All that work paid off this year when COVID-19 shook up the world, forcing companies to cancel business travel and instead lean on video conferencing solutions. Given the international nature of modern business — globalization is a fact, regardless of what nationalists want — the change in the world’s meeting landscape scooted demand toward Kudo.
Here’s how it works: Kudo provides a self-serve SaaS video conferencing solution, allowing any company to spin up meetings as they need. It also has a translator pool, and can supply humans to fill out a meeting’s needs if a customer wants. Or, customers can bring their own translators.
So, Kudo is SaaS with an optional services component, though given the lower margins inherent to services over software, I’d hazard that we should think of its services revenue as a helper to its SaaS incomes. There’s no need to fret about their impact on Kudo’s blended gross margins, in other words.
According to Zabetian, about three-quarters of its customers bring their own translators, while about a fourth hire them through Kudo’s cadre.
Growth
As noted, Kudo got into the market back in 2018, which means it was already selling its software in the pre-pandemic days. Lead investor Niki Pezeshki told TechCrunch that Kudo has “stepped up in a big way for its customers during the pandemic,” but that while COVID “has certainly accelerated Kudo’s growth, we think they are enabling a longer-term shift in the market by showing customers that it is possible to effectively run multilingual conferences and meetings without the hassle of international travel and all the planning that goes into it.”
Kudo was already right about where the world was going, then, even if the pandemic provided a boost.
That tailwind is evident in its round size, notably. Kudo’s CEO said that he set out to raise $2 million, not $6 million; the $4 million delta is indicative of a company that has become a competitive asset for the venture class to fight over.
And Kudo’s growth has brought with it notable financial benefits, including several months of cash flow positivity — something nearly unheard of amongst startups of its age and size. But the company will spend from its $6 million and push that line-item negative, it said. Kudo has 30 open positions today that it expects to fill in the next few quarters, including building out its sales and marketing functions, which to date it has not invested in (another good sign among startups is how long they can grow attractively without needing to spend heavily on sales and marketing). That won’t come cheap, in the short-term.
So that’s Kudo and its round. What we want to know next is its H1 2020 year-over-year revenue growth. Do write in if you know that number.
Contact Information:
Alex Wilhelm
Tags:
, Wire, United States, English
Contact Information:
Alex Wilhelm