Wunderkind is an all-in-one SaaS platform that builds products for marketers, especially those who are goal oriented on generating top-line revenue. Through wunderkind, marketing teams can build unique personal relationships and experiences with their customers at an unprecedented scale, working with the current and future channels that you own or operate in.
Nathan Latka sat down with Ryan Urban, CEO and Founder of Wunderkind to get his unique insights on the SaaS digital marketing space, and how it will be affected through their potential IPO in 2023. Key stats include:
- $140m in revenue in 2022 alone
- 16.67% YOY growth
- Raised $251.8m in funding
Nathan Latka (00:00):
Hey, folks. My guest today is Ryan Urban. He’s the CEO and founder of Wunderkind. He’s had an obsession with undeniable performance, and under Ryan’s leadership the company has been named one of the best places to work by both Crain’s New York and was ranked the number one fastest growing software company by the Inc. 500. Ryan, are you ready to take it to the top?
Wunderkind CEO Ryan Urban (00:18):
Let’s go. Let’s go, Nathan. What’s up?
Nathan Latka (00:19):
All right. Previously BounceX, and now Wunderkind. Next generation marketing.
Wunderkind CEO Ryan Urban (00:24):
Nathan Latka (00:24):
Tell me a little bit. I see the new hairdo, do you still have black toenails or no?
Wunderkind CEO Ryan Urban (00:33):
Oh, I’ve got the fingernails, everything. Now I got a little Batman for Halloween. Got a little viking stuff going on. Got a little Spiderman too.
Nathan Latka (00:38):
I love it.
Wunderkind CEO Ryan Urban (00:39):
Every two weeks, you’ve got to go fresh.
Nathan Latka (00:41):
This means you’re not going on an IPO road show anytime in the next three months, right?
Wunderkind CEO Ryan Urban (00:47):
The world’s come a long way. We did do a pre-IPO, a crossover fund process. I really wanted to introduce what Wunderkind does to a lot of the public company investors. Because at some point, it could be next year, it could be early ’23, whenever we feel it’s appropriate, we’re probably going to be a public company at some point and it’s something we’re looking forward to. Yeah, you can have your nails painted and do that and you’re not judged anymore and it’s awesome. It’s a great part of the conversation.
Wunderkind CEO Ryan Urban (01:21):
I didn’t have designs in the sides but this is Halloween, so now we’ve completed that process and now it’s time to have a little fun there too. Everyone’s pretty open. The world’s way more inclusive than it was three years ago. It’s pretty cool.
Nathan Latka (01:31):
Folks, you heard it here first. You can have your black toenails and your IPO too.
Wunderkind CEO Ryan Urban (01:35):
Also, I’m wearing a skirt too.
Nathan Latka (01:41):
I love it. Wait, what was the name of the thing that you said you did where you sort of just put feelers out there, let people know who you were? It’s called a what?
Wunderkind CEO Ryan Urban (01:47):
It’s a strategic finance process. Some companies need to fundraise, companies that lose a lot of money. For us, we’re doing great. We’re probably by the time this airs, maybe even 1000 people. We’ll probably be 800 people soon. This has been a great year for us. Our best year ever. I’m dialing in from the World Trade Center right now.
Nathan Latka (02:11):
I love these views.
Wunderkind CEO Ryan Urban (02:13):
Look at this. Yeah. I’m on the 75th floor right now. I’m in a blue rosé room. You can check it out.
Nathan Latka (02:18):
You negotiated a killer deal on this office space, I believe, right?
Wunderkind CEO Ryan Urban (02:22):
We did. We were planning this out about four years ago. We’ve been here about three years now. This is the most beautiful space, I think, in the world. They really wanted an anchor technology tenant that’s on their way up, and we came in. The whole building really came alive. We’re coming in, there’s really good energy, so it’s awesome. Maybe we’ll talk about how we’re leading the way on some of the Flexmont office stuff after. Yeah, things are going great.
Nathan Latka (02:51):
I’d love to chat more about that in a second. When you say fastest growing ever, what’d you guys grow at, revenue over the past 12 months?
Wunderkind CEO Ryan Urban (03:02):
I’ll take a step back. Last year was our best year in delivering, improving the value of product service. The revenue growth comes after your product service gets really good. For us, we sell revenue. A lot of software companies sell time savings and efficiency. Our software delivers revenue by improving experience, and we improved our regular offering so much our identification technology, we got that really up to a different level where we recognized nearly 50% of people. It’s awesome. We delivered an enterprise text platform last year and that boomed. If someone uses our full service, we can increase the business by 20%, and that’s a real number. It’s like within a year, we can increase almost any business within 20%.
Wunderkind CEO Ryan Urban (03:46):
So it’s pretty cool, and generally we’re doing, if someone has our core suite, in six months, we’re averaging 10% increase and we do that by scaling their personalization. So then you get some big growth will. Yeah I think like revenue wise, we have big scale. So we don’t like publicize our exact numbers. I know you do some inferring, but yeah, it’s going to be about a 50% revenue growth year for us. And that’s on a big base and that’s without deploying like a ton of strategic financing. So we’re not the company that’s raised $200 million dollar rounds and like hiring a million, like 300 foreign sales people and playing stuff. We’re earning it. Now it’s like half our customers come by word of mouth, for a enterprise software company that’s very rare. It’s almost half of Wunderkind people work here come also by referrals. So our clients referring us and our employees are Wunderkinds referring other people here. So those are the important numbers we like. So we’re at the 40 40 club, we’re going to be at the 50 50 club. And eventually all of our clients will be referred by the clients and all of our Wunderkinds will be referred by the Wunderkinds. So it’s really nice.
Wunderkind CEO Ryan Urban (04:51):
And honestly our product and service and our leadership team and our rev is we can be a public company right now. It’s like, I want to get a feel, like to be a public company, of course you want predictability and revenue. I want predictability on shipping value on operating velocity. So we have good operating velocity, but I want that innovation velocity.
Wunderkind CEO Ryan Urban (05:10):
I want predictability innovation velocity, and for me, I want to be shipping like 3-5% in revenue a quarter, and we’re getting close to that. So it’s like now we have offices in New York, Indianapolis. I have a hundred people, 110 people in Indianapolis now it’s awesome. It’s like having some geographic diversity, not only do you get like different kind of people. It’s really nice. You get access to different talent and people at the great office, people come to your company and know its successes, it’s just good energy. It’s good blood.
Wunderkind CEO Ryan Urban (05:37):
And London’s really building out, I’m opening an office in, expanding Austin now. I’m opening up in Paris early next year. I’m going to Ukraine in a few weeks and we have some people there. We’re going to do something nice there. Probably Quebec City, probably Miami. We were just on the phone with the mayor of Miami a couple weeks ago. So there’s a new mayor in New York now and like, we really want to really recruit a lot of technology comes to New York and we want to be the ambassador of that. It’s like, hey, come to New York it’s a cool place. So it’s just an energizing time. This is year nine for us. Like we’ve known each other for five or six years. You knew me when we were like doing like 20 million revenue.
Nathan Latka (06:12):
I remember those days, you hosted a great poker event a couple years ago, which I met a lot of cool people at that was a ton of fun, but you guys are growing. I mean, I know you don’t like talking about numbers, but you did put out publicly on February 26th last year saying the company broke a hundred million bucks in annual revenue and that’s when you rebranded to Wunderkind.
Wunderkind CEO Ryan Urban (06:31):
Up branded yep.
Nathan Latka (06:32):
Wunderkind CEO Ryan Urban (06:32):
Up branded. Not rebranded.
Nathan Latka (06:33):
Up branded. Okay, you’re rebranding the rebrand. So it’s up brand.
Wunderkind CEO Ryan Urban (06:37):
Well there are rebrands, an upbrand is like you really take your heritage and everything you are and where you’re going and bounce
Nathan Latka (06:42):
I get it. It’s a much better name. It’s a much better name and it matches your identity, but point being is early February last year, you guys broke a hundred million bucks in annual revenue. If you’re growing 50% year over year still, that’s a massive base. I mean, that puts you over 150 million bucks now in revenue is that right? Annualized.
Wunderkind CEO Ryan Urban (06:59):
You can infer that, we are a private company, but we’re definitely-
Nathan Latka (07:03):
Well Ryan, I don’t want to infer. So you just said you were going to grow 50% year over year on a big base and you publicized the base a year ago. So I don’t want to infer here.
Wunderkind CEO Ryan Urban (07:11):
Yeah. So you’re in the ballpark.
Nathan Latka (07:15):
And what is the revenue? So let’s talk about the product, right? Because you built a great product. You’re doing multi-channel marketing for three core areas. Tell us about those areas.
Wunderkind CEO Ryan Urban (07:22):
Yeah. I mean, I wouldn’t it call multi marketing. We have two customers. One customer brands and we work some of the best friends in the world, and some of our brands are commerce brands. Commerce brands means you’re doing transaction online. So sometimes it’s like eCommerce retailers, what we call commerce. So there’s no such thing as direct to consumer. It’s like, it’s just commerce. And the second kind of brands we work with are publishers. So, but one customer group is brands. Our other customer is people, consumers. So every product we build is like for the benefit of people, improving the shopping experience. So we build things like what are consumers like interacting with? And then we connect brands to consumers basically. That’s kind of what we do. I mean, everything we do is taking like what people call personalization and scaling that. Everything we do is generally one to one. It’s like, how do you create one-to-one experiences and scale those things. So we invent only one to one technologies.
Nathan Latka (08:15):
Specifically though, retailers, publishers, and travel. Right?
Wunderkind CEO Ryan Urban (08:20):
Yeah and it’s not only just retailers, it’s like anything commerce. So like say like some big cable companies and big cell phone manufacturers, so huge companies, they’re doing transactions online now and they’re doing billions. So now we’re working with a lot of companies in the big range, but you know what also we’re supporting companies doing even like 3 million online, so like now we’re starting to work with those companies too.
Wunderkind CEO Ryan Urban (08:43):
And going back to last year, like we made some big business decisions too, that were not short term revenue focused that were just client focused. Like you mentioned travel, we had some airlines and some things like their whole business was shut down, and we have a lot of companies that had a lot of retail stores and yes, their online business went up and then they shut down a few hundred retail stores and there were some businesses that really benefited, but like, we just did the right thing.
Wunderkind CEO Ryan Urban (09:07):
I was like, hey like we might need to pause some stuff, we might need to right price some people, we may need to give them a new product that drives more revenue. And we just created a menu like, hey like who needs support, and let’s forget what our contract says. Let’s support our clients. Let’s support the industry. Let’s put out the right content. Let’s just do the right thing to support the industry, and we would figure out how, didn’t matter the impact it was going to have on our business. We would do the right things for everybody, and then we did. And then basically once Q3 last year, like our business started really taking off because we did the right thing.
Nathan Latka (09:37):
And Ryan, if an advertiser puts call it 50 million or 10 million bucks through the Wunderkind platform, how do you count that as your revenue? Are you taking a cut of that or what?
Wunderkind CEO Ryan Urban (09:46):
Okay. So, I mean we have two kinds of revenue. One is just SaaS revenue. I mean, our flagship technology is our identity resolution technology. So for say a large name. I don’t know which clients I can name or not and I don’t want to go by cut, just name a large name, a large retailer.
Nathan Latka (10:06):
Wunderkind CEO Ryan Urban (10:07):
Target, cool. So Target, I think they’re a public company, I think they do 25 billion dollars a year in revenue online. It’s like 75% of the people who come to Target’s website, or their customers, and they have permission to email them, market to them. The problem is it’s like probably 2% or so, it’s definitely under 5%, of people on Target’s website are authenticating themselves and logging in. So Target can’t recognize their own customers. When you can’t recognize your own customers, like not only the kind of website experience, you kind of got to start over.
Nathan Latka (10:39):
Ryan, take us back though, before you go into the Target. So there’s two revenue streams, there’s a SaaS, and then what’s the other one?
Wunderkind CEO Ryan Urban (10:43):
And Wunderkind advertising, which I think will probably approach that itself next year, will approach-
Nathan Latka (10:50):
And Ryan that’s a percent of ads basically is how you make money there?
Wunderkind CEO Ryan Urban (10:54):
No. I’ll give you a 30 second one there. On the SaaS side, we really help brands recognize their customers and scale personalization. So like Target that example, most of their traffic is their customers, they can’t recognize anyone because people don’t create accounts and no one’s logging in when they’re browsing. So all their personalization efforts, say if they were a customer, which they will be at some point, we would just help them scale all their email personalization efforts, and by doing that, we’re usually take able to take revenue that people drive in personalization, especially personalized email from usually 1% of the revenue to 10% of the revenue. We’re usually able to grow email quarters by 50% by scaling personalization.
Nathan Latka (11:29):
Got it. Personalization makes sense, skip over to the ad side.
Wunderkind CEO Ryan Urban (11:33):
The ad side, Wunderkind advertising, we do advertising infrastructure. Our view in the world is that advertising should be content. It should be a vibe. Advertising should be enjoyable, and a magazine’s enjoyable, actually Instagram does a fantastic job of advertising being enjoyable. Even your agency and Amazon, their sponsor results via search, they’re pretty valuable. The advertising you see in Amazon’s really good. So we work with like half the pbulishing stores, Work with like the biggest ones, like the CNBC, the Weathers, the CNN, those kind of big publishers. And we really help them make advertising a vibe. So we actually add infrastructure, we create the units itself. So we do that. It’s like, let’s create these beautiful like kind of newsfeed style units, like a magazine style unit.
Nathan Latka (12:13):
Is there a flat fee service to do the creatives? And then you also take a percent of the –
Wunderkind CEO Ryan Urban (12:16):
No so we create the infrastructure and then we also we help, we work with agencies and the agencies actually buy our exclusive inventory through a private marketplace. So we not only facilitate the technology, we also facilitate the buyers. And it’s very premium brand advertising. So it’s advertising like it performs great for the brands, it performs great for the publisher, but the users enjoy it. It’s like users really enjoy interacting with these ads because when you get to a publisher, you usually get to an article. What do you want to do? You want to read the article, you don’t want to be-
Nathan Latka (12:47):
No makes sense. In 2021, how many ads will you process through the marketplace? Are we talking like billions of ad spend?
Wunderkind CEO Ryan Urban (12:55):
Yeah. So I think effectively ads and probably Facebook and Instagram are probably 30 or $40 CPM effectively. Ours are probably 10 or 12.
Nathan Latka (13:03):
How much volume will you process in 2021? Total volume?
Wunderkind CEO Ryan Urban (13:06):
I’d say it’s a lot.
Nathan Latka (13:11):
More than a billion Ryan?
Wunderkind CEO Ryan Urban (13:13):
Oh definitely. I’d say next year, we’d be getting closer to nine figures in revenue on that.
Nathan Latka (13:21):
But ignore your revenue. I’m just talking like total ad spend processed. I mean it’s north of a billion, is it north of 5 billion this year?
Wunderkind CEO Ryan Urban (13:28):
I don’t want to go to exact number, it’s internet scale. It’s a lot.
Nathan Latka (13:34):
So what do you take then if I put a billion through you, are you taking 1%, 2% or is it something different?
Wunderkind CEO Ryan Urban (13:39):
It’s not 1%, we’re facilitating everything. So instead of charging a technology view or CPM, like say Google, when you double click, they used to charge you a CPM and you sell your own ads. So we not only facilitate the technology, we also facilitate demand, and for everything we do, it depends on it like the publishers.
Nathan Latka (13:57):
So you’ll lock up inventory at $20 CPMs and bill it out at $30 CPMs or whatever margin you want.
Wunderkind CEO Ryan Urban (14:05):
We’re facilitating everything. We even do for the agencies-
Nathan Latka (14:08):
But Ryan, sorry. I just want to be very clear on this. Is that how you make money, you lock up inventory at a fixed CPM, you mark it up a little bit and you make the spread?
Wunderkind CEO Ryan Urban (14:16):
It’s not exactly that. So we create the ad units and we facilitate the demand, and then we help the agencies actually create the ad units, agencies will then go buy it, and then we take a cut of that. So the money comes to us and then we will get the publisher 50% plus, and we’re not securing inventory, it’s our inventory. We’re facilitating ad units, the demand, we’re doing everything. The publisher just gets a really nice ad experience and they collect money. So, and actually for publishers, there’s two parts. Like publishers, we have a SaaS business there where they pay us money that drive audience development, collect emails, try subscriptions. So they pay us and then if we have a lot of publishers where they pay us, and then we pay them. So sometimes two different departments. So it’s really cool.
Nathan Latka (14:59):
We’re running out of time here Ryan. So quickly, last 12 months, total revenue. What was the split between your ad business unit and the SaaS business unit?
Wunderkind CEO Ryan Urban (15:07):
I mean, they’re both growing. So they’re both growing.
Nathan Latka (15:10):
Yeah but what percent was SaaS?
Wunderkind CEO Ryan Urban (15:16):
Let’s see, percentage SaaS. I know you like to do math here. And the last 12 months is like, I always think the future 12 months, I’d say the future 12 months will probably be 40% advertising, but they’re both going to grow. I don’t look at it as a percentage appliance. both apply in the world. Ultimately, these are going to be both billion dollar revenue businesses.
Nathan Latka (15:35):
But what’s bigger right now in terms of your last 12 months of revenue, you made more money on SaaS?
Wunderkind CEO Ryan Urban (15:39):
It’s not more, they’re both. Yeah I mean, Wunderkind advertising has only been around for five years and our SaaS business has been around for nine, and it’s different, one works with publishers, one works with commerce companies, but we’re connecting the two.
Wunderkind CEO Ryan Urban (15:51):
Because Facebook and Instagram ads work really well, but they’re getting really expensive and every commerce company in the world will love ads that work in addition to Facebook and Instagram. So we’re taking that power and we’re building it to the rest of the internet. So I think we have advertising that’s even better than Facebook advertising. So that’s where we’re unleashing everywhere next year.
Nathan Latka (16:13):
Ryan, last question, you’ve chosen to go down the venture path. You raised 75 million to date. Your last round was 37 million in 2018. You haven’t raised since then. Anyone who knows what the venture path is like is going to look at that and say, that feels like a negative signal, if they’re growing as fast as Ryan is saying someone would’ve preempted their next round at a valuation Ryan couldn’t resist. Why haven’t you raised money since 2018?
Wunderkind CEO Ryan Urban (16:33):
Actually I mean the first four years, I funded it myself in the beginning and we have the co-founders. So the seed was fully funded by us, and then we took a very small a million and half dollar venture round in 2013 after we had a million in A&R. So we went the first five years on very very little venture money, and some of that 75 million, it’s a combination of equity and debt. So actually we put very little equity into the business.
Nathan Latka (16:55):
How much of the 75 million was debt?
Wunderkind CEO Ryan Urban (16:57):
I’d say it was about half and half. The debt, we’ve acquired five companies. So when you acquire companies, you don’t want to like sell equity. You you don’t want to dilute your company to acquire companies. So we’ve made some acquisitions including a major one last year, and they’ve worked out really well, acquiring great people. Sometimes technology people. And last year we did both. So like that’s really good for that I think. Especially because you know, there’s going to be a pretty good publishing machine that comes behind it. So you don’t want to just raise around to go do that. You might want to raise around to your growth and now we’re going to do a big one, but we deployed very-
Nathan Latka (17:28):
How much are you raising right now? What are you targeting?
Wunderkind CEO Ryan Urban (17:30):
For a company of our size, say well north of nine figures in software scale put it that way.
Nathan Latka (17:39):
So you’re raising right now, north of a hundred million dollar round, targeting that?
Wunderkind CEO Ryan Urban (17:43):
I would say raising around yeah. We’re doing strategic financing because we don’t need to, we’re good capitalized.
Nathan Latka (17:49):
Are you profitable?
Wunderkind CEO Ryan Urban (17:53):
Some quarters are the case. We actually did end up last year profitable. But this year, like we made a big R&D investment this year, and next year, it’s really about expanding, doing a lot of vertical and geographic expansion too. So you make those investments and they pay back very quickly.
Nathan Latka (18:07):
If you’re focused on raising nine figures right now, which would be like, basically your series seed. Do you have a valuation you’re targeting for that? I mean, can you get above a 1.5 billion valuation you think?
Wunderkind CEO Ryan Urban (18:16):
I think as a public company, privately it’s like less. As a public company you want something that’s like, kind of in line with public stuff, especially you want to look at your growth rate and I think we’ll have more than a 50% growth rate next year and maybe we would do 60 or 70 depending on what-
Nathan Latka (18:31):
What do you think you’d be valued at right now if you were public?
Wunderkind CEO Ryan Urban (18:36):
I think we’d probably be in the 8-10x next year’s forward rep maybe, and public and private is very different. So something like that. When we’re public, we’re public and that’s a good scoreboard. But I mean, the reason to go public is really just to attract talent that’s the main thing it’s like attract talent.
Nathan Latka (18:57):
So just to be clear though, because I don’t want to put out wrong information. You’re looking at raising a strategic round right now or not?
Wunderkind CEO Ryan Urban (19:04):
Oh we’re going to do that yeah. That’s where you look to get the right partner, if someone’s going to be investing in you, looking at five year time horizon before you’re a public company, say a year before that, you want someone who’s looking at five year time horizon, wants to invest in your IPO, wants to recruit other great investors. Like in our case, we’re enterprise so we want introductions to the CEO of Target, right? So we want to co-design products. We want to do a lot of really cool in-store products. So it’s like we want to do that. So you need to work at really senior levels of organizations.
Nathan Latka (19:35):
Guys there we have it, Ryan Urban, Wunderkind.co they passed a hundred million bucks in revenue last year.
Wunderkind CEO Ryan Urban (19:41):
You can do dot com. You could say.com. We’re going to flip that switch.
Nathan Latka (19:44):
Okay, dot com. Wunderkind.com. Guys they passed a million bucks in revenue, call it 12 months in the business. Raised 1.5 seed, they now still do over a hundred million bucks in revenue that was last year. Still now growing this year, 50% year over year, looking to do a strategic round now in the nine figures, we’ll see what happens. They’re supporting over a thousand customers, advertisers, publishers, retailers, e-commerce friends, you name it. They’re there. Ryan Urban thanks for taking us to the top.
Wunderkind CEO Ryan Urban (20:04):
Yeah and the only thing I never promote what my company does, but we are a great place to work. If you are in New York City, London, Indianapolis, or Austin, like go to wunderkind.co, check out careers. If you’re talented, that’s why I do this stuff. Also a lot of stuff will hire remote roles in the US, so check us out to squad up.
Nathan Latka (20:22):
We’ll link that in the show notes, squad up at wunderkind.co. Ryan, thanks for taking us to the top, man.