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Kovai.co is a SaaS company. Saravana Kumar, Founder and CEO, Kovai.co talks to us about his work.
What % of your clients come from the MSMEs and from non-metro locations? Give separate figures?
Saravana Kumar – 30% of our customers come from MSMEs and amongst our 2000 plus customers around 20% come from non-metro cities across the world. Overall, 40% of our customers are from USA, 30% from Europe and the remaining 30% are spread our across the globe.
While our initial products—BizTalk360 and Serverless360—primarily catered to enterprise customers, our pure SaaS product Document360 caters to companies of all sizes including MSMEs.
What % of your revenue growth came from SaaS in 2021?
Saravana Kumar – We have a vast majority of SaaS customers and about 40% of growth account from this sector. We are also heavily investing resources in growing our SaaS products, because we believe that SaaS is all set to boom over the next decade. The SaaS market is currently growing by 18% each year, and there are reports that almost 99% of organizations using one or more SaaS solutions. 78% of small businesses across the world have already invested in one or more SaaS options, because it is cheaper, easier to use and work on & replace.
What was your revenue growth % in 2021?
Saravana Kumar – We had a good double-digit growth of 15%+ in 2021. In 2020, we had crossed an ARR of $10 million. For a SaaS company, especially if bootstrapped like us, revenues are extremely important for us to keep investing in acquiring new customers. New customers mean new additional revenue which in turns leads to growth. So our revenue growth is by not only acquiring new customers, but retaining our existing customers which is crucial in SaaS.
What are the most in demand SaaS solutions among the large enterprises and among the small businesses?
Saravana Kumar – I would say most large enterprises invest in customer relationship management (CRM) products and small businesses are almost always in need of project and team collaboration tools, especially because they may be dealing with a lot of part-timers, freelancers or staff working on remote basis. Many small businesses with teams as small as 50, have members often spread across four continents and people logging into work on a project at different timings. So a tool that smoothens the process will definitely help.
Customer relationship Management (CRM) products have become need of the hour, for other SaaS companies themselves, because acquiring new customers is our biggest expense. So, retaining an acquired customer is extremely important, otherwise you are unlikely to recover even the customer acquisition costs.
What are the challenges in your work? How do you resolve them?
Saravana Kumar – Our major challenges are handling people and acquiring new customers. Managing people is always challenging, because you need to get them to work in the same direction as you towards the vision of the company. Often crucial people leaving at the wrong times, can set you back temporarily. We resolve people challenges, by recognising good work, making work fun, and offering additional benefits—both monetary, recreational, and healthcare. Acquiring new customers is probably the biggest expense for a SaaS company. It is important we keep our customer acquisition costs as low as possible, so for this we do a lot of targeted marketing, spend on only channels where we have traction, developing and scaling partner channels.