It’s been said that data is the new oil. Not only has it acted as a fuel for growth, but data has been the catalyst for a whole new way of doing business. In this episode, Michael sits down with Stephany Lapierre, the founder and CEO of Tealbook, a supplier data foundation that uses artificial intelligence and machine learning to enable supply-side innovation. As a supply chain thought leader, Stephany has raised more than $73 million for the company, and much of it during the pandemic. While COVID-19 was breaking down supply chains, Tealbook was building up its ability to connect buyers with suppliers in a whole new way. During the episode, Stephany explains how Tealbook accelerated its fundraising while pivoting to tackle the greatest health crisis of our time. Connecting the dots The idea behind Tealbook is to collect supplier information for global enterprises that need to access data quickly, easily, and efficiently. Recognizing the need for a faster way to access data, Stephany leveraged technologies like AI, machine learning and the cloud to create a system that could keep up with the rapid evolution of the supply chain. By connecting the dots in a way that no one else had yet, Stephany was able to create a service that’s completely unique and allows companies to make sense of an abundance of data—fast. Never give up After years of running her own successful consulting business, Stephany didn’t need to create Tealbook, but her vision was so clear and persistent that she couldn’t not bring it to life. This strong vision and her belief in the product helped to keep her driving forward, even when things got tough. Although there were plenty of opportunities to throw in the towel along the way, Stephany never gave up, keeping her vision alive in the face of obstacles and refusing to compromise. Be a thought leader, not a follower For Stephany, an important step in bringing Tealbook to life was positioning herself and the company as an influential voice in the space. By focusing on building relationships, solid branding, and earning credibility, Stephany was able to establish a place for herself in the data and supply chain industry. Posting on LinkedIn and writing about the subject regularly helped her gain a following and become a trusted thought leader over time. CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking. This episode of The CIBC Innovation Banking Podcast was produced by Quill.
It’s been said that data is the new oil. Not only has it acted as a fuel for growth, but data has been the catalyst for a whole new way of doing business. In this episode, Michael sits down with Stephany Lapierre, the founder and CEO of Tealbook, a supplier data foundation that uses artificial intelligence and machine learning to enable supply-side innovation. As a supply chain thought leader, Stephany has raised more than $73 million for the company, and much of it during the pandemic. While COVID-19 was breaking down supply chains, Tealbook was building up its ability to connect buyers with suppliers in a whole new way. During the episode, Stephany explains how Tealbook accelerated its fundraising while pivoting to tackle the greatest health crisis of our time.
Connecting the dots
The idea behind Tealbook is to collect supplier information for global enterprises that need to access data quickly, easily, and efficiently. Recognizing the need for a faster way to access data, Stephany leveraged technologies like AI, machine learning and the cloud to create a system that could keep up with the rapid evolution of the supply chain. By connecting the dots in a way that no one else had yet, Stephany was able to create a service that’s completely unique and allows companies to make sense of an abundance of data—fast.
Never give up
After years of running her own successful consulting business, Stephany didn’t need to create Tealbook, but her vision was so clear and persistent that she couldn’t not bring it to life. This strong vision and her belief in the product helped to keep her driving forward, even when things got tough. Although there were plenty of opportunities to throw in the towel along the way, Stephany never gave up, keeping her vision alive in the face of obstacles and refusing to compromise.
Be a thought leader, not a follower
For Stephany, an important step in bringing Tealbook to life was positioning herself and the company as an influential voice in the space. By focusing on building relationships, solid branding, and earning credibility, Stephany was able to establish a place for herself in the data and supply chain industry. Posting on LinkedIn and writing about the subject regularly helped her gain a following and become a trusted thought leader over time.
CIBC Innovation Banking is a trusted financial partner to entrepreneurs and investors. Get in touch with our team at cibc.com/innovationbanking.
This episode of The CIBC Innovation Banking Podcast was produced by Quill.
[00:00:01] Stephany Founders tend to take on far too much on their own shoulders and delay what they should be doing really quickly which is build the team, raise capital. Hit it. If you're going to do it, don't do it halfway. Shoot for the stars.
[00:00:17] Michael Hello, I'm Michael Hainsworth. The CIBC Innovation Banking podcast explores the world of startups, growth stage companies, and late stage companies that have made a big splash in their industries around the world. Stephany Lapierre knows data is more than just the new oil. It's beyond a fuel for growth, it's the cause of it. As the founder and CEO of Tealbook, Lapierre has managed to raise more than $73 million and much of it during a pandemic. Just as COVID-19 was breaking down supply chains, Tealbook was building up its ability to connect buyers with suppliers in a whole new way, using artificial intelligence machine learning algorithms and a will to win. But how did Tealbook accelerate its fundraising while pivoting to tackle the greatest health crisis in 100 years? To understand that, I first needed to understand how the company and Lapierre work. So I asked Stephany to explain the business like she would have to her parents.
[00:01:28] Stephany So our customers are enterprises typically that have thousands or tens of thousands or hundreds of thousands of relationships with suppliers. These are companies that would sell products and services and are really essential, right, for an organization to operate. And the challenge is that there's a lot of information about these suppliers that need to be collected and maintained and gathered for various reasons. A lot is compliance-related or just even understanding who you do business with so that you can leverage them more effectively. And traditionally, the information about those suppliers have been collected through, really, manual efforts and a lot of implementations of software that have a portal that allows the suppliers to put in information in a portal. And the complexity of those enterprises is that there's more and more software collecting various portions of information on these suppliers. But now imagine you've got tens or hundreds of thousands of suppliers operating globally. You've got multiple requirements across all of these providers in multiple software, they're collecting different information. And the world is changing so fast that companies are looking for an easier way to access all of the information about the suppliers that they do business with. And so our technology has leveraged the fact that there's now web, right and there's technologies like natural language processing, there's machine learning, there's cloud technologies that allow us to go out and find information on every B2B supplier, all of these suppliers in the world, in the millions. And we're able to feed that information to the enterprise so that they have instant visibility and better data across a hundred percent of the suppliers that they do business with. And because we collect so much information across so many different data sources, it also allows them to expand to know other suppliers that are most similar that they should be potentially considering or be aware of. And that could be for different initiatives. It could be because they're looking to enter new countries. Maybe they're relocating their supply chain from Asia to North America. Maybe they're looking to introduce competition to drive better pricing so that they can achieve better savings. They may be looking for companies that are sustainable or smaller diverse. And so there's a lot of different needs for this data. And today no one has had the opportunity to use technology the way we are to be able to collect this information and feed it at a speed, at a scale, and with the mechanism to make that data better over time. Our data over time becomes more insightful, becomes more predictive. So it really creates the intelligence of the enterprise to leverage these thousands and thousands of relationships globally to operate better.
[00:04:23] Michael Now, what was it that led you to create Tealbook then in the first place? I can't imagine any teenager wakes up one morning and decides in the future they're going to create technology that gives a consolidated, enhanced view on data.
[00:04:36] Stephany I think it came down to my nature, I always want to fix things, I'm always looking at opportunities to improve. And so maybe I should have been an engineer or, you know, but I'm always looking for fixing things. I'm definitely an entrepreneur at heart. I've always been and I've always known I would be an entrepreneur. And I started a consulting business 15 years ago, and that consulting business put me at the forefront of the problem. Initially, that company was focused on helping large organizations improve access to innovation through suppliers to then start building what was called strategic sourcing, which was adding more strategic value to the procurement process. And then a lot of my clients started engaging my consulting firm where companies were raising a lot of money, and they needed to spend really fast to scale the entire infrastructure, typically to launch a first commercial product. And so procurement was not so much about savings. It was about speed, about access to innovation, enablement of people, transparency for finance, to know that they're spending their money really fast, but also really intelligently with the right suppliers and leveraging the right relationship without putting the organization at risk. So that's what put me in the forefront of the problem, because no matter if I was working with large organizations that were more quote unquote sophisticated to these small companies where we had a clean slate of building something that was truly strategic and valuable to the organization, we kept running into the same problem. And I saw this as not being a people problem or even a process problem, a lot of time it's overprocess, or even a software problem because there is so much software and the software is good. It's not the issue, but I saw it as a data problem. If we don't have the opportunity to collect information faster and connect the dots really quickly so that the organization has a full picture of the information that they need, we can actually create agility and we can create transparency and speed and then help the organization achieve its corporate objectives much, much faster. But the complexity of what I saw is that the architecture that existed was full of friction, a lot of duplication, a lot of manual effort, a lot of lack of good information didn't allow you to build a sound strategy. It didn't allow people to execute fast enough. It didn't enable this procurement, this by side function to add more strategic value to the organization so often seen as sort of more like a bottleneck and something, a process that people had to go through that they didn't particularly like. Because at the end of the day, the employees want to get their job done as fast as possible, get to the outcome with the best possible partners. And if there's a lot of friction in that process, it can be frustrating and frankly will delay revenue. It can increase risk to the organization and things like that.
[00:07:26] Michael You've said that you've always been an entrepreneur. The entrepreneurs I speak to always seem to say that. Why is it that you think you've always been an entrepreneur? What was it that made you who you are?
[00:07:40] Stephany First, I think I come from a family of entrepreneurs, so I grew up seeing my grandmother take over Pepsi when my grandfather passed away and she was fairly young. She had three kids and decided that she was going to run the business. And so that was pretty inspiring as a young girl to see my grandmother taking on the bottling and distribution of Pepsi in Quebec. And my mother on the other side is also very entrepreneurial, always has owned businesses, reinvented herself so many times, and has always sort of been in control of her own faith. And then I look at all my friends from high school. I'm from Quebec and there are a lot of entrepreneurial people. And just by nature, I think all of my friends became entrepreneurs. Even if they're lawyers, they have their own law firm. If they're a real estate agent, they are basically running their own businesses. A lot of people came from entrepreneurial backgrounds, so I think for me, it was a way of life. I wanted to have more control over my future. So from a very young age, I knew I want to have a business. I didn't know what that was going to look like, but I knew that was going to be my path. And when I was 18, I started a business with two guys in Quebec and it was, we bought a book of talent artists and we started doing corporate events for companies. And so that was my first opportunity to really build something of my own. I ended up selling that company and then ended up going to teach skiing, went to university, hoping to find my partners at university. I think I was always looking for what's going to be that idea. Who am I going to build a business with? But in any opportunity that I've had, I've always looked at a way to spin that into a business. And at some point, you know, I had to make a decision. Ok, I've got to start a business that probably has low risk at the time, and that was my consulting business that I started and thought, you know, if I can build this successfully and that's what put me in the forefront of a problem that I frankly tried to kill for nine years because having three kids and having a successful consulting business, I didn't need to build Tealbook. It was not out of necessity, but the problem was always so real and in front of me. And I thought, if this vision I have existed, it would solve problems for every single customer that I worked with and that was hundreds of companies and so and nobody was looking at the problem that way. Everybody was trying to solve it through software and through portal solutions. And I became really convinced that if we could have a data platform that was agnostic of all these solutions, then we could connect the dots. We could give that kind of visibility. We would actually make the investment in those software better. Because when you buy software, it's typically assumed that you're getting the ROI, but that's assuming that the data in the software is good. When the software and the data is not good, you're going to have subpar outcomes. And so if we can make that investment, you know, even better, then we can actually change the architecture of the future. And that felt really exciting. And so, you know, that's what drove me. But I do think it's part of your DNA. The risk tolerance, the resiliency, the passion for solving a problem has to be so real because it's hard. This journey is really, really hard. And if you don't fundamentally believe in what you're building, I mean, it's so, it would be very easy to be discouraged or give up.
[00:10:56] Michael Well, tell me about that, that hard journey. The Globe and Mail cites as you landing 50 million in funding. The reason behind that was a quote "hustle and a will to win.” Being a hustler is a unique skill, though. What is the hardest lesson you had to learn about that skillset?
[00:11:18] Stephany I don't think you learn, and I think it's, I think you're born with it, and it's 64.5 million Canadian. It's 50 million US right? I want to correct that because I think it makes a big difference, but it's never accepting. I've never accepted that things would fail or that's just the way it is. And I think you can change things. There are a lot of moments in my journey that it would have been easy to give up. I had someone that came in. We're looking to potentially have him as a COO. And he said if I was the CEO of the company, I would just let it ride. Focus on this one use case in the software and try to maximize the value of that. And I looked at him and I said, That's why you're not the CEO, right? So because the vision is so big, but not everybody understands the path. And I didn't understand necessarily the path either. But my vision was very real. And so, yeah, I think it's not accepting just the facts and this is how it is. It's actually always challenging how things are being done so that you can find a path forward. And it's been true for the entire journey. It's been not accepting to run out of money, not accepting that the market is going on a different route, not accepting that someone can't do the work, right. It's making the changes that you need at the speed that you need them and always listening to opportunities. I've been said before that I listen to too much feedback. I love feedback. I listen to people. It doesn't mean that I take all the feedback, I internalize it and then make my own decisions, but it allows me to get perspective and allows me to understand that the things that are more important keep getting repeated very quickly, kind of analyze it, and then make my own decisions based on that. But I think it's really important to listen and take feedback and grab these small opportunities that you feel are right and follow your instincts. That's one thing. Maybe at the beginning, I didn't have as much confidence, but over time, just over and over, you know, validating that my instincts are right. I've got a really good ‘spidey sense.’ And so I can now lean harder on that because I have now more confidence that I am right most of the time. Not all the time but most of the time. And I don't mind a different perspective on it I'm able to shift. But typically my ‘spidey sense’ is right, and now I've gained more confidence and more credibility to be able to lean harder on those to create change.
[00:13:46] Michael Ernst and Young reports 72 percent of the 200 supply chain executives it surveyed said the pandemic has had a net negative effect on their company. For the one in 10 reporting a net positive, most cited increased customer demand and bringing new products to market. Regardless, 92 percent of all companies continue to invest in technology through the pandemic. Lapierre saw this at Tealbook and pivoted.
[00:14:16] Stephany For us, it was, and I'm saying this slightly, because it's been disruptive for so many businesses, but we've been advocating that data as the core pillar for digital transformation. We've been advocating that the big fat lie is that software will fix data. And so that story we were already telling before COVID and the market was really starting to come our way because they had implemented these multimillion dollar large enterprise solutions that were not giving them better quality data. And so suddenly you saw a market kind of feeling a bit duped by what they bought, still valuing the software but the quality of the data that they need to operate and make better decisions did not exist. And a lot of our customers believe that you could not have true enablement and digital transformation success without the data. So the market was listening, and that was a reposition that we've done just before COVID. But when COVID hit, it suddenly raised to everyone, that software does not fix data because no one could have access to the information that they need at the speed and scale that was required in order to ensure business continuity or secure PPEs or secure sources that would enable you to shift your production as fast as possible in a very competitive environment. Everyone was looking to secure the same things. And so suddenly I think it raised awareness not just for the procurement of supply chain, but for the executive level. Like, where's this information? Like how many suppliers do we have in China? If you don't have answers to that, right, where do we source this raw material from that's now super expensive? How do we get other sources of suppliers that can enable us to reduce pricing? I mean, all the questions were raised, and if these functions were not able to deliver, then you know, there was a huge gap. And so suddenly data became really important and we were able to respond. We had just raised our seed extension. We were just starting to build our go-to-market team. And when COVID hit, one of our account directors that we had recently hired suggested that we offer to the market supplier lists for any organizations that were disrupted by COVID. And because we've seeded all this supplier network and have so much information, and we had built algorithms that enabled us to understand what makes a supplier similar or not to one another and it just powered a search engine were able to very quickly provide supplier lists for any organizations that it was for PPEs or raw material or alternative suppliers that were local, etc. So that grew our pipeline like it exploded. We had 160 requests within the first couple of weeks. Then all the software providers that had promised good data couldn't deliver of what their customers need at the time. And so we also received inquiries from software providers looking to partner with us to integrate our data into their solution and our search engine so that they could deliver more value to their customers. And so it was a huge opportunity for us. We were a smaller team at the time we had just started building our go-to-market strategy. When I look back, we were not prepared for COVID, to capitalize on it. Luckily, you know, we were able to accelerate raising Series A. And so we ended up raising two or three quarters ahead of schedule. And with that capital, then we started to really build out and scale the team. And that allowed us to get ready for our Series B, which was closed just before the holidays. And so again, it's about these opportunities like you can choose to, and we've seen so much resiliency within COVID of businesses could have given up, right? But they completely pivot their business to capitalize and to make sure that they survive. And some have actually done incredibly well because of that in environments that you would have not expected. And so that to me is entrepreneurship, like, do you have the resiliency? Do you have the capacity of grabbing these opportunities or these challenges and turning them into opportunities, not just to survive, but to actually build a better business, potentially and be more competitive and sustainable?
[00:18:24] Michael You said earlier, the Big Fat Lie is that software will save your company. Isn't that the first page on your pitch deck?
[00:18:32] Stephany So the Big Fat Lie that software will fix data. And so I don't think so, I don't think anybody would expect software to save the company. But software does not fix data. That's that was sort of the assumption that if you have a portal and you invite suppliers to a portal that will come and put information because you are such a well-known organization, of course, suppliers would want to do business with you and comply with your requests. But what ends up happening is that if you're an organization that has maybe 15 software, maybe 25, maybe 150 that touches the buy-side, that means that for each of those software, you need suppliers to come to a portal to input information, and they just don't do it because, on the supplier side, you end up having multiple systems across all of your customers, it's so time consuming you will go to get paid, you'll put your banking information in, and you'll put limited amount of information, but you're only going to go back when it's need to be updated again, driven by wanting to get paid. There's nothing else really that will motivate a supplier to go and update information across four or five hundred different portals. It's just not sustainable, and especially if you're a small, midsized company that has limited resources, it's not where you're going to focus your resources. And so it created a big problem where the organization that implemented these portals. If suppliers are not coming in to update the information, then they have to figure out a way to get the information. And so they, you know, they will subsidize with services, they will subsidize with people, they will buy other portals for other reasons, and so they'll build integrations between those systems. And it's always done with software that has subpar data. So typically, what I would say to one of our customers or prospects is even if you could connect all these software to each other in a really easy way through middleware, you're assuming that the data in the software is good and there's not enough machine learning AI you can throw on top of that to make it amazing. You may find some insight, but it won't be incredibly insightful. And then let's assume that the data is good. So from magic, if magic way that all your software has really amazing data and you're connecting them to each other, then you only have visibility into what you know, which is very limited, actually. It's what you don't know or in the context of the world that is becoming as or even more important so that you're able to capitalize on opportunities for innovation or for increased competitiveness or, you know, trends or potential risks that you need to be aware of.
[00:21:05] Michael So you got that early Series A funding, how did you leverage that? Because you've been quoted as saying that the biggest challenge is defining a category that never existed. How did you leverage that funding to define that category and get in front of those customers as COVID was rising? you got that early Series A funding, how did you leverage that? Because you've been quoted as saying that the biggest challenge is defining a category that never existed. How did you leverage that funding to define that category and get in front of those customers as COVID was rising?
[00:21:22] Stephany I think what we've done well is establish a lot of really strong relationships in the market. When even early on, there's a lot of people that believed in this story, there's a lot of people that saw this as an opportunity that knew fundamentally that data was flawed. If we could fix, and you hear this all the time, garbage in, garbage out, portal potties, if only we could fix our master data, a true enablement won't happen until this master data is sorted out. There's a lot of these quotes, and so we were able to find a lot of the people that believed in the problem. And I think it's admitting that there's an actual problem is the first step. If you don't think you have a data problem, you're not going to be your customer. But if you're admitting that not only do you have a data problem, but if you had access to better data, if you could also connect all the dots and give you more visibility, it could be incredibly powerful. We're talking hundreds of millions of dollars in value for the organization, so we had to go in and find the people that believed in the problem. Building relationships with influencers was key and really advocating for this path forward. And so a lot of content, if you follow me on LinkedIn, you know, I've been writing on data and supply chain and procurement for quite a few years. That was one of the first things as advice I got as an entrepreneur, is a friend of mine in PR, that said just start writing and pick a cadence that could be once a week, once every two weeks, once a month, but just start developing content. It will become second nature. As a French-Canadian person, English is my second language so that seemed really daunting. But as soon as I started, I started getting inspiration. And at the time, when we used to fly a lot. That's what I would do. I would sit on the tarmac and, you know, and on my phone and start writing content that could be inspired by a conversation I had or something that's happening in the market or something that I read. But it was always about producing content that enabled myself to be positioned as a thought leader in this space and then start positioning the company as the next generation, right? And last year, Kearney published this ecographic of all the sort of the future ecosystem of the e-procurement world. And they put Tealbook, which was the only logo in the middle of it, as the supplier data foundation and all the software that people thought we competed with, we didn't, were all around the circle. And that was really positioning us as being the supplier data foundation that powers the buy-side digital enterprise that unifies these systems, that optimizes the supplier base, that empowers the people in the organization to move and act faster. And so not just the one thing, many, many things, but I think putting a lot of feeders in the market and building relationships early on has paid off because our space, they won't spend money on companies that are at risk. And they will love the idea, they'll want to pilot something, you know, but making a commitment to a new organization like you need to check all of the boxes, especially the size of customers that we have, which are Fortune 500 companies from a security, from a credibility, from a data governance like we have, we had to be SOC 2 certified. We have to be GDPR certified. We have to meet all these infosec requirements, and from a credibility and branding perspective that was equally important.
[00:24:40] Michael You brought up the influencer advocacy, and I'm sure you're not talking about paying Instagram models to talk about your product. We've heard this time and time again on the podcast that if you want to get your foot in the door with, say, a Fortune 500 company, you don't have to go to the top. You just need to find who the decision makers are below the top, who will influence the ultimate decision made at the top. Sounds like you followed that path.
[00:25:06] Stephany I'd say that probably not at the beginning, because our relationship was more, we sell today to chief procurement officers and now CIOs. They would touch the CFO as well. But my first, the people that I used to engage in the early days were chief procurement officers that were buying into this vision. Having them advocate, having them on stage talking about a solution was really powerful because the industry is looking up to these influencers. And so we took more of a top down approach, today account directors are going more to decision makers within the organization and then getting building more advocacy across, like I mean really focused on what is, what do they need the data for? Right. So we're focused more on use cases of what the client's corporate priorities are and how we can help them. But a lot of them have heard of Tealbook. Either through their CPO or they've heard it through industry thought leaders or analysts. And that definitely helps them build the business case to adopt us. But we're still very close to chief procurement officers who are influencers, that's whose on our advisory board. We're starting to do some advisory boards across VPs and chief procurement officers of our customers by industry because we need them to guide us on where, you know, what are their corporate priorities, what are they looking to achieve? What are the challenges so that we're always staying on top of what's happening and ensuring that the money that we're spending is going to be invested in the places where we can add the most value to our clients? Right. And so again, it's both. But when you're starting a business like, you have to find the people that are going to be the key influencers, in my view and get, you know, build relationships and listen and get them involved in your development process
[00:26:57] Michael 2021 proved to be a banner year for fundraising if your company was in the right space at the right time. The average deal size doubled and that trend continues, Christian Lassonde of Impression Ventures tells me. The valuations are high, but smart founders are playing the long game and Stephany Lapierre is one of them. She recently raised 40 million on top of the 10 million in debt financing from CIBC Innovation Banking. She tells me fundraising is easier than her day job because it requires metrics that show the idea is working and she's got them. She's got a triple threat. Fast growth, talent retention, and a multibillion-dollar opportunity in a market that hasn't been disrupted until she came along.
[00:27:42] Stephany At the beginning, it was really, really hard because I never raised capital before, and I was not someone who had built a company and had credibility in our community. And so I had no technology background and I was I didn't have a team. So in the early days, it was really, really hard. I had landed some really big customers, and even that did not give me enough to easily raise capital. And to me, it was like, what do they need? What else do they need than landing these six customers? One was a $60 billion market cap client, right? And super invested in our success. And so it was again, it's listening to feedback. I want to hear from investors. Why would they not move forward? And you know, some of them will be super polite and give you kind of high-level answers. But the ones that were real and told me the truth are the ones that helped. I remember this investor who says, “Hey, Lone Ranger, like, you can't do this by yourself, like you got to have a team.” And I remember at the time I had won six customers. I had a team in Montreal that was building the technology. I had one employee and I felt really defeated because I was like, I need the money to be able to hire the CTO and the commercial person in-house and build my team there and then bring our, one of the other feedback is because we were outsourcing the technology, we're not really creating value. So it was really important that we own and build the technology in-house. We're talking very, very early days of Tealbook. And so, but I remember leaving that meeting with the investor kind of feeling defeated because it was sort of the chicken or the egg, right? If they don't raise money, I can't hire the team and how, you know. Anyway, so I left kind of feeling like, how is that going to be possible? And some magic. There's a lot of pixie dust across this journey, but someone mentioned that they knew a CTO that was in a company that had recently been acquired, so there was a possibility that they would be interested. He came from our world. I'd worked at Ariba, I'd worked at Google, and could come with a team and capital. And so that's what end up happening, my first CTO, decided to join, wrote a check, brought in the CEO of the previous company to join as a COO. And we were able to secure our first seed investment. And so that was the first institutional money that we secured. And then from that point on, it was all proof points like, what validation do we have in the market? And Series A, Series B, because now we have data, right? So it's not about me necessarily, of course, people, investors have to have the confidence that the vision is real. There's a real market opportunity. We're attaching herself to a market that's growing really, really fast. All these things are true. But now it's all about the proof points in the data. So we had to hit certain metrics and we had, you know, above-average KPIs across the board. And so that's when investors get really excited. An investor told me once that investors will get on a plane without even knowing anything about the business if they see the KPIs. And so us having, you know, growth over 300 percent or net retention 168 percent, our sales cycle reduced, like all these proof points that we had built over the past year, got investors really excited and we ended up getting basically a preemptive term sheet ahead of our process.
[00:31:03] Michael So here's an awkward question, what's the biggest mistake you made in the early days when it came to approaching funding that you don't want any other startup entrepreneur to make?
[00:31:14] Stephany I didn't understand. I just did it. So part of my strength is I do it. But I've wasted a lot of time meeting investors that were at the wrong stage that didn't have a fund at the right life cycle, didn't have a thesis in my space. And so I learned a lot from it. But I could have saved hundreds of hours of my time and their time by focusing on investors that were appropriate for my space, at the right stage, with the right fund that could add value to my business, that would understand my business and what I'm trying to achieve. And so I guess I kissed a lot of frogs to get there, and it worked out for me. But if you can be a bit more strategic about who you go after, learn the landscape, know the funds, know their thesis, trying to find the analogy of investment that they would have made so that you can make reference to some of those investments because if they can see the parallel, and then look from their eyes, what do you not have today from a risk profile, for me was that I was a woman. I don't think it's about gender. I think a lot of women will tend to carry a lot more risk on their shoulders and won't build a team fast enough or raise capital fast enough. And so suddenly, you know, you're going to put a few million dollars in it in an individual whose potentially high risk. I've got three kids like, what if one of my kids gets sick? Like, what does she have that she can actually take my millions of dollars and multiply that 10 times or more? And so I looked at it from their lense and saw, OK, I need to de-risk myself. And that was building the team. Bring the technology in-house, right? Bringing advisors in. All of that network that I've surrounded myself was to de-risk the fact that the company did not just rely on me, and I had complimented my skill set so that we could actually execute. Because if there's four women coming to pitch me on investing in them and they have a solid idea, even if it's all not figured out, but they all have complementary skill sets, they're all super excited and motivated, and I can see that there's a path for them to be successful. That gives me a lot of confidence, but I think the gender thing often is again, I mentor a lot of women founders. They just tend to take on far too much on their own shoulders, and delay what they should be doing really quickly, which is build the team, raise capital. You know, hit, hit. If you're going to do it, don't do it halfway. Shoot for the stars.
[00:33:37] Michael On the topic of capital, you pivoted from venture capital and shaving off pieces of the company in exchange for funds to debt financing. At what point do you pivot from VC to debt?
[00:33:48] Stephany So we always have taken debt as part of our rounds. It's a nice sort of added cushion in case things don't necessarily go as planned, because it may be that if you're building a product, you may have a lot of assumptions of how things are going to go and it may not go exactly the way you thought of. And if you need a bit more time to validate so that you can have the right proof points to go back to investing, you may want to have that cushion. You don't want to use debt financing as a way to kind of, you know, get you out of a bad situation. You really want to have it as a way to increase the value of the organization, if needed, if you need a little bit more time. That's always how I saw it. So in the first seed extension, we ended up taking debt financing, building the relationship with the banks on Series A we took a little bit more. And so by the time we raised Series B, we were able to leverage the fact that we have now built relationships. We have been fiscally responsible. We are showing some really strong proof points and having the right VCs also helped, right, bridge that relationship with the banks. But I just think it's a really good opportunity when you have money in the bank, it just gives you in case you need that extra cushion, it's there. It's hard to get that financing later on.
[00:35:10] Michael Since in 2021 you saw your growth triple-expanding into new sectors like tech, real estate, consumer packaged goods. How do you maintain such breakneck growth while maintaining your existing customer base? How do you keep your eye on the ball?
[00:35:25] Stephany Our data is quite industry agnostic and the use cases are very similar. And so for us, it doesn't really matter which industry or sector we go into. There's virality within a sector and the data becomes more interesting over time as we kind of have overlap of suppliers having multiple customers. We don't share that data with clients, but our profile becomes more insightful. The relevance score becomes better. We have insights and benchmarks that we can start extracting, but we can land a new customer in mining or retail or technology, and we can turn the light onto their data right away. And so if our clients are looking, for example, how many of their suppliers are small and diverse, that means they're a certified woman-owned, veteran-owned, African-American-owned, etc. If they have a certification today, our clients would have to collect this through a portal and then validate the data with their master data. It's quite a manual process, and not all suppliers will do it. With Tealbook, once you activate, your master data we'll give a company, as you know, as large as Fortune 100 companies, we have hundreds of thousands of suppliers, a really accurate report on who they do business with, that small and diverse, looking at 100 percent of their suppliers. So typically, the uplift is 20 to 300 percent more diverse spend. Then we can start looking at suppliers that are potentially small and diverse. So the use case, the drivers for the use case are different. If I'm in higher education, I get funding federal funding based on that data. If I am in pharma, for example, and I do hospital contracts, I'm going to need to report that to the government or if I get federal grants, if I'm in technology, may just be a driver because my shareholders are looking for this data. My consumers are looking for this data, right? So it may be more from a competitiveness perspective or to make sure that I have a pipeline of innovation. So the drivers across sectors are different, but the use cases are very similar. So it's a bit of a luxury for us to have started in pharma biotech, where that was my background, really built up momentum there to learn from those clients before expanding into new sectors. But this past year we've opened. I think it's 12 or 14 new sectors, right?
[00:37:36] Michael But the problem, of course, is that when you go from the startup stage into that growth stage, the risk is stumbling as you accelerate your growth. That happens with many startups as they try to shift from one speed to the next gear up as it were. How do you avoid that, that stumble?
[00:37:57] Stephany Hire really, really smart people and build technology that scales. And so no get caught into customization and high service type of businesses. I mean, it works for some businesses. For us, it was really important to understand what we were building, what was repeatable and scalable. And last year, when we raised Series A, once we got that capital, there were three things that were really important to our business. Could we continue this velocity of the market coming our way and look for the solution and capitalize on that? Could we build to scale? I hired in Q1, seven new executives that had startup growth experience across all of the functions so that we brought people that knew what they were doing and could hit the ground running. And then the other piece is, could we build predictability? Could we become predictable in our business? You know, if we can build predictability, not only it allows us to operate effectively, but also gives confidence to our team of where we can spend money and get the best outcome. It also gives confidence the investment community. If we're going to say we're going to hit X revenue by next year, we get credit right in their evaluation. They're not looking at the AR today, they're looking at next year's AR and they're counting that in our valuation and we better deliver. And so the more predictability you show quarter over quarter, the more confidence investors are going to give you credit for that forward. And it's the same if we decide to go public, the public market, we don't necessarily need to get to 100 million AR. But if we show that quarter over quarter, we were predictable and we came within a certain percentage of our forecast. It's much easier to go to the public market and say, Hey, we know we're going to achieve 100 million AR by 2026.
[00:39:37] Michael Oh, this sounds like we've got an opportunity for part two of this conversation when, not if, you IPO. Stephany, thank you so much for your time and insight. This has been great.
[00:39:48] Stephany Thank you for having me.
[00:39:52] Michael The years ahead are looking bright for Tealbook. Thanks to a steady hand on the tiller and that will to win. By building a relationship on the debt side of her financing early, it's added credibility to the books at Tealbook and gives the company extra runway to meet its KPIs. Continuing to provide the transparency investors and customers demand will be key, as will maintaining that influencer advocacy. After all, the best salespeople for your product are its customers. I'm Michael Hainsworth. Thanks for listening.