Whelp is an omnichannel software solution that helps SMEs automate and consolidate their customer service using AI (artificial intelligence) and ML (machine learning). Using Whelp, SMEs can communicate efficiently with customers using voice mail messages, e-mail, live chat, SMS, and Whatsapp. Whelp CEO Seymur Rasulov sat down with Latka in September 2021 to talk about the company’s quick growth and its progress thus far.
- Whelp provides customer service in more than 100 languages, allowing SMEs to do business in other countries easily. The company’s goal is to close the gap between the languages.
- The company is currently raising $1 million based on a $10 million valuation.
- The team size is 32 – 25 engineers.
How Whelp Received Its First $500K from Investors
Whelp was initially founded in Baku, Azerbaijan, where Rasulov was born. Azerbaijan is a small country with a population of 10 million people and a former Soviet republic, Rasulov says. SaaS companies are a new concept in Azerbaijan and investors are unlikely to invest in what they cannot touch. “We went to several banks in Azerbaijan, but this was strange to them… The mindset is just different there,” says Rasulov.
Confident of their idea and determined, Rasulov, a University of Illinois Urbana-Champaign graduate, then took the company to the United States. He incorporated it as a C-Corp in Delaware and based its headquarters in New York. He and a co-founder bootstrapped the company for six months, and then they were able to raise capital from 500 Startups, Techstars, and other sponsoring firms. At the time the company raised its first $500K, its valuation was $3 million. Whelp also participated in Techstar Toronto’s Acceleration program, which provided access to a global environment and mentors and financial support for 13 weeks and access to the global environment.
ARPU is $200 Per Month With 300 Paying Customers
Whelp receives revenues from customers in several ways. One way is through off-premises customers paying a monthly fee. For example, the least expensive plan is the shared inbox for $30 a month. Customers also can add on WhatsApp and Twitter for an extra fee. They also may pay a cloud subscription fee. The average off-premises customer spends between $250 and $450 a month, Rasulov says.
Another way Whelp receives revenues is from doing on-premises installations, which are essential for financial institutions and insurance companies that require tight data security. The one-time fee for these installations is $45,000. These companies also pay about $2,500 to $4,500 each month on an ongoing basis for support. Another way the company receives revenue from customers is by invoicing by the conversation, for example, charging for each chatbot transaction or SMS contact. Whelp also offers customized plans based on customer needs.
The company has about 800 customers. Many of these are still in free trials; however, it has about 300 paying customers. About 20 percent of its paying customers are on-premises.
How ARR Soared from $144K in June 2020 to $710K in September 2021
The company grew its revenues through converting free trials into paid customers, content marketing, and its white label program with its partners. Initially, the company had seat-based pricing; however, it has recently changed to volume pricing. Customers convert to paid customers from free trials when they reach a volume of 10,000 messages. When they reach 10,000, they must upgrade to a paid plan or lose all the messages and history. “We have started converting a lot of free trials, Rasulov says.
In the white label program, Whelp’s partners pay Whelp $30 per user per month and are able to mark up the fee to their customers. Whelp is also focusing its marketing efforts around educational materials, content marketing, and webinars. It spends very little on paid advertising, according to Rasulov. In fact, the company has spent nothing on advertising in the past month; it may buy some advertisements when people return to their offices in the fall.
Whelp CAC of $80
Salespeople are encouraged to focus primarily on helping potential customers to find a solution rather than on achieving hard-and-fast quotas, says Rasulov. Each salesperson, however, brings in about $20,000 per month. Each lead costs the company about $8, and the company gets about 40 to 60 leads per six months. About 18 percent of them become paying customers, which makes the CAC about $80.
How Whelp Keeps Its Churn to Just 4% Annually Over Two Years
Whelp has experienced a gross churn rate of 4 percent annually over the past two years. The churn rate is low because the company provides considerable customization to its customers for no additional fee, says Rasulov. The company also is unique in its crowded industry sector for providing on-premises services, which is a key sales and retention factor. The service it gives its on-premises customers “extends the lifetime value,” he says.
Whelp Founders Each Own 40%
Rasulov and co-founder and CTO Enrike Nur started the company in 2018. Each of them still owns 40 percent of the company. Techstars owns 7 percent, and 500 Startups owns 6 percent. The remaining has been left unallocated for a future ESOP, Rasulov says.
Team of 32 Strong is Aiming for $4M ARR in 2022
The Whelp team consists of 32, 25 of which are engineers. The company has five sales and marketing staff members, and the two founders work directly in the business. The company is currently seeking $1 million in funding on its $10m valuation. It also is seeking additional partners.
Once it closes the $1 million funding round, Whelp is aiming for $4 million in ARR. “Many companies are growing really fast in this space. It’s exciting to be part of this $400 billion total market,” says Rasulov.
Going from $710K to $4 million is a big jump, but Whelp’s fast rise in revenues since its pivot in 2021 is a positive sign. Its progress — both at raising money and growing its revenue — will be interesting to watch.