Numbers

Addy Tulsian had spent years in corporate roles, including as a management consultant at Diamond Consultants (now PwC) and as a product manager, before leaving at age 34 in 2015 to start Numbers with his co-founder. A key reason he felt secure enough to quit was that his wife had already run a design agency for two and a half years, so there was steady money coming into the household.

The idea targeted a specific cash-flow problem. Small businesses such as graphic design studios invoice large corporations, which often take 60 to 90 days to pay. Numbers set out to help those businesses create invoices on a simple platform and then get advances on those invoices through partner financial institutions.

The team chose not to build software first. Instead, they helped customers obtain invoice discounting and working capital loans from partner finance institutions, which let them learn the process on the ground. Addy said that approach is why they earned their first revenue, bringing in about $5,000 in 2015.

Once the platform matured, it offered a free tier for young or simple businesses and a paid tier of 10,000 Indian rupees per year (about $175). Payment gateways were enabled, and a transaction fee of about 2% applied to payments processed on the platform. Average realized revenue per paying customer was later described as roughly $185 to $195 per year, and Addy said pricing had risen since the early months, when it had been set very low.

Numbers used three acquisition channels. The first was online marketing aimed at specific areas where target customers gathered. The second was accountants, who referred their clients to the platform because financial tools naturally draw in the accounting ecosystem. The third was partnerships with other platforms serving small businesses, which offered Numbers' products to their own customers. Addy estimated paid acquisition cost about $150 per customer.

By January 2017, the company had more than 5,500 small businesses on the platform, around 8,500 to 9,000 users, and about 1,200 paying customers. The host and Addy worked through the math together, and the confirmed SaaS figure was about $18,500 in monthly recurring revenue.

Churn was a real problem early on. In the first six months of 2016, the company lost close to 3% of its base each month. Retention improved, with about 85% of customers who signed up since August 2016 still on a plan by January 2017, which works out to roughly 2% to 3% monthly churn.

The company's revenue mix was also notable. Software subscriptions and financial-services commissions each made up about half of revenue, and the financing side benefited from large invoices that bypassed the payment gateways, so transaction fees did not capture their full value.

As of January 2017, Numbers had a team of 37 across New Delhi and Bangalore, had raised about $650,000 in equity, and was serving over 1,200 paying customers. Addy said he wished he had taken the leap at 20 rather than waiting until 34.