t even have a sales force—our business was all word of mouth.” Today, Naehas boasts a small (10+) group of customers, but all pay over $1m per year, with some delivering the SaaS over $10m ARR.
Low volume, high-value GTM nearing $40m ARR in 2023
While Latka intimated that the TAM may be limited, “There are only 100 Fortune 100 companies,” Govil responded, “10B+ in assets is our current threshold; there are 100s of institutions, in fact, 1000 on a worldwide basis that fit our criteria.” The CEO added that if you pick the right business model and create the proper infrastructure, you will grow by getting more customers like your best customers.
Using the IBM playbook for 20%+ YoY growth
Latka’s question about Naehas’ impressive, consistent growth spurred the CEO to share the secret to his success: “There’s an old saying, ‘you never got fired for buying IBM.’ Today they’ve lost their way a bit, but the lesson still holds true,” explained Govil, continuing, “When you build trust in large enterprise and take care of them, you build such a strong relationship that they will come to you to solve more and more of their problems; if you solve a problem and they feel you are a true partner, they will come to you with more problems to solve.”
Bootstrapped founder puts 14% in ESOP
Govil describes Naehas as “basically bootstrapped” with a $2-3m seed round. “Investors own a small portion, around 15%,” the founder clarified. He added that the software companies he sold, like Nimblefish, allowed him to invest in other ideas that he found “super interesting.” He owns the majority stake in Naehas; investors own 15%, and the company ESOP covers 14%.
Secondary investment in Zenarate delivers 10-30X multiple
One of those other “super interesting” investments for Govil was Zenarate, an AI-powered agent coaching platform he co-founded with Brian Tuite in 2016. Govil explained that Tuite helped him with some work at Naehas but eventually wanted to run Zenarate. Govil still helps drive product strategy at Zenarate and supported a recent $15m round of funding. “Why do funding when you’re wealthy and secondary markets are compressed?” queried Latka. The CEO quickly retorted, “My skillset is zero to $10m. At that point, there are people with better expertise from $10m to $100m. It’s good to bring investors along to scale.” Govil added that Zenarate received a healthy multiple on the investment: “A good multiple B2B SaaS depends on growth rate. Double-digit multiples are reasonable if you’re growing 100% year over year.” The CEO confirmed that he remains the majority shareholder at Zenarate.
Adjusting quotas based on macroeconomic conditions
When asked about adjusting quotas today, Payne indicated that they would relook at quotas and territories in 2024: “Over the last 10 years, security budgets were growing 30-35%, but this year they only grew 5%.” He added that he feels good about their current plan.
Famous 5
Favorite Book: CEO and Founder Rab Govil is focused on books that help him with the art of hiring well.
CEO he’s following: “It’s got to be Peter Gassner at Veeva. $4m capital and an amazing story,” shared Govil.
Favorite online tool: Govil quickly chose Google as his favorite online tool.
Balance: 56-year-old Govil sleeps 7-8 per night. He’s married and a proud father of a daughter who “recently graduated from MIT and is working at a quant hedge fund in New York City.”
What does he wish he had known at 20? “I wish I had known that it’s never as good as it seems and never as bad as it seems. I always say that reality will assert itself, so acknowledge it early and learn to manage your emotions,” replied Govil thoughtfully.