CEO and co-founder of SEON Technologies, Tamar Kadar, sat down with the GetLatka team to discuss how the company he built while at university has quickly grown to complete 90m API calls in a single month. Kadar explained how he and his co-founder were inspired to build the fraud prevention solution after he himself was victimized by fraud and found there was no tool to help his situation adequately. Kadar shared how he tripled ARR in just 12 months, who’s making all those API calls, and why he’s planning on a significant Series B round of funding later this year.
Kadar launched SEON Technologies with his co-founder four years ago while at university. They built the technology from scratch, focusing on fraud prevention. The SEON Technologies solution is to verify identities through various available digital footprint data, starting from an email or phone number.
In its most recent round of Series A funding in 2021, the company raised $12m to expand internationally from their Budapest, Hungary headquarters. SEON Technologies boasts a growing list of major banks, Patreon, gambling sites, lending companies, and more. Their contract-free customers, 200 direct companies, and 4,500 companies that use the SaaS through payment gateways pay microfees for the API calls.
- Team of 140, with 70 engineers and 40 sales (20 with quotas)
- 200 direct clients, 4500 clients through 5 payment gateways
- Planning on $60-80m Series B this year, at $400-500m valuation (40X multiple)
90m API calls in December 2021
According to Kadar, SEON.io customers made 90m API calls in December 2021 alone. Each API call costs the SEON Technologies SaaS customer between $0.04 and $0.08. Kadar revealed that most of those API calls came from the B2B Saas company’s core 200 customers, not the 4,500 companies that use the API through one of 5 partner gateways.
5 Partner Gateways bring 4,500 customers
SEON Technologies has a relationship with 5 partner gateways that serve 4,500 third-party customers. Although they do not represent the lion’s share of the API calls, these partners and their customers are still an essential part of SEON Technologies’ business as it expands.
MRR triples from $300,000 to $900,000 in One Year
SEON.io’s rapid ascension came as MRR tripled in one year while the customer base doubled from 100 to 200 customers. Katar explained that their enterprise customers continue to increase the number of API calls as identity verification as a method of fraud prevention grows in importance.
$55,000 ACV from 200 direct customers
Kadar revealed that the customer base for the B2B SaaS currently delivers $55,000 in ACV based on the API call transactions. Its customer base is not under contract; they are charged monthly based on API transaction call volume. As they exceed $900,000 in MRR, Kadar sees them hitting $1m in MRR in the very near future.
Launched in 2018 with $500,000 Seed Money
Kadar explained that SEON Technologies received its first infusion of seed money in 2018 at launch. Since then, the company added another seed round of $1m in 2019 and finally a Series A funding round of $12m in 2021. The Budapest company is using the latest cash from the Serie A funding round to expand its international offices from its current headquarters in Budapest to London, Austin, Texas in the United States, and Jakarta.
Aiming for $400-500m Pre-Money Valuation in Series B with 40X multiple
As the company pushes for expansion this year, Kadar is eyeing $60-80m in Series B funding with a valuation in the $400-500m range, with a 40X multiple. Latka observed that lately, companies are getting funded at 20-80X multiples, so 40X appears to be in line with the market. Kadar believes that by reading the current market conditions, now is the time to push for continued international growth.
2 Months of Strong Growth Indicates Expansion
Kadar indicated that SEON Technologies is sitting on a year’s worth of cash but that all indicators are showing that he must push now to grow the market and expand. “We are in a good climate, a healthy market, with two strong months of revenue,” he said.
200% NDR Entices Investors
Kadar and Latka believe that SEON Technologies’ 200% NDR is a compelling figure that will likely draw investment attention. That net dollar retention results from a modest 5% gross revenue churn coupled with a 105% revenue expansion. “Clients don’t really leave; the only ones we have lost have gone out of business because of COVID,” explains Kadar.
Customer Incentive Commissions Drive Sales Team of 20 on Quota
Kadar explained that their new innovative commission model rewards their commissioned sales staff for increasing API calls from existing customers. Each works from an MDR base number, which is a 2% uplift per month. CSMs receive 2% commission for hitting the sales quota target and 5% on the amount over the target monthly for at least one year.
40 Person Sales Team Poised for Growth
SEON.io currently employs a sales team of 40, with half the sales staff on a quota. The team is equally split between SDRs, BDRs, AEs, and CSMs. The sales team currently represents nearly 30% of the organization’s 140 full-time employee workforce.
Kadar Retains Most Equity, Giving Investors 10-20% per Round
Although he has a co-founder, Kadar explained that he initially invested and bootstrapped the company, so his equity position remains higher than his co-founding partner, who acts as COO. Kadar is currently providing investors 10-20% equity per series funding round without dilution.
Fast Five with Tamar Kadar
Kadar, Co-Founder and CEO of SEON Technologies, says his favorite book is No Rules Rules: Netflix and the Culture of Reinvention by Reed Hastings and Erin Meyer. His favorite CEO to follow is Jeff Bezos of Amazon. Figma is his team’s favorite tool of choice. He currently sleeps 8 hours a night. He is 27, is unmarried but has a partner. At 20, a mere seven years ago, he wishes he had known about the importance of investing in a startup. But as he notes, “it’s a journey.”