CO

Connectly Financial Model

• Cloud platform enabling businesses to run two-way, AI-personalized messaging across WhatsApp, SMS, and other channels.
• Core modules: Unified Inbox, insight-driven dashboard, CRM integrations, campaign/broadcast automation, website widget, in-message payments.
• WhatsApp Business Solution Provider (BSP) - direct API access, no-code campaign builders, 2-way communication at scale.
• AI layer: message prioritization, tagging, routing, personalized recommendations, sales/agent assistant, conversational analytics.
• Full-funnel: lead gen → transactions → retargeting, all within the customer's preferred thread.

• CPaaS TAM: ~$72B; source: Goldman Sachs Software Report, December 2021.
• CPaaS TAM growth: 30%+ per year, 2022–2025.
• Chart (sl.6) shows Communication Platforms (CPaaS) TAM ~$70B (blue bar), Cloud TAM 2020 ~$2B (red), Cloud TAM 2025 ~$17B (yellow) - rough reads off bar chart axes (0–100 scale).
• Adjacent categories in same chart: UCaaS (~$95B TAM), CCaaS (~$25B TAM), CEM (~$15B), Project Mgmt (~$35B), DaaS (~$20B).
• Consumer pull stats: 2.5B+ WhatsApp monthly active users; >80% of people perceive businesses positively if they can message them; 9/10 people want to communicate with businesses via messaging; 95% of texts opened within 3 min.

Three revenue streams:

1. Subscription (platform license): Monthly license fee for marketing & automation + notification tools. Tiered by segment.
2. Message pass-through margin: Cost per message (WhatsApp, SMS) charged to customers at a ~5–20% margin over carrier/Meta cost.
3. Payments in thread: Take-rate (% of transaction value) on in-message payment transactions.

Expected average ACVs:

• SMB DIY: $2K – $20K per year.
• Enterprise: $30K – $200K+ per year.

• Customers: ~60.
• Top markets: Brazil, India, US, Indonesia.
• Verticals: eCommerce, Fintech, Travel, Healthcare.
• Use cases: Marketing, OTP (one-time passwords).
• No ARR, MRR, or revenue figures disclosed in deck.

Case study - Treinta (sl.12):

• 10x better performance than other channels.
• >80% read rates.
• >60% CTR.

Case study - ISA Lab (sl.13):

• 60% customer response rate.
• Average 5 campaigns sent per day.
• ~2K messages sent per week.

• Message margin: ~5–20% over wholesale cost.
• Subscription pricing range implies mid-market ACV of ~$11K (SMB midpoint) to ~$115K (Enterprise midpoint).

Moat claims:

• WhatsApp BSP status (direct API access) - structural barrier; most competitors lack it.
• No-code campaign builders vs. developer-only alternatives.
• 2-way AI understanding of conversation context vs. outbound-only incumbents.
• Built-in CRM integration and conversational analytics.

Competitive gap vs. existing solutions:

• Incumbent tools focus on outbound automation, lack personalization, no direct API access, poor integrations, unable to prioritize inbound messages.

Team:

• Stefanos Loukakos - Co-founder & CEO.
• Yandong Liu - Co-founder & CTO.
• Joscha Koepke - Head of Product.
• Vincent Lan Shi - Head of Design.
• Isabelle Brenton - Head of Marketing.
• Juliana Schlesinger Felippe - Head of Sales, LATAM.
• Engineering team: ~8 engineers (AI/ML, frontend, backend, full-stack).

• Archetype + why: B2B SaaS + CPaaS usage-based hybrid. The business has two distinct P&L layers that must be modelled separately: (a) a subscription ARR engine (seat/tier-based license) and (b) a message-volume margin engine (gross-margin pass-through on WhatsApp/SMS volume). A third nascent stream - payments take-rate - is too early for a dedicated module but should be a toggle. This is closest to a "SaaS + usage" combo model, similar to Twilio or Intercom.

• Forecast horizon & granularity: 3 years monthly (months 1–36), then annual summary for years 4–5. Monthly granularity needed because both new customer adds and message volume ramp are irregular and early-stage.

• Key drivers & assumptions:

*Customer / ARR drivers:*

• Starting customers: 60
• New logo adds per month: 5–10/month, ramping with sales headcount; no deck data on growth rate
• SMB vs. Enterprise mix: 70% SMB / 30% Enterprise initially, shifting to 50/50 by Year 3 as GTM matures
• SMB ACV: $11K midpoint
• Enterprise ACV: $115K midpoint
• Annual logo churn: 10% SMB / 5% Enterprise - early-stage SaaS benchmarks; no retention data in deck
• Net Revenue Retention: 110–120% - usage-based component drives expansion; no deck data

*Message volume drivers:*

• Messages per customer per month: 5,000 avg for SMB / 50,000 avg for Enterprise; based on ISA Lab case (~2K/week = ~8K/month for small healthcare customer)
• Message volume growth per customer per month: 5% MoM as customers expand campaigns
• Wholesale cost per message (WhatsApp): $0.005–$0.008 (Meta published BSP pricing range); not in deck
• Margin on messages: ~5–20%; model at 12% midpoint

*Payments stream:*

• Take-rate on in-thread transactions: 1–2% of GMV; toggle off by default until Year 2
• GMV per transacting customer: low volume in early periods; not in deck

*Cost drivers:*

• Gross margin on subscription: 70–75% - typical SaaS infra + support cost; no data in deck
• Gross margin on messaging: 5–20% pass-through; use 12%
• Blended gross margin: 55–65%, improving as subscription grows faster than messaging
• S&M as % of revenue: 40–50% early (customer 60 signal indicates sales-led, not PLG)
• R&D as % of revenue: 30–35%; engineering team is ~8 people
• G&A: 15–20% of revenue

• Scenarios (Base / Bull / Bear - which variables flex):
• Base: 7 new logos/month, SMB/Enterprise 70/30 mix, 12% message margin, 10%/5% churn.
• Bull: 12 new logos/month, faster shift to Enterprise (50/50 by Year 2), 15% message margin, 5%/2% churn, payments take-rate live Year 1.
• Bear: 4 new logos/month, stays SMB-heavy (80/20), 8% message margin (pricing pressure), 15%/8% churn, payments take-rate delayed to Year 3.

• Required sheets / outputs:

1. Assumptions - all drivers centralized with scenario toggle (Base/Bull/Bear).
2. Customer Cohort Model - monthly logo adds, churn, and net active customers by segment (SMB / Enterprise).
3. ARR Bridge - new ARR, expansion ARR, churned ARR, net new ARR, ending ARR.
4. Message Revenue - volume × per-message revenue × margin; separate from subscription P&L.
5. Income Statement (P&L) - subscription revenue + messaging revenue + payments revenue; COGS split by stream; gross profit; OpEx (S&M, R&D, G&A); EBITDA; net income.
6. Headcount Plan - sales, engineering, product, G&A; feeds S&M and R&D cost lines.
7. Cash Flow / Runway - operating cash flow, capex, ending cash; critical given no funding ask is disclosed but this is clearly pre-profitability.
8. KPI Dashboard - ARR, MRR, customer count, NRR, blended gross margin, burn rate, months of runway.