“It was our last pre-IPO round” — Interview with Oleg Rogynskyy, founder of new Ukrainian unicorn — People.ai
People.ai has recentry achived unicorn status. On August 11, the company announced the $100 million D round at a valuation of $1.1 billion.
During the pandemic, People.ai doubled in headcount and turnover, though back in April 2020, it was making cuts and raising a debt round to secure its future amid global uncertainty.
AIN.UA’s editor had a talk with the founder and CEO of People.ai, Oleg Rogynskyy, about how his technology won such clients like Zoom, its further growth, and plans regarding the initial public offering.
About the new round
This round wasn’t actually on our list of plans because we still have a lot of money in our bank account. Akkadian Ventures came to us with an offer in May. Then, Mubadala Investment came to us in June. So they agreed and performed the round together.
We spent the whole of June legalizing and finishing this round. Now we made an announcement. But in fact, it took us only three weeks.
And likely, it was our last pre-IPO round. Maybe we will organize another one, but there is a chance that we won’t. Thinking about the public offering, you need two things: the CFO who has experience in IPOs and investors who have unlimited funds. People who already purchased our stocks should continue to buy them after our IPO to solidify the share stability in the market. Why did we choose Mubadala?
Mubadala is the largest VC firm in the world. Its venture portfolio is equal to $260 billion what is 2.5 times more than in the case of Soft Bank. Its total investment portfolio hits $2 trillion. Therefore, it is the most desired company to get funding during the initial public offering.
They have purchased a large share of Uber and Tesla. Do you remember as Elon Musk said that he would like to convert the company back into private at $420? The rumors say it was because of Mubadala. They wanted to acquire the whole of Tesla.
What’s most important to us at Akkadian is the man who runs it, Mike Dinsdale. He’s one of the most famous CFOs in the Valley for taking companies public. He brought Docusign to IPO for $60 billion, Doordash — for $32, and now he’s bringing Gusto for $10 billion.
Two perfect investors. So, without thinking long, we agreed.
About development and the IPO
The number of employees is big enough — up to 250 — to think about the IPO. If we continue with the same tempo, it will be up to 1,000 in 2-3 years. And the IPO usually takes two years.
We need not only investors but also results. We need to grow every day. Now we are up to finish this media story and will continue doing business: developing the product, hiring new employees, especially in Ukraine, and cooperating with new clients. And after the end of the pandemic, we’ll continue to expand in Europe.
We are currently working in the US and the European market. But because of the pandemic a year and a half ago, we halted plans to open new offices in Europe. We are now resuming them.
The company has offices in San Francisco, Kyiv, Toronto, and Prague. Also, we are planning to open an office in London. We are not going to open more offices in Ukraine so far. Currently, we have about 40 people in Kyiv and another 20 Ukrainians in San Francisco and Toronto.
About growth during the pandemic and cooperation with Zoom
We are hiring. During the last 12 months, our personnel has doubled from 120 to 240 employees. Because of COVID-19, we did not know what would happen [Editor’s note: in April 2020, People.ai fired 18% of employees to help themselves face challenges they could face in the future]. But after three months, we understood that our clients started to grow very fast. We focused on them and their e-sales — and it worked. Other customers also learned e-commerce until the end of 2020. And our product proved itself as the most effective tool in that situation.
In the past, the employees used to work in the office, and a manager could come to them, explain, and give some advice on how to proceed. But if all work from home, how will you coach your employees then? Our product allows managers to get more information remotely than during office work and explain in real time how to increase their productivity under new circumstances.
It was a great surprise for us that the pandemic could speed up our growth so much. When we’ve got it, we started to invest in specific areas of the product and its proper marketing. That’s how we achieved a growth of 260% for the last 12 months. Now we have over 200 large corporate customers.
We started to work with Zoom before the pandemic exploded and helped them increase the efficiency per seller by 42%. When they saw results, they deployed People.ai for all of their sellers, and during the pandemic, the growth increasingly continued. Thanks to that cooperation, we doubled our revenue just during the last 12 months.
About a free version and the goal of People.ai
We launched a free product called PeopleGlass: anyone who possesses Salesforce can download it, and it’s as easy to work with Salesforce as simple as in an Excel spreadsheet. It is our bestseller. Many free users become then our loyal paid customers. By doing so, we also increase our growth. PeopleGlass is very user-friendly, but it works manually, and People.ai Foundation provides you with a lot of AI-driven analytics.
People.ai allows sales teams to increase their productivity. We have built a Smart Data platform that collects all the data about the sales manager activity from the calendar, email, Zoom, and other tools they used by working. Then we use that data to automate all manual work like data entry into CRM. We also use artificial intelligence to search the data to discover why the best sales managers are the best. We give managers recommendations on how to coach the whole team based on that data. It is depersonalized data, so they don’t violate privacy policy.
We work with sales, marketing, customer success, customer support, and service departments — we can cover all the functions related to customer care. It’s a large market, and People.ai has not covered even 5% yet; there is incredible potential to grow. Our investors assess the Revenue Intelligence market volume as $20 to 40 billion.
About competition and advantages
Yes, some companies are helping increase the sales manager’s productivity. But they do it applying totally different methods. For example, they record phone calls, transcript them, and inform a client what sentences were misspelled by a worker. In general, they compete with budgets, not with different technologies.
If a company with 100 sales managers earns $100 million a year, and we increase the productivity of each worker by 42%, like in the case of Zoom, we increase its revenue by $42 million within only a year! Nobody can do it as we do.
It’s difficult not to find insights — it’s difficult to collect data hidden beyond the client’s firewall and within their services. We needed to create a commercial approach to interest the clients in transferring their data to us for analysis. The AI is cool, but we also require access to the data to collect it from hundreds of sources and convert it into one dataset. And it’s very hard. Data security and connected risks for the companies are barriers to the way of the business we have. We have passed many certifications. Our security team is very strong. We spent years to win the trust of our clients, and now the clients like Zoom can use our product without a doubt.
Our technologies are protected with American patents: 49 patents are already issued, and 42 more are in progress now. They protect us while we collect and merge data, analyze and filter it, and make recommendations to clients. That’s why there is no other company that does what we do — it would be illegal in the US. It is the most important thing for us because 90% of worldwide customers reside in the United States.