Cyera's Hypergrowth, Cake's Cap Table Push, and ServiceTitan's Stellar IPO | E2060

This Week in Startups is brought to you by… LinkedIn Jobs. A business is only as strong as its people, and every hire matters. Go to https://www.linkedin.com/twist to post your first job for free. Terms and conditions apply. Washington Post. Stay informed with trusted journalism from The Washington Post. Right now, TWiST listeners can subscribe for just 50 cents per week for your first year at https://www.washingtonpost.com/twist Beehiiv. Power your newsletters with AI tools, referral programs, and ad network features—all in one platform. Get 30 days free and 20% off your first 3 months at https://www.beehiiv.com/twist * Todays show: Alex Wilhelm kicks off the show with Cyera's Yotam Segev to dive into the state of enterprise data security. They discuss Cyera's impressive feat of raising $300 million just quarters after its previous mega-round and explore the company's recent nine-figure acquisition of Trail Security. Next, Alex unpacks ServiceTitan's successful IPO and Broadcom's milestone achievement of reaching a $1 trillion market cap. To close, Cake Equity's Kim Hansen joins the conversation to share insights into his company's growth strategy and how it's thriving in a highly competitive market. * Timestamps: (0:00) Alex kicks off the show (2:12) Cyera's Yotam Seveg joins the show (10:05) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist (11:34) Evolution from information security to cybersecurity and automated data categorization (20:44) Cyera's acquisition strategy and impact on the company (28:00) Washington Post - TWiST listeners can subscribe for just 50 cents per week for your first year at https://www.washingtonpost.com/twist (29:10) AI's impact on data security and competition in the cybersecurity market (34:19) ServiceTitan IPO, market reaction, and implications for the industry (37:34) Beehiiv - Get 30 days free and 20% off your first 3 months at ⁠https://www.beehiiv.com/twist (39:05) Tech companies reaching significant market caps and IPO performances (47:17) Texas attorney general's lawsuit against tech companies over data practices (48:21) Cake Equity's Kim Hansen joins the show (49:02) Cake Equity's mission, platform, and cap table management software demo (54:29) Cake Equity's user interface, employee engagement, and expansion plans (58:22) Automation in onboarding and international growth challenges for Cake Equity * Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com * Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp * Mentioned on the show: https://www.cyera.io https://www.cakeequity.com * Follow Yotam: LinkedIn: https://www.linkedin.com/in/yotam-segev * Follow Kim: X: https://x.com/KimHansenYeah LinkedIn: https://www.linkedin.com/in/kimhansencake * Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm * Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis * Thank you to our partners: (10:05) LinkedIn Jobs - Post your first job for free at https://www.linkedin.com/twist (28:00) Washington Post - TWiST listeners can subscribe for just 50 cents per week for your first year at https://www.washingtonpost.com/twist (37:34) Beehiiv - Get 30 days free and 20% off your first 3 months at ⁠https://www.beehiiv.com/twist * Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland * Check out Jason's suite of newsletters: https://substack.com/@calacanis * Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com * Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Hello and welcome back to This Week in Startups. My name is Alex. I am one of your two co-hosts here at the show. Today, my co-host, Jason Calacanis, is under the weather and therefore unable to attend and chat with us. But don't worry, it's not going to be a whole hour of me just talking to you. Instead, we have some absolutely amazing guests today, including one from Twist 500 company, Syera, and recently 3X Unicorn. And we're going to hear from the founder of Cake Equity, along with a number of major news hits, including the Service Titan IPO. And we're going to dig into other critical news stories from today.

• 0:35Speaker 01

  This Week in Startups is brought to you by LinkedIn Jobs. A business is only as strong as its people, and every hire matters. Go to LinkedIn.com/Twist to post your first job for free. Terms and conditions apply. Washington Post. Stay informed with trusted journalism from the Washington Post. Right now, Twist listeners can subscribe for just 50 cents per week for your first year at washingtonpost.com/Twist. And Beehive. Power your newsletters with AI tools, referral programs, and ad network features, all in one platform. Get 30 days free and 20% off your first three months at beehiiv.com/Twist.

• 1:16Speaker 00

  To begin, I have a little bit of a treat for you. I have an amuse-bouche to the show, if you will. And it is the following video clip that I think details all the progress we have seen in self-driving, crossed with, well, the fact that there's still a little bit more work to do. Now, if you're listening to this on the audio version, what you're not seeing, but you can find over on the internet, is a Waymo car, completely kitted out in all of its AV technology, going around a traffic roundabout and not stopping. It's essentially like what happens when an American sees one of these for the first time and has no idea how to get off, but because it's a robot driver, well, it just kept going around and around and around and around again.

• 1:55Speaker 00

  Now, Waymo does say that there wasn't a passenger in the car, so no one got stuck on this really terrible flat roller coaster. And they've already put out a software patch, so great work by Waymo, but I have to say, not a great look for a company that's currently trying to expand all across the United States. Now, to begin today, we are going to have a company back on the show that I talked to a couple of months back. The company is Cyera, C-Y-E-R-A. And last time we talked to the company, I hung out with co-founder and CTO Tamar because I wanted to learn more about the company, its growth and its fundraising. Since then, it has bought another company for $162 million and raised $300 million more. So please welcome the other co-founder of Sayara, it's Yo Tom Segar. Yo Tom, hey, how you doing?

• 2:39Speaker 02

  Hey, Alex, great to be here. I used to do those roundabouts for fun, just to stand around about when we were 16, but now it's happening with AI.

• 2:50Speaker 00

  Funny that you mentioned that going around roundabouts was actually about two thirds of the entertainment in my hometown, given that there was nothing else going on whatsoever. So I'm actually with you on that, although back then-

• 3:01Speaker 02

  Sounds like we had the same childhood experience.

• 3:04Speaker 00

  Well, I mean, when we were growing up, not to get off topic here, but like there wasn't TikTok. Netflix was a DVD mail service. Online gaming didn't really exist in the way that it does today. We actually had to go outside and do things. So traffic circles were kind of like the TikTok of our day, I think.

• 3:21Speaker 02

  And we still had a social phenomenon that has since gone extinct called boredom. People were just bored.

• 3:28Speaker 00

  Yes. Actually, I've heard, and this might be a little bit of a tangent, but I've heard that some people in Gen Z and Gen Alpha are going out on walks and they had this new philosophy. They go out on walks without headphones in. They just walk. And I, I, yeah, you can do that, turns out. I didn't know that was something we had to reinvent, but yeah, going outside everybody, very good for you. Anyways, Yo Tom, how are you? I hear you have another kid on the way.

• 3:59Speaker 02

  Yes, yes, I do.

• 4:01Speaker 00

  Well, I'm glad that you're gonna have two like myself because it means you'll have plenty of time to work more on what you're building. So why is your company back on the show? So last time I had your co-founder on, we were talking about the $300 million, I think it was a series C, valued the company at about 1.4 billion. Since then, however, you guys have gone back to the fundraising well and raised another $300 million in a series D. This just over doubled the valuation to about $3 billion. Million dollars. So to start, why did the company go back and raise so much money so quickly again?

• 4:36Speaker 02

  So first of all, you know, the the timing was more of a preemptive a situation where our insiders, Excel, essentially put a very, very, very compelling offer in front of us and made it very easy for us to raise more money and continue to accelerate the company. This was after we executed on the acquisition of Trail, so it came in a very good timing. And I think a company like us needs a significant waters to be able to continue to accelerate into the market and to consider all of the opportunities to grow our platform organically and inorganically. So we were very happy about that situation.

• 5:19Speaker 02

  But again, I think fundraising has never been a focus for us. We focus on the customers and we focus on the product. And if we do that well enough, then the fundraising doesn't doesn't present as much of a challenge.

• 5:34Speaker 00

  Yes, but isn't not every startup has major blue chip investors coming at them with preemptive term sheets six months or so after they raised their last nine-figure rack. So I mean, I agree that it's great to focus on customers and let the fundraising just happen, but come on, Joe Tom, that is a relatively rare position to be in. I mean, not every startup has that luxury, I suppose.

• 5:57Speaker 02

  Yeah, I I agree with you in a very privileged situation where the traction in the market and the total addressable market of our space and the strength of our opportunity to to go and build a legendary company in that space is is making it easier easier than for most.

• 6:16Speaker 00

  So let's start there. So I know that people are probably have heard of Cyera, but I do think it's good to talk about what you guys do in more detail. So the company today, after the acquisition of Trail Security, and we'll get to that in a second. It started off doing data security posture management or DSPM. And the way that I think about this is it helps a company figure out what data it has, where it exists, and then also who can access it. Is that fair?

• 6:42Speaker 02

  That's more than fair. We have many roles open in sales. If you're looking for a side gig or for something to for a little bit of a different experience, that could work could work very well.

• 6:53Speaker 00

  I don't think that I would be the world's best salesperson because I would be like, you get a discount, you get a discount, everybody gets a discount. Um, I do want to say though, one thing that you guys do as part of your DSPM product is use machine intelligence to actually go and help companies categorize their data. Can you break down for me a little bit how that works?

• 7:11Speaker 02

  Yeah, absolutely. So in Cyera today, we're looking at becoming that data security company, that data security platform for enterprises. You look at the security space, there's all sorts of assets that need to be protected. You've got CrowdStrike that are the masters of the endpoint, you've got Palo Alto Networks that are the master of the network. And you, you don't really have a hyper growth innovative company that's really focused on the data. That weird intangible asset that all of us are creating so much of and collecting in so many different places today across the cloud, on premise endpoints and even third parties.

• 7:52Speaker 02

  So that's the asset that we're focused on as a company and that's the part of the security stack that we're trying to consolidate and simplify for our customers and make into a very, very effective higher ROI program.

• 8:04Speaker 00

  Okay, actually stopping there, thinking about the way you phrase this, so essentially CrowdStrike endpoints, that means devices at the edge. When we think about Palo Alto Networks, they're actually securing the pipes that move data around. Firewalls keep people outside of your network and then inside of your secure area, if you will, there's a bucket of data and that's where Cyera currently plays.

• 8:29Speaker 02

  Yes, except that inside, when you look at the world today with cloud and with third parties, it's not exactly in one place, right? So when we look at enterprises today, we've got customers that have us connected to more than 10 different environments. Because they have AWS and Azure and GCP and Snowflake and Databricks and MongoDB and Office 365 SharePoint and Box and Salesforce and Google Drive.

• 8:57Speaker 00

  Other than that, it's not very complex at all.

• 8:59Speaker 02

  No, no, it's a very simple problem to deal with, right? Like, and they have their endpoints as well, which also have data on them because people still download spreadsheets to their laptop. Right? So it's a very, very complex ecosystem where enterprises have data. And when incidents do happen, the first thing they need to answer is what they those potentially exposed. The problem is they don't know, right? And they don't know to a level that it is hard for people to imagine. We talked about their cars in the beginning. So I always joke that if you ask people on average, how well, how good of a driver they are, the average people tell you on a one to 10 scale is like an eight. Right? But if you ask a security practitioners or enterprise practitioners, IT practitioners,

• 9:42Speaker 02

  how good are they at data security? The average you're gonna get is a two. So people just can't imagine that everybody else is as bad at this as that. So that's how bad the problem is for customers. They believe that they're the worst at it because they just can't imagine that every other organization they're coming in contact with is is so immature on this aspect as well.

• 10:05Jason Calacanis?

  All right. Tell me if this sounds familiar. You hire somebody, they're not the right fit. Productivity drops, the team's momentum slows, it's uncomfortable, and suddenly you're spending more time fixing problems than growing your business. The wrong hire is gonna derail your whole company. It's gonna kill the vibes, the culture and productivity. But there's good news. A great hire can accelerate everything. That's why you need LinkedIn jobs. You wanna find the bar raisers. What's a bar raiser? Somebody comes into your organization and raises the bar for everybody else. And you're gonna find those people on LinkedIn, which has over a billion members worldwide in more than 200 countries. I know a lot of you're doing international stuff. I am. And did you know the majority of LinkedIn users don't even visit the other leading job sites?

• 10:50Jason Calacanis?

  70% of them do not visit the other leading job sites. So if you're not looking on LinkedIn, you're looking in the wrong place. LinkedIn is packed with amazing talent. They're just waiting for you to post your job. And here's a cool bonus. LinkedIn uses AI to help you craft job descriptions now that attract the right people. I've used this. It's amazing. LinkedIn is the best place to get eyeballs on your job posting. And the best part? When using LinkedIn jobs, 86% of small businesses get a qualified candidate within 24 hours. Stop waiting, start creating, post your job for free, LinkedIn.com/twist. That's right. F R E E if you use the following URL, LinkedIn.com/twist to post your first job for free. Terms and conditions do apply.

• 11:34Speaker 00

  Here's the thing that kind of blows my mind about this because I know that Syera was an early advocate for the phrase data security posture management, kind of helped set the term in the market. We've been having cybersecurity issues since, well, forever, but especially since the dawn of the internet, I suppose. And to me, what we're talking about here feels very fundamental to a good security posture, especially at an enterprise company, i.e. one that has lots of data, lots of employees, lots of devices, lots of networks. So how the hell did it take until you guys decided to build the company to get DSDM actually set up as its own category in cybersecurity?

• 12:13Speaker 02

  Okay, so I'll share a bit of the history of the space from my perspective. So first of all, not only is it not a new problem, it's actually the oldest problem. Because if you look at the title for the person responsible for cybersecurity in the enterprise, the title is not Chief Cyber Officer. The title is Chief Information Security Officer. And the entire profession was called information security. That was where we started. And as cyber attacks became more prevalent, the focus shifted from information security to cybersecurity. And a lot of the terminologies we've used became threat detection, response, became very cyber focused. But what has changed?

• 12:58Speaker 02

  So I'm a pretty young guy, and I still remember the floppy disk, 1.4 megabytes at a time as the best way to move data from place to place. Where do we live today? Right? Like with two clicks of a button at the end of this show, I'm going to upload, I don't know, 14 gigabyte video to a Google Drive that the producer sent me, and that's going to take 10 seconds, right? Like the ability to move data from place to place has changed completely. The amounts of data being generated in the world today completely disproportionate to what we generated 10 years ago. It's on a personal level, it's on an enterprise level, it's in every part of our society.

• 13:41Speaker 02

  There's more data being generated this year in the world. Then all of the data across the the history of the history of the world that has ever existed before.

• 13:51Speaker 00

  I can't wait until the first year if that's not true. So I feel like we've been saying that for a couple of years now. Eventually, we have to go, okay, we have enough data. Let's go back and look at it. But for now, my God. Okay, so it sounds like we had information security morphed into cybersecurity and now just kind of looking at here, we're bringing the center of gravity back to actually securing information.

• 14:13Speaker 02

  Yeah. So so what has changed? Right? Like, what was the approach in the past? The approach in the past was that every enterprise employee will manually classify sensitive documents by applying a tag to them. Right? But people don't like to do that. People don't like to do anything, right? Like especially not to tag their documents if they're top secret, restricted, confidential or not. And that approach just didn't scale. I like it just didn't manage to scale with the enterprise, with the duplications of data, with the amount of data being generated. And what DSPM is all about, DSPM is all about automating that. And that takes us back to the question you asked me earlier, and I didn't answer,

• 14:55Speaker 02

  which is why it's so important to be able to differentiate automatically between the data that matters and the data that clutters. Because ninety eight percent of the data doesn't matter. And you don't really care if it's lost in a breach, or you don't really care if it's accessible to the entire company. But some data matters so much.

• 15:17Speaker 00

  Okay, so the automated categorization of corporate data to me is an awesome, awesome idea on paper. And I know you guys say that you're up to ninety five percent accurate, if I recall, the marketing materials. But how can you look at a company's enormous, vast, diverse, cluttered, messy data? And then go in and say, okay, here are the important documents. Does that require a lot of learning from the new customer company about how they classify what they do? Or is your system kind of agnostic in terms of which customer you're talking to?

• 15:50Speaker 02

  So if it would require a lot of learning from the customer, we wouldn't be able to raise two funding rounds in one year of three hundred million dollars because the the time for adoption would be so slow and so cumbersome that, you know, nobody will enjoy it. But if you think about that question, right? Like, I I look at it as two different tiers. The first tier is what is the data? The second tier is how important is. Now, if we have a very good signal on the first tier, and we really understand what is the data we're looking at, then the second tier becomes much easier. Right now, in the second tier, enterprise practitioners, security practitioners, always have a saying, they say the business owns the data, and the business will tell us what data is important.

• 16:35Speaker 02

  Now, that is completely true. There's only one challenge. The business has no way of owning up to that responsibility. And what we're doing with DSPM is we're helping the business. We're giving the security practitioner the mechanism to help the business own the data. Because if you show me, as a business leader in my organization, what data I have, and if you show me this is the data we think is sensitive and should be protected, and how we plan to protect it, it's much easier to have a conversation than if you just come to me blank slate and tell me, "Hey, Mr. Chief Marketing Officer, what sensitive information does the marketing department collect? Where do you keep it, and how do we need to protect it?" "Well, I don't know. I've never thought about it in my life. I can't answer that question."

• 17:19Speaker 02

  Right? So that's the way we're refrasing the business process within the enterprise from being something that, you know, either the business needs to give us the answers, or we just have no answers, to something where we're creating an actual map of reality. What is out there? What do we have? And once you have that inventory, it's so much easier to really focus on what matters the most, and what you can get rid of, and what you wanna remove, and what we didn't even intend to have this data in the first place. We don't do PCI for six years in this company, so why do we still have a stash of millions of customers' credit card information from the old days? We don't want this information anymore. We just wanna get rid of it.

• 18:03Speaker 02

  So visibility is a huge, huge, huge accelerator for action and for accountability. And that's the magic we've created with DSPM. And to explain why that visibility is possible today, the only thing I need to give you is a very simple example that we all understand, because we all have ChatGPT today. So imagine taking a 50-page Word document, right, sticking it into ChatGPT, and telling ChatGPT, "In four tags, tell me what this document is about." Is it gonna do a perfect job? No, but it's a heck of a lot better than anything we had two years ago. And if you can do that at enterprise scale, over the hundreds of millions of documents that our customers have in their corporate environments,

• 18:47Speaker 02

  and the hundreds of petabytes that they're collecting in AWS and GCP and in the Snowflake and Databricks. If you can do that, then you can actually give them visibility to this incredibly valuable asset that they have, the data, and allow them to do so much more with it.

• 19:05Speaker 00

  Right. Now, on the accuracy point, if you're at 95% give or take now, how hard is it to get to 96, 97, 98? Is the incremental improvements to close that last gap a difficult challenge or one that's just a matter of time?

• 19:19Speaker 02

  Obviously, it's improving every day and every week as the engineering team continues to improve the classification engine. And we're also dealing with advanced use cases around data classification. So it's not just about that one dimension of what is the data. That's dimension one. But what about whose data is it? What about is it real data or is it synthetic data that somebody generated for testing purposes? What about use cases like I'm a B2B enterprise with many different customers? Every piece of data, I'd like to understand whose customers, which customers' data is it? I'd like, is this data that I was given by this business partner or by that business partner? Does this, if, let's say we're talking about personal information, does it belong to my

• 20:04Speaker 02

  customers or does it belong to my employees? Does it belong to European citizens, Canadian citizens, or California residents? All of these challenges are advanced classification use cases where AI can help us automate and really give that information to the practitioners out of the box. And that turns this visibility we're creating into something that is so actionable for them.

• 20:29Speaker 00

  Okay, that makes a lot of sense. And also, it does kind of solve the question of what are we going to use AI for in the enterprise? Well, at a very minimum, it can help us clean up a lot of cruft or clutter, as you said, that is both dangerous to individuals and also kind of a corporate language. Ability. Okay, that all makes good sense to me. I want to talk just a little bit about trail security. So you guys bought this company in October, you announced it. And if I recall, it was a hundred and sixty two million dollar cash and stock deal. And they do, or did, now you guys do, data loss prevention, DLP, if you want to use the acronym. And essentially, as far as I understand, that means that when a company has data that's in motion, being transmitted or pushed somewhere,

• 21:12Speaker 00

  it provides visibility into that. So just tell me a little bit why that is incremental or accretive to what Cyera was doing originally.

• 21:21Speaker 02

  So when we talk to our customers, and that's what we try to do most of our time. What we hear from them are two challenges. The first challenge is the one we've addressed with the SPM is we don't know what we have. I'd like, this, this company is so big, it's moving so fast, that we just have no assurance that we have a good inventory of our data, of our assets, and what we need to protect. And if we don't know what we have, how can we protect it? That was the first problem, so easy to understand, you know, even on a personal level, at a family level, you know that you don't know where all of the documents are and where all of the things that matter are, or where you left your passport in which drawer.

• 22:05Speaker 02

  And hopefully it's in the house and you didn't leave it at your parents' place when you visited them. Right? So we all understand that problem. The second big problem they've positioned to us, and we, we, up until the trail acquisition, we didn't have the tools to help them with, is exactly that, the data in motion. Well, I want to be able to detect and to block this data from going to unwarranted third parties, from going to a, a outside of our organization to people's personal Gmail addresses, or to people's personal Google Drive. I want to be able to know how data is moving out of the organization's control, even though we're no longer talking about data center on premise, you know, skill of control, but whatever it is that composes our perimeter today, right?

• 22:51Speaker 02

  So that's where Trail comes in and Trail have an agentless DLP approach that sits on top of the existing choke points that you already have because everybody's got something that looks at email and everybody's got something that looks at the endpoint. Everybody's got something that, you know, looks at their SharePoint Office 365 environment and Trail sit on top of that and they bring the quality classification of DSPM together with the context of identity, other activities that are happening in the environment. They're able to orchestrate this effort for the customers.

• 23:25Speaker 00

  Okay. Now, in very kind of like crass business terms, when you guys bought Trail, was this an acquisition that was mostly about adding a feature to the existing Zara platform? Or was this deal also something that brought in a noticeable amount of revenue to the business that you already had?

• 23:43Speaker 02

  So this deal definitely did not bring a noticeable amount of revenue because we acquired a very young company on its way up. I'd like we caught them with the momentum on the way up just before they launched into the world on their own. What it has brought us, it's brought Zara into a new market. The DLP market is a very significant market in data security. It's a market with 20 years of technology, 20 years of software, a lot of mature, mature, at least old implementations in enterprises. And it's allowed us to enter the space with an innovative approach, with a cutting edge approach and really disrupt

• 24:26Speaker 02

  some of the incumbent activity that's been there for so long and broaden our story from DSPM to the story that we're really excited about, which is that full data security platform story, becoming the leader in data security for the industry.

• 24:42Speaker 00

  Thank you for the beautiful segue. So going back to the fundraise and the thing that I was really curious about is you guys raised a bunch more money. I don't think you were low on cash and you just did a big deal that used some cash. So when I saw this and kind of put the two together, it really sounded to me like, well, you guys might be pursuing more M and A. So I'm kind of curious, as you look to complete this data security platform, how are you weighing build versus buy? And how is the startup market today in terms of being an acquirer? How attractive is the pricing out there?

• 25:15Speaker 02

  Yeah. So I, I, I think M and A from our perspective, being a young company ourselves.

• 25:22Speaker 00

  Sure.

• 25:22Speaker 02

  Being a very cohesive company, right? Like the company culture is very strong. People who work for Cyera love the company, are dedicated to the company. And they have a certain attitude about them, right? Like it's, it's not, eh, we're not a big corporation yet. And hopefully not anytime. We're four hundred people today.

• 25:40Speaker 00

  That's not, that's not small, Yotam.

• 25:42Speaker 02

  It's not small, but it's intimate, but it's intimate. You should have seen that. We had our New York City, we had our New York City Christmas party last night. That's not a big corporate party, I'll tell you that. You haven't seen this much dancing since eh, like it's, it's a very strong culture. So when we look at M and A, we're not just looking at weighing build against buy. It's like getting married. You have to really, really, really love your partner, to be willing to have kids together.

• 26:10Speaker 00

  Yeah.

• 26:10Speaker 02

  To go to their parents for eh, for the holidays. Like you're really choosing somebody who letting into the family and letting into, into a very, very, very cohesive and close-knit team. So it has to be absolutely right. I'd like, it's not worth accelerating the development by six months, but bringing on people that might not be the best cultural fit to what we're trying to do at Cyera, to how we think about our mission, to how we think about our customers, to how we like to operate. And like you have to be very sensitive of those topics as well. We're not some, you know, huge corporate that just needs another product to, to shoot down the stream. We want the right technology, but we also want the right people that will help us to really make this,

• 26:53Speaker 02

  make this fantasy, make this dream, make this vision come true.

• 26:57Speaker 00

  Okay. So let's talk about um, uh, both past and future growth then. So clearly Trail was a purchase. You guys had customers say, hey, we want this. So not a revenue buy, but certainly something that you can now go to your existing customers and say.

• 27:09Speaker 02

  Oh, we're already selling it. It's selling like buns, right? Like it's selling like hot buns. It's eh, customers love it.

• 27:15Speaker 00

  So that will both help your revenue growth rate next year and also make your, just to get into kind of SaaS metrics, your net retention looks fantastic. Um, does that mean that Cyera is going to grow as fast next year as it grew this year?

• 27:30Speaker 02

  Yes.

• 27:31Speaker 00

  And how, like you give me a ballpark for percentage growth. Is that like one hundred, two hundred, five hundred, ten thousand percent growth? Like what are we talking about?

• 27:39Speaker 02

  Next year, we're looking to triple, like to triple the company's revenue, to triple the new ARR.

• 27:47Speaker 00

  Did you do the same thing this year?

• 27:50Speaker 02

  We did a little better.

• 27:52Speaker 00

  Did a little better. Okay, that explains why the investors came to you and plonked you down a preemptive term sheet. Okay, that's very impressive.

• 28:00Jason Calacanis?

  If you listen to this podcast, you obviously care about what's going on in the world and you're going to want to get great coverage, which means you need to subscribe to the Washington Post. I know the election is now behind us, but the issues that define the campaign still matter. That means you still need a rock solid, dependable, trusted news source. And the Post is not just that. It also has apps, podcasts, and custom newsletters. So if you're super busy like I am, they have a really neat feature that's going to read the articles to you when you're on your hike around your ranch, going skiing, whatever your jam is. So there's no reason for you to fall behind on anything. Not with the Post in your pocket, ready to go. Here's your call to action now. More than ever, it's important to stay up to date on the world.

• 28:44Jason Calacanis?

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• 29:10Speaker 00

  Last thing I wanted to get to was the AI question from the customer perspective. Because when I think about anyone working with data today, I just kind of presume that their customers are coming to them saying, hey, we want to use our data in an AI context. We have to keep it safe, et cetera, et cetera, et cetera. I presume that's been a tailwind for Saera. My question is, is it still as big of a tailwind? Has there been any desolation?

• 29:36Speaker 02

  It hasn't even started, Alex. It hasn't even started. Like, we're in the very, very, very early innings of enterprise AI adoption. I think, I gotta say, I think our generation, we're all getting a little too hasty. Right? Like, I think AI, or everything we're seeing now with AI, it's the preliminaries, right? Like, I'm not even sure the game has started yet. We might be in the pre-game, right? But, like, we're seeing early AI adoption at the enterprise. We're seeing early, let's call it, AI adjustment. The organization is adjusting to be AI-centric, to promote the use of data, to solve and create efficiencies in their business.

• 30:19Speaker 02

  And like, we're seeing those things start to happen with the most innovative players in the enterprise space, in the market, right? Like, but it's still the earliest innings of what I believe is the AI revolution we're going to see over the next decade. And like, all of this AI buzz, if you think about it, it's what, 18 months now? Something like that. Like, it still takes time to implement and adopt technology in the enterprise, even if it's the best technology. Even if it's amazing technology, it still takes some time until it becomes mainstream and embedded. And I think that we're only in the very early innings of the AI adoption.

• 30:57Speaker 02

  We are working with some of the largest organizations in the US to support them on their secure AI adoption journey and responsible AI governance and allowing them to control this thing while enabling it to move fast. But it's, the tailwinds are only starting, right? Like, they're going to be much greater next year, and I believe they'll continue to grow for several years to come.

• 31:23Speaker 00

  Oh, okay. Well, that answers several questions all at once then. So essentially no slowdown. We're still accelerating and the acceleration will last not just for quarters, but for years. Well, that bodes very well for your future revenue growth. Um, which brings me to another company, Wiz. Wiz is one of the hottest names in cybersecurity I've ever seen, growing super fast. And I was just going back through their product offerings, prepping for our chat today. And I didn't know they also do, um, DSPM. And so I'm kind of curious if people that are also building younger, faster, higher cadence cybersecurity and data security companies are, are they showing up in, in, in deal competition? Do you end up running up against them? And if so, how are you guys doing?

• 32:08Speaker 02

  Wiz for us, first of all, a huge ally, huge partner and an inspiration. I like one of the companies that I think have done the best for the customers over the past few years. And we look up to them and we try to learn as much as we can from their success. And the way they've managed to serve their customers so well. I think that cybersecurity, like many markets, but maybe even more than some markets, is a very competitive space. And for every dollar, there's going to be at least 10 contenders raising their hand up and saying, I'm here, I'm here, I can take it, I can give me that dollar, I'll, I'll give you what you need. And that's the nature of our market, the nature of our space.

• 32:51Speaker 02

  I think Wiz has a huge mission that thereafter in the cloud security space, focused on infrastructure and vulnerabilities. And that's got endless depth to it. We're operating in the data security space, DSPM being a core product for us, with hundreds of engineers working on this space. And the depth of the use cases that the customers require is endless. I'd like, it's not like Cyera that, that we've been investing in the space solely. We've cracked it all. We have all the answers. We are done. Right? Like our customers are looking to us and saying, this is a great start. We need more. We need a heck of a lot more. Get going.

• 33:30Speaker 00

  That was the most polite way I've ever heard someone say that they're beating a competitor in a certain market niche. You went off with, we love Wiz, we love what they're doing, we love what they're working on. But it's really hard. It's so hard that we, the dedicated company, haven't even cracked it yet.

• 33:45Speaker 02

  The market is so big that there is room for so many players to succeed and do well. And Wiz is a dear, dear, dear friend, partner and ally to us. And we only wish them success in their journey.

• 33:59Speaker 00

  Okay, well, also, one last thing about Wiz is that they are going to go public eventually, and they've talked about that publicly. And I wasn't going to harass you with future IPO questions because it seemed a little bit too early, frankly. But this week, Service Titan went public. And I'm not gonna lie to you, it did much better than I had expected. And so I'm just kind of curious, as a CEO with really infinite access to private capital, seeing an IPO like Service Titan, does that change your long-term thinking about future exit timings?

• 34:30Speaker 02

  I think the IPO market is becoming more of a reality for us as a company as we continue to mature and grow quickly. And it's also becoming more of a reality objectively for every SaaS company that is looking at that opportunity in that space and, you know, the ability to launch. Right? Like, at this point, for us, we're focused on our customers, focused on our product, and focused on growing our business and making sure that we have the best data security platform to offer our customers, the best team to continue to work and execute in the market with immense energy and immense dedication to the customers. And if we do those things right, then I'm sure we'll find a way to

• 35:14Speaker 02

  to liquidate the company at some point, whether it's through IPO or through many other vehicles that exist in the market. But if you build a great business, then that business is worth something. So I'm focusing on that. And when we get to that point, we'll find the best avenues to meet the market.

• 35:31Speaker 00

  Yeah, it'll just be interesting to see if the IPO market warms up to the point in which companies Like yours frankly, which can raise as much money as they want in the private markets, might find the public markets more appealing earlier. I'm gonna be sad if if you guys don't list until you have, I don't know, five billion in ARR. Cause then the value's been so captured by the private market, there's not as much left for index fund investors like myself to to share in. I mean, frankly, some of the upside. So don't go public too late. I guess this is my only request.

• 36:01Speaker 02

  You know, Alex, look at the, look at the crazy world we're we're living with in with service now, like as an example. I like the the international market for software, for enterprise software is so large that even at 10 billion companies can still grow 25% year over year. Right? And and I think that that's a lot of the appeal that investors see in companies like Cyera is that potential ability to go and become a billion ARR, billions of ARR company with hyper growth. And I think that we have, like, our generation is looking up to those companies and saying, okay, what did they get right?

• 36:46Speaker 02

  What did they do from a product perspective, from a go to market perspective, to lay the right foundations for them to continue to capture such such attention in the market for so long?

• 36:58Speaker 00

  Well, I I'm looking forward to seeing your company pull that off. And we'll have you back in six months when I'm sure Cyera will raise yet another $300 million on the nose and doubles its valuation once again. Um, Yo Tom, if people want to find your company, tell us the URL before you go.

• 37:12Speaker 02

  C Y E R A dot whatever you choose, I O com. It will all, it will all get you, it will all get you there, but.

• 37:20Speaker 00

  That's what you're giving you by all the TLDs. Well, Yo Tom, thank you very much for coming back on the show. Congrats on the fundraiser and the acquisition. And really, the next time you buy something, if you do, call me, we'll have you back on.

• 37:31Speaker 02

  Thank you. Thank you, Alex. Thank you so much.

• 37:33Speaker 00

  See you soon.

• 37:35Jason Calacanis?

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• 39:01Jason Calacanis?

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• 39:05Speaker 00

  Alright, so I did not bring up, everybody, the ServiceTitan IPO, kind of, you know, in the abstract there, I do want to talk about it. Now, as a reminder, ServiceTitan is a vertical SaaS company focused on the braids. Think about people who swing a hammer, use a crowbar. Those folks need software too, and ServiceTitan has found an enormous niche in that area. And, I am a bit of an IPO nerd, I'll just admit that. But with the company dropped at its S1A and said, "Hey, we're going to list between $52 and $57 per share", I looked at that and I said, "Based on what I understand about the company, the market today, and just going public in general and the..." Last couple of years, that feels pretty much right.

• 39:47Speaker 00

  Then Service Titan came back with a new S1A filing and said, hey, actually, it's sixty-five to sixty-seven dollars per share. Two things. One, to see an IPO range narrow if it gets raised, not a huge shock. Companies tend to have more information at that point, so they can just give you a more narrow range. Then something kind of weird happened because they didn't actually price in that sixty-five to sixty-seven dollar range. Instead, they sold their IPO shares at seventy-one dollars a share. So they beat their raised range. That is an incredibly bullish thing for the company. Then the news got somehow even better. Once Service Titan actually did debut yesterday,

• 40:29Speaker 00

  they opened at a hundred and one dollars per share, went up to as high as a hundred and five, and are worth a hundred and one as of this morning. So essentially, they had a great IPO pricing run. They listed well, and then they traded very well. Now, at that price, a hundred and one dollars a share, give or take, they're worth about eight point nine billion dollars. Call it nine, which is very close to ten. Why does that matter? Well, we're kind of seeing what it takes to go public today as a SaaS company and be a Decacorn, or at least very close to it. So what does Service Titan have on offer that investors gave that valuation to? If you're a founder and you want to go public at about a ten billion dollar price tag, this is what you need.

• 41:14Speaker 00

  So in the third quarter, the company's midpoint revenue range guidance is a hundred and ninety-eight point five. So call it roughly two hundred million dollars in quarterly revenue. The company's net loss was forty-seven million at midpoint in Q3. That's mostly share-based compensation and some other stuff, not a huge concern for a company growing as quickly as this one is. And it had non-GAAP operating income of about a million dollars. So essentially, the company on an adjusted basis is now break even, and it's still growing well. Now, at its valuation, as of the end of trading yesterday, the company had a roughly eleven X revenue multiple. So if you're growing at about twenty-five percent, have about two hundred million dollars in quarterly revenue, and you're roughly break even on a non-GAAP basis, huzzah. Congratulations.

• 41:59Speaker 00

  The market will give you a roughly nine to ten billion dollar valuation. The thing that I'm kind of curious about is just how much or how many unicorns that are in the market today don't actually meet that threshold? And then what might they actually be worth? Because if that's what you need to get to nine to 10, there's a lot of companies that have a three to five billion dollar price tag from 2021. So you could think, well, they only need half of that to get out and go public and not lose a lot of their extant valuation. But I'm not sure it's actually true. One thing we've seen is that companies, as they get larger, tend to get a little bit more valuable, as if the market is saying, congrats, you're bigger, you get a premium for that, even if growth rates do slow.

• 42:42Speaker 00

  So there's nuance, but I will say, if you wanted to end 2024 on a very strong, positive high note for the IPO market, for startups, for everyone in this space, I don't think you could get a better Christmas present than what Service Titan just delivered to the market. Before we move on to a couple of other short hits, and then we're going to bring on the founder of Pay. I do want to say that the company did have to take a haircut to get out. So yes, it traded from 71 to 101 after listing, but I do want to point out that in June of 2021, the company was valued at about 9.5 billion after it raised 200 million. That was the Series G for folks keeping track at home.

• 43:23Speaker 00

  Then in November of 2022, according to PitchBook data, when the company raised just under 400 million in the Series H, its valuation fell to 7.6. So it went up, it went down, it went back up again, but the gist is it hasn't really made a lot of new value since that 2021 fundraiser. That's the hangover we're still dealing with from the era of peak Zerp. But I will say, one more time, Service Titan, you crushed it. Congratulations. Next up on the show today, and again, we have cake coming up in just a second, is Broncom reaching $1 trillion worth of market cap? So here's a fun game. There are now 10 companies in the world that I'm aware of that have a market cap of $1 trillion or greater.

• 44:04Speaker 00

  Here's the game. How many of those are US-based companies? I believe the answer is nine with only Saudi Aramco on one side. And Broadcom is the latest company to join this mix. Companies like Apple and Tesla, Microsoft, you know, you know, all those names. So how did Broadcom pull this off? Well, it's up about 20% today because its last quarter's earnings were very impressive. The company beat in terms of earnings per share, dollar forty-two above dollar thirty-eight expected, and revenue came in roughly in line. So what's changed at the company? Couple of things. One, it did buy VMware. That did help it post fifty-one percent revenue growth in the most

• 44:47Speaker 00

  recent quarter, but I think what matters the most is that its AI-derived revenue is scaling very quickly. So the company said, and I'm gonna go ahead and quote here, semiconductor revenue was a record thirty-point-one billion in the quarter, driven by AI revenue of twelve-point-two billion. And here's the key bit. AI revenue grew two-hundred-and-twenty percent year-on-year and was driven by Ethernet networking and their AI accelerator chips. That is really impressive growth. And as we just heard from Yotam, there's anticipation in the market by founders and large companies that enterprise AI adoption is just getting started. If that's the case, and Broadcom is seeing this kind of growth today,

• 45:29Speaker 00

  well, you can kind of imagine what we're going to see down the road. And if that does come to bear, well, the company's gonna make oodles and oodles of money. Here are some numbers that I pulled from the Broadcom earnings document that just blew my mind. The company's adjusted EBITDA margin in its most recent quarter was sixty-five percent. Now, eh, it's an adjusted figure, but still, that's a gross margin number for a lot of companies, not an adjusted EBITDA margin number. And then also, the company had five-and-a-half billion dollars of free cash flow in the last quarter. That's a free cash flow margin of about thirty-nine percent. Again, that's crazy and incredibly strong, and I think speaks very, very well to not only the company itself, but also the AI boom. There's another

• 46:14Speaker 00

  Name though, that I do think you should keep in mind, also now public sadly. Uh, but Astera Labs went public earlier this year. They build stuff for data centers to keep it in very basic terms. And they listed at thirty six dollars per share. Today, before the show started, they were worth about a hundred and thirty dollars per share. That's pretty crazy. You don't see companies usually list and then what four X very, very quickly, five X almost. Why is this happening? Well, kind of the same thing. In their most recent quarter, their fiscal Q three, the company's revenue of a hundred and thirteen point one million was up forty seven percent sequentially and two hundred and six percent year over year.

• 46:53Speaker 00

  That's absolutely bonkers. And I think both these stories underscore why we here at Twist need to dig in more deeply to the part of the technology economy that's dealing with just the nuts and bolts of making AI work. Because Astera Labs is kind of a boring company, but its results aren't. And Broadcom is kind of a boring company, but again, its results just aren't. I'm very excited about both these companies. One more tiny story that I wanted to slip in here before we get to Cake Equity. And this is that Texas's Attorney General Ken Paxton is suing not only Character AI, but fourteen other technology companies, names like Instagram and Reddit and Discord, regarding their privacy and data practices with minors.

• 47:37Speaker 00

  Now, we all want to keep kids safe. That's perfectly fine. It's a stance. But I do think it's notable to see a number of Republican backed efforts, both COSA in the Congress, and also what Texas is doing that are taking tech companies to task for data privacy issues. Because we've been talking quite a lot about less regulation, but here it does seem that we have a bit of a discordant note. It isn't quite mesh with the melody that we have been weaving. So as we talk about regulation and privacy and data security, just keep in mind that it's not a single serving issue. People have different perspectives and even people inside the same party can have very different takes. But Texas has been pretty aggressive in policing tech company data practices.

• 48:21Speaker 00

  How that's going to bear out next year, we'll see. But certainly there's not just one party out there that wants to regulate. Everyone has their own pet issue they want to put the clamp on. All right. Let's talk to our second guest today. We have Kim Hansen. He's the founder and CEO over at Cake. Kim, welcome to the show.

• 48:38Speaker 04

  Thank you so much. I'm excited to be here. It's awesome.

• 48:42Speaker 00

  I also, I have to give you 10 points for wearing your corporate shirt. If you don't arrive in your corporate t-shirt, you get minus five points immediately. So, well done, Kim. And I gotta say, I really dig what Cake's doing. Prepping for the show today, I, I learned quite a lot, but why don't you tell people just up top what you're building and then I'll dive in?

• 49:02Speaker 04

  Absolutely. So, first and foremost, just take a step back. I love startups. I think it's amazing. You know, when a group of founders and teams can get together and be aligned around a big mission, what they can achieve in the world, it's just phenomenal. And the human potential that we can unlock is just incredible. So every day, you know, I get out of bed to build tools for these people and to help them on their mindset, because it's such a freaking tough journey, you know. So, I encountered, so I've built a lot of tech, that's my background. I've led tech teams. I've seen what the capabilities are with technology. We have new technology with AI, super exciting. So how that can scale. I went through shareholders' contracts. I didn't understand the contracts at all.

• 49:45Speaker 04

  It was just complicated, legal sharkin'. In my former company, I was lucky to get some equity in the beginning of the early days of that company. And I tried for two years to set up an ESOP plan inside the company, but it was just impossible.

• 49:59Speaker 00

  Pausing you there, Kim. ESOP is E-S-O-P. Can you break down that acronym for folks who are listening?

• 50:04Speaker 04

  Yeah, and it's an employee share option scheme. So basically, it allows employees to get ownership, similar to the early founders of the company. And I believe strongly that every person in a startup should have ownership. So I tried for several years to get that through. It was just too difficult, too much legal hurdles. It was too expensive and it was so frustrating. So I just built all these frustrations up. And when I got a chance, I founded Cake to solve these problems. I also felt that the journey is so hard and long that you just gotta, you gotta give better tools. So basically, yeah, we set up Cake. It's a very easy to use, modern platform. It's very scalable. It's extremely flexible.

• 50:47Speaker 04

  It supports global teams. Um, yeah, it's, it's the best out there.

• 50:52Speaker 00

  And just putting that into very simple terms for everybody, you guys make essentially cat table management software that helps companies issue equity, handle options pools, get forward on evaluations, essentially all the nuts and bolts that are in the background, the boring financials, but critical stuff that underpins who owns a startup and who works there.

• 51:10Speaker 04

  Absolutely. I can work through a little bit of a demo if that helps.

• 51:15Speaker 00

  Sure, if you want to, we love a demo here on the show. Let's do it. Also, it means less people staring at my face. So, you know, I'm totally here for it.

• 51:23Speaker 04

  When you come into the platform, it's super easy to set up. There's a premium really big thing we have, especially for early stage startups that need to learn a lot. We have incredible guides that will take you through all the complicated stuff, all at your own pace. When you come in, we have an easy to use checklist that will guide you through getting you activated, getting upfront value right away. We're always a call away if you need, if you get something, if you get stuck with something, but eighty percent of our users are self onboarding and can get value right away within minutes. Now, it's, it's super hard to understand who owns what. Often that's hidden in spreadsheets or clunky interfaces. So we have a very elegant interface that clearly says, uh, that has all the information you need. You can easily dive into each stakeholder.

• 52:07Speaker 04

  We support all the different types of stakeholders in the platform. We support all the different types of securities in the platform. So all of this is.

• 52:17Speaker 00

  This interface that I'm looking at here shows a lot of different stakeholders and how many shares they have. Is this the view that a founder would have, or is this the view that I would have if I was an employee, say, of, you know, startup Inc?

• 52:30Speaker 04

  Absolutely. So we'll get to this. This is the founder view. Okay. So, but it's really a collaborative effort. So you as a founder come in at different states. That's why we have the checklist. We have the guides. And but this, this is really used together with your advisors. That can be your lawyers that understand this, the power users. So you have all the nuts and the bolts. We basically took all these complicated sharken of equity and broke it down in pieces and made each piece like as much as we can a one click solution and super simple to, to follow. But also you're gonna work together with your advisors. Now, the really awesome thing and what we're working on is to accelerate startup team motivation through equity. And that's really the connection between founders and employees that is so powerful.

• 53:11Speaker 04

  And helping that language, because it's it's really difficult for founders, depending on their maturity level and equity, to explain what it's worth and all of those things. So we have also, you saw before the the founder view, this is the employee view. So we have an employee app where you clearly can see how much you own. At the current state of the today, this is sixty three percent earned. So every month, you're typically investing a bit more of your ownership and you can see that ownership comes up. Every time you do that, you can send kudos back and messages back to the founder. So we have all this kind of organic communication and let's go to, let's let's win this when the price, when the valuation of your company goes up, hopefully over time, you will follow that directly.

• 53:52Speaker 04

  Now, each employee or investor or something, investors also have access to that. Is on their own pace of learning. So we have these little flashcards that are super popular.

• 54:03Speaker 04

  Each person on their own journey can go through this little snack bites. Um, it lifts lifts off the burden for founders as well to to explain all of these things. Um, so that just makes it a lot easier for you to have fun. This is built for mobile. Um, so it's really, you know, you can.

• 54:17Speaker 00

  Yeah, I can, I can tell. It looks super simple. It's not enterprising. It, you know what it doesn't feel like? Concur. Which is, I think everyone's had to use Concur at least once. And this is the opposite of that. And actually, it doesn't seem like it hates me.

• 54:33Speaker 04

  I like that. Yeah, it's it's using a bit more colors and building a visual language. And ultimately, we're on this journey of taking equity, this complex legal sharkin, and building a visual language that is fun and easy to use and and much more value comes out of it. That also builds more trust when you actually understand it. Uh, it creates more transparency, which means that we can get to a more fair solution for everyone.

• 54:56Speaker 00

  So that's kind of where I wanted, wanted to pick up on on questions because, you know, uh, I I've used Carta in the past and you guys have competition also from companies like, I don't know, Diligent and Poly. People are working on this problem. From the startup perspective, but like my question, Kim is, you know, can you make this simple enough and functional in enough markets that more companies can offer equity to their staff apart from just startups? Because startups are cool, but they are a very small fraction of the total global, you know, business world. So can you guys make sharing equity or giving equity to employees just more common full stop?

• 55:36Speaker 04

  That's the long-term vision. I think every employee in every company should have ownership, should have a portfolio of the companies that they go through. You know, there's a long way to go with that. The startups are leading the way. But even the startup landscape is changing now with bootstrap companies that don't necessarily get the, you know, that are not using funding to grow. Of course, the employees should have ownership as well in this. So we're gonna get there and you can, you can use the platform for that as well for any type of company that are maybe less startup-y as well. Even though our sweet spot, it's for C2 Series A startups that are really in that growth phase and they need to move fast.

• 56:13Speaker 00

  So how fast do you, one, go up market inside the startup problem, going through companies that are, you know, all the way up to, we just had a company on that raised another $300 million Series D. But like, how long until you're ready for the oldest companies? And then broadening the base, what does that look like?

• 56:32Speaker 04

  Yeah, so it's, it works super well if you're in that C2 Series A, but it also works really well for an earlier stage company. Typically, that's, I showed you all the guides that you have. So we get a lot of freemium content that is really providing you the information you need at that time. It's free for up to five stakeholders on the platform. So you can get a lot of, and you can get the standard legal contracts and lots of insights already. So you can kind of get warmed up. At that stage, you don't have much money. So it's really about providing as much value as we can. Ultimately, hopefully, we can get to a point that it just gets more and more free for early stage startups because they shouldn't have an extra spending because they, you know, they don't have too much money. Now, even though our sweet spot is the C2 Series A,

• 57:17Speaker 04

  that growth phase. A scalable phase, you know, we have um Series B, Series C companies on on Cake and we have a very, very low churn. So we don't really have a point where, okay, they can't use Cake more because they become too mature. We're not targeting uh these companies uh directly. We just are, we're just building for them all the time and maturing the product. And making sure that, you know, we target the really ones that can get value right away within minutes on Cake. But then they stay on the platform and we kind of mature and grow with them and and listen to them and understand what they need. So we like to grow with the companies that are on the platform and build that close relationship uh of support.

• 57:53Speaker 00

  Going back to the the the point about, you know, people being able to self-serve their way on to Cake. I I presume that there's a pretty serious automation component to this because one criticism that I have heard of Carta over the years is that it's so services-based that it almost feels like a consulting business with a tech arm versus a tech company with the, you know, a people component to it. So how much work has Cake done on on automating the boring paperwork side of things to make it possible for companies to kind of show up on their own and get started?

• 58:22Speaker 04

  First of all, that's really hard. It's really difficult to take something like Equity and make it fully self-service um. And but we're actually managing to do that for eighty percent of the companies. So they can onboard themselves within minutes that usually with a human that takes four days. So that's a huge frustration for if you're a founder and you're like, some advices that you need to have a better solution for your cap table. And then you have to wait for someone to to be on a call and all of that. So it's super important. Now, the technology behind that, uh, if you go back in the days, I I built a contract engine when I was still coding in Cake in the early days. And that was basically because I saw you had the spreadsheets and then the solutions were there were just kind of glorified spreadsheets. But for me, the value is really when Equity transacts hands from founders to employees, et cetera.

• 59:06Speaker 04

  So to solve that, I built a contract engine that is integrated with the cap table, who owns what. So the flow really works well. And that's basically uh a way to have the contracts so that you have all the the common themes in there and you can kind of edit them easily. But it sets up a standard contract for you. So it's really what how we use that also with technology is we use a lot of AI. To analyze what is the behavior, what are the actions that that are needed to take for the founders to get value upfront? And then we guide them through that and make, you know, checklists all over the place and make it super easy with the guides. So that they can actually mature as they go in their own pace. So that's giving that onboarding experience, you can set yourself up within seconds, minutes.

• 59:50Speaker 04

  Um, and then you're ready to go and you can start um inviting your stakeholders and send them the cap table. And which also helps founders be, you know, uh, to make the investors impressed and the employees and say, hey, we're part of this journey. In in the old days, getting a an ESOP or getting options in a company was getting a a paper contract. You know, you sign it, you put it in the drawer, it's you don't know what it meant, it's you burn out, it has no value, right? And then the digital versions came of that, but we're really taking the next step with a modern tech platform with a lot of data driven uh analysis of what's the best behavior to get the value out of equity.

• 1:00:29Speaker 00

  So how how many people work at the company today? How big is the staff?

• 1:00:33Speaker 04

  We're twenty seven people, it's a global team, we have products here, uh, we're in the US, we have a team there, uh, it's growing. Um, we're not here to to hire hundreds of people, we don't believe in that. We use a lot of technology, including L L M uh and machine learning to automate everything that we do. Uh, so we can really scale inside each, I think every cakester is a knowledge worker. Uh, independently of their title, they're observing the customers, they know how to solve the problems. And then behind the scenes, we're recording and automating uh with L L Ms, that's that's incredible, powerful now to to automate all the decision makings to extract uh contracts uh insights that before, you know, that's unstructured data before we couldn't do that. Now we have a lot of opportunity to do that.

• 1:01:16Speaker 00

  I I the staff question was my very polite way of wiggling into the fact that you guys are originally an Australian company.

• 1:01:23Speaker 04

  Yeah, yeah, that's true, and.

• 1:01:25Speaker 00

  I love, because I don't talk to enough, well, one enough Aussies in general. But also, I I love hearing about companies that are building stuff that are not based exactly inside of San Francisco. So it's always nice to hear that people from around the world are working on this problem. But I'm curious about the Australian element of this. Does that nation have a similarly, I don't know, um, welcoming approach to the legal side of startup equity?

• 1:01:50Speaker 04

  Yeah, so one of the challenges obviously is to make a product work in different regions, especially when the legal can be quite different. So we looked at the common patterns for equity usage and built a very flexible platform that supports that. So we looked at Silicon Valley from the very beginning. We looked at Australia, we looked at Singapore, Southeast Asia support. We looked at London and we designed the contract engine and the rules and how the options are vesting and all of these things to support all of this in the same way. We looked at how an organization is set up. So the specific organization IDs and all of these things that are important for each region need to be separated in a database. So it was architected to be extremely flexible from the beginning, also with the contract engine that can support different contracts from different regions.

• 1:02:34Speaker 04

  Now, you know, Lance and Jason Calacanis came in in August when we were in the Startmade Accelerator and invested in us and since then we've 15x our revenue. So that's fantastic, you know, great belief and happy for really, really grateful for the support that we showed. With that, we won Australia, so we're the leading cap table provider here. We, since then, launched in 50 countries, so the platform works in 50 countries. And now we're seeing a humongous demand in the US. It's growing. We had our biggest month in October. That was beat by a mile in November and that's being beaten now in December. Again, what looks like to be a mile. So, um, yeah, it's just fantastic to see how well accepted and wanted our product. And I think it's also our values and our culture that is wanted everywhere.

• 1:03:20Speaker 00

  I'm curious where the growth is mostly coming from. Um, you said you've kind of won Australia, going in the US, but you also mentioned Singapore, Southeast Asia. So where, which markets are driving the fastest percentage growth for Cake today?

• 1:03:34Speaker 04

  Right now, it's definitely the US. It works super, super well in the US market and there's, it's such a huge market for us. Uh, our growth package is, is, you know, ripping off the shelf. Uh, so it's just, um, answering to that demand.

• 1:03:48Speaker 00

  I believe you. I'm not trying to say that I don't. But when I think about seed through series A companies in the US, I mean, it's, it's, it's thousands, maybe, maybe low four, low five figures.

• 1:04:03Speaker 00

  That doesn't seem like the world's biggest TAM to me if you're focusing on that particular niche. So what am I, and there's competition. So what am I missing in terms of my incorrect mental market sizing regarding Cake's growth potential here in the US?

• 1:04:18Speaker 04

  Yeah, so definitely we want to capture a market share in that sweet spot, see to serious, eh? Because those, a lot of those companies will mature into the next stage. And that's, we, we also have a pro package. We hadn't launched that in, probably in the US yet. We've launched that in Australia and we have low churn on that as well. So that's really where our TAM grows like crazy. We will eventually get to selling other services as well, but we're extremely focused as a company. So it's really getting that sweet spot, building the brand and the awareness in the US that here is a different path. This is who we are. We are founder friendly. You know, we, we want to support you. This is the modern data-driven platform. It's, it's very different from what's out there.

• 1:05:00Speaker 04

  So it's really building that brand and then we expand and it's, it's both ways that we expand.

• 1:05:05Speaker 00

  I'm glad we had you on because I'm sure you saw this, but Carta, one of your competitors was recently criticized very publicly over their subscription ethics and how hard some founders said they made to make it counsel, to cancel their service. So when you talk about founder friendliness, sure, that means also, you know, features and capabilities, but also how you treat customers. So just for the sake of being fair to everybody here, how do you guys handle customers who want to go from Cake to a, a rival service? Do they have to schedule a call with you guys? Do you have an export feature? It seems to be the of the moment question for cap table services. So how do you guys handle that?

• 1:05:46Speaker 04

  Absolutely. And I think we have cheaper plans as well. So we're not locked into these very expensive plans. You know, each company has a different path. We want to be very founder friendly. That means that you can easily downgrade. You can pause. As a founder, you're going to go up and down. You think you have a race. It's almost done, but you know, things take three months extra. And then you might not need, it's maybe not such an urgent need for the cap table. So it's very easy to pause on our, on our app. So. We make sure when an employee leave, when a when a customer leave, we have an offboarding for them. Uh. It's really, really important. They own their data. Um. You know, they are in the driver's seat as a founder.

• 1:06:25Speaker 04

  Um. That's our philosophy. Um. It's not like we own the data. We use the data to make the to make each equity decision easier. But the founders own their their data. Um. So all of these are one click solutions again to to get off. Our mode is not in in holding on to like um hostages. The the founders and the startup teams. I think our mode is is, you know, being really, really founder friendly. And building the the easiest platform to use, the most flexible, most scalable. Um. That's that's our mode, really.

• 1:06:57Speaker 00

  Well, I mean, I I wish every company that had a subscription product had the same perspective, but given that they don't, I can actually see how that view, that that ethical standpoint will make you stand out because who doesn't want to be treated like an adult by their service providers, you know, I mean, just that seems such a basic thing to say, but yet many companies don't meet that standard. Now, just one last thing before I let you go. One thing that Carter does that I that I love is they take a look at their kind of data from all their customers and they pull out insights from it. So Kim, I'm kind of curious. Are you guys gonna build eventually a an in-house data team to kind of extract insights from the information you guys have, anonymized, of course, privacy safe and so forth?

• 1:07:40Speaker 00

  But I I love to learn and you guys have such on the ground data that I I would love to know what you're seeing in it.

• 1:07:48Speaker 04

  Yeah, absolutely. And we've actually already built that into to cake. The first features that you can actually see is uh when you're giving options to an employee, it will have the guidelines. These are the standards. So you can you have a little slider, you can just choose how much and you're being guided all the time of what's the best practices, what's the standards out there? Uh. We launch uh frequently reports. We've done that in Australia. We'll come to the US very soon about the data learnings that we're learning about how you treat employees well, what's the standard, how mature is the market? What's the what's the best setup? So we're not here to give uh financial advice uh or legal advice. But we're always bringing out, these are the standards. This is what we see as best practices.

• 1:08:29Speaker 04

  Now, um, make it make it make it easier for the founders. So, yeah, a lot of that is coming more and more, and we have definitely a data team to take care of that.

• 1:08:36Speaker 00

  All right. Well, I'm excited to see how you guys grow next year. Whenever a company says we crushed October, November, and we're going to crush November and December, you know, something's cooking. So I can't wait to hear about growth next year. I'm presuming you're looking at at least triple digits in 2025.

• 1:08:53Speaker 04

  I expect that.

• 1:08:54Speaker 00

  Okay, awesome. Well, come back on in, say, June and let us know how it's going and how the US expansion goes. I love hearing companies coming here to the US to do business. And if people want to find cake, what's the URL?

• 1:09:07Speaker 04

  CakeEquity.com.

• 1:09:09Speaker 00

  Simple enough. Don't go to cake.com like I did, probably for sure today. Turns out not the right company. All right, Ken, thank you so much for coming on Twist. We'll let you go now and people can go to Cake Equity and check it out. And for everyone else, this has been yet another Twist. My name is Alex. Jason will be back on the show early next week. And then you won't just have to stare at my face the whole time. There'll be two of us here. Quite a lot going on. Lots before the holidays. I'll see you then. Goodbye.