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Jan 6, 2020 · 20m · top-founders

1626 How He's Making $5m in ARR off $35M in GMV From B2C ECommerce Brands

Kieran Bollard · 11m spoken Nathan Latka · 6m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview with Nathan Latka, Kumo CEO Kieran Bollard discusses how the enterprise e-commerce platform scaled to $5 million in ARR on $35M–$40M in GMV. Bollard breaks down Kumo's agency spin-out history, hybrid SaaS and GMV take-rate monetization, direct sales unit economics, and strategic convertible note fundraising.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 35.6% of the talking time here. How this is scored →

Nathan as informed peer 5.5 Guest teaching 3.2 Guest disagreement 2.3 Nathan pushing back 4.7
05100:0010:0020:001:02–5:22 · Nathan as informed peer 6/10 Kumo's Origins and Corporate Spin-Out Nathan presses Kieran on total funding raised and claims European public records disclose investment figures. Kieran pushes back that standard balance sheet filings do not show round details and explains the liquidity funding from their sister company.5:22–8:35 · Nathan as informed peer 4/10 Product Capabilities, Target Market, and Pricing Architecture Kieran explains Kumo's full-stack product architecture and contrasts their mid-to-enterprise positioning against Shopify and Salesforce. He lays out their implementation fees and GMV-based revenue sharing model.8:35–10:56 · Nathan as informed peer 7/10 Business Model Debate: SaaS versus GMV Revenue Share Nathan directly challenges the SaaS classification of Kumo, arguing VCs will assign lower transaction-model multiples to a GMV revenue-share structure. Kieran defends the model by differentiating B2C demand from fixed-fee B2B contracts.10:57–13:26 · Nathan as informed peer 5/10 Take Rates, Enterprise Negotiations, and Client Profiles Nathan explores the 1-3% take rate and queries whether a massive brand would automatically pay that tier. Kieran clarifies how enterprise clients negotiate custom blended models.13:27–16:51 · Nathan as informed peer 7/10 Go-to-Market Strategy: Channel Partnerships and Direct Enterprise Sales When Kieran admits he does not have CAC numbers on hand, Nathan reframes the issue around capital efficiency and calculates payback economics based on customer revenue yields.16:52–20:02 · Nathan as informed peer 4/10 Consolidated Revenue, GMV Milestones, and Zero Churn Kieran distinguishes consolidated parent company turnover from Kumo's $5M ARR, reports zero churn, and completes the standard Famous Five rapid-fire questions.1:02–5:22 · Guest teaching 4/10 Kumo's Origins and Corporate Spin-Out Nathan presses Kieran on total funding raised and claims European public records disclose investment figures. Kieran pushes back that standard balance sheet filings do not show round details and explains the liquidity funding from their sister company.5:22–8:35 · Guest teaching 3/10 Product Capabilities, Target Market, and Pricing Architecture Kieran explains Kumo's full-stack product architecture and contrasts their mid-to-enterprise positioning against Shopify and Salesforce. He lays out their implementation fees and GMV-based revenue sharing model.8:35–10:56 · Guest teaching 4/10 Business Model Debate: SaaS versus GMV Revenue Share Nathan directly challenges the SaaS classification of Kumo, arguing VCs will assign lower transaction-model multiples to a GMV revenue-share structure. Kieran defends the model by differentiating B2C demand from fixed-fee B2B contracts.10:57–13:26 · Guest teaching 3/10 Take Rates, Enterprise Negotiations, and Client Profiles Nathan explores the 1-3% take rate and queries whether a massive brand would automatically pay that tier. Kieran clarifies how enterprise clients negotiate custom blended models.13:27–16:51 · Guest teaching 3/10 Go-to-Market Strategy: Channel Partnerships and Direct Enterprise Sales When Kieran admits he does not have CAC numbers on hand, Nathan reframes the issue around capital efficiency and calculates payback economics based on customer revenue yields.16:52–20:02 · Guest teaching 2/10 Consolidated Revenue, GMV Milestones, and Zero Churn Kieran distinguishes consolidated parent company turnover from Kumo's $5M ARR, reports zero churn, and completes the standard Famous Five rapid-fire questions.1:02–5:22 · Guest disagreement 4/10 Kumo's Origins and Corporate Spin-Out Nathan presses Kieran on total funding raised and claims European public records disclose investment figures. Kieran pushes back that standard balance sheet filings do not show round details and explains the liquidity funding from their sister company.5:22–8:35 · Guest disagreement 1/10 Product Capabilities, Target Market, and Pricing Architecture Kieran explains Kumo's full-stack product architecture and contrasts their mid-to-enterprise positioning against Shopify and Salesforce. He lays out their implementation fees and GMV-based revenue sharing model.8:35–10:56 · Guest disagreement 3/10 Business Model Debate: SaaS versus GMV Revenue Share Nathan directly challenges the SaaS classification of Kumo, arguing VCs will assign lower transaction-model multiples to a GMV revenue-share structure. Kieran defends the model by differentiating B2C demand from fixed-fee B2B contracts.10:57–13:26 · Guest disagreement 2/10 Take Rates, Enterprise Negotiations, and Client Profiles Nathan explores the 1-3% take rate and queries whether a massive brand would automatically pay that tier. Kieran clarifies how enterprise clients negotiate custom blended models.13:27–16:51 · Guest disagreement 3/10 Go-to-Market Strategy: Channel Partnerships and Direct Enterprise Sales When Kieran admits he does not have CAC numbers on hand, Nathan reframes the issue around capital efficiency and calculates payback economics based on customer revenue yields.16:52–20:02 · Guest disagreement 1/10 Consolidated Revenue, GMV Milestones, and Zero Churn Kieran distinguishes consolidated parent company turnover from Kumo's $5M ARR, reports zero churn, and completes the standard Famous Five rapid-fire questions.1:02–5:22 · Nathan pushing back 6/10 Kumo's Origins and Corporate Spin-Out Nathan presses Kieran on total funding raised and claims European public records disclose investment figures. Kieran pushes back that standard balance sheet filings do not show round details and explains the liquidity funding from their sister company.5:22–8:35 · Nathan pushing back 3/10 Product Capabilities, Target Market, and Pricing Architecture Kieran explains Kumo's full-stack product architecture and contrasts their mid-to-enterprise positioning against Shopify and Salesforce. He lays out their implementation fees and GMV-based revenue sharing model.8:35–10:56 · Nathan pushing back 7/10 Business Model Debate: SaaS versus GMV Revenue Share Nathan directly challenges the SaaS classification of Kumo, arguing VCs will assign lower transaction-model multiples to a GMV revenue-share structure. Kieran defends the model by differentiating B2C demand from fixed-fee B2B contracts.10:57–13:26 · Nathan pushing back 4/10 Take Rates, Enterprise Negotiations, and Client Profiles Nathan explores the 1-3% take rate and queries whether a massive brand would automatically pay that tier. Kieran clarifies how enterprise clients negotiate custom blended models.13:27–16:51 · Nathan pushing back 6/10 Go-to-Market Strategy: Channel Partnerships and Direct Enterprise Sales When Kieran admits he does not have CAC numbers on hand, Nathan reframes the issue around capital efficiency and calculates payback economics based on customer revenue yields.16:52–20:02 · Nathan pushing back 2/10 Consolidated Revenue, GMV Milestones, and Zero Churn Kieran distinguishes consolidated parent company turnover from Kumo's $5M ARR, reports zero churn, and completes the standard Famous Five rapid-fire questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 49% · guest 51%0:00 · Nathan 49% · guest 51%3:00 · Nathan 22.5% · guest 77.5%3:00 · Nathan 22.5% · guest 77.5%6:00 · Nathan 19.2% · guest 80.8%6:00 · Nathan 19.2% · guest 80.8%9:00 · Nathan 54.8% · guest 45.2%9:00 · Nathan 54.8% · guest 45.2%12:00 · Nathan 18.9% · guest 81.1%12:00 · Nathan 18.9% · guest 81.1%15:00 · Nathan 41.1% · guest 58.9%15:00 · Nathan 41.1% · guest 58.9%18:00 · Nathan 46.8% · guest 53.2%18:00 · Nathan 46.8% · guest 53.2%
Sharpest disagreement ▶ 2:39 Guest refuses to disclose capital raised

Kieran explicitly declines to share fundraising metrics and rejects Nathan's assertion that European public corporate filings reveal private round investments.

 Hardest push from Nathan ▶ 8:35 Host challenges SaaS multiple validity

Nathan refuses to accept the business as pure SaaS, warning that institutional investors will discount the valuation for relying on GMV transaction fees.

 Biggest teaching moment ▶ 2:45 Guest clarifies balance sheet rules and internal funding

Kieran corrects Nathan's assumption about mandatory public investment disclosure, explaining that Kumo was funded by liquidity from their sister agency Zero Grey rather than external equity rounds.

 Nathan holds their own ▶ 15:48 Host calculates unit economics on the fly

After the guest claims not to have CAC figures ready, Nathan takes the GMV and take rate parameters to calculate the $20k to $60k customer contract value and 6 to 12 month payback period.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Kumo's Origins and Corporate Spin-Out 6446 Nathan presses Kieran on total funding raised and claims European public records disclose investment figures. Kieran pushes back that standard balance sheet filings do not show round details and explains the liquidity funding from their sister company.
Product Capabilities, Target Market, and Pricing Architecture 4313 Kieran explains Kumo's full-stack product architecture and contrasts their mid-to-enterprise positioning against Shopify and Salesforce. He lays out their implementation fees and GMV-based revenue sharing model.
Business Model Debate: SaaS versus GMV Revenue Share 7437 Nathan directly challenges the SaaS classification of Kumo, arguing VCs will assign lower transaction-model multiples to a GMV revenue-share structure. Kieran defends the model by differentiating B2C demand from fixed-fee B2B contracts.
Take Rates, Enterprise Negotiations, and Client Profiles 5324 Nathan explores the 1-3% take rate and queries whether a massive brand would automatically pay that tier. Kieran clarifies how enterprise clients negotiate custom blended models.
Go-to-Market Strategy: Channel Partnerships and Direct Enterprise Sales 7336 When Kieran admits he does not have CAC numbers on hand, Nathan reframes the issue around capital efficiency and calculates payback economics based on customer revenue yields.
Consolidated Revenue, GMV Milestones, and Zero Churn 4212 Kieran distinguishes consolidated parent company turnover from Kumo's $5M ARR, reports zero churn, and completes the standard Famous Five rapid-fire questions.

Statements from this episode (19)

Disclosure
Kumo funded early development using liquidity from its sister agency
“We hadn't actually raised any finance Up until last year. Because we had our sister company, which was profitable, we've been investing the liquidity through that business in the Kumo software business.”
Kieran Bollard Jan 6, 2020 ▶ 3:06
Assertion Contradicted
Google's EMEA VP Ronan Harris joined Kumo's board
“The MD of Google for Europe. It's just joined our board as well. And VP of Mia, Ronan Harris.”
Kieran Bollard Jan 6, 2020 ▶ 4:22
Disclosure
Kumo is raising a $2M convertible note ahead of institutional round
“So it's a small round of a couple of million that we're taking in with a view to a much larger round.”
Kieran Bollard Jan 6, 2020 ▶ 4:54
Disclosure
Kumo charges $20k to $50k setup fees for 6-to-12 week onboarding
“There's a setup fee, ah, so the setup fee can be anywhere between 20 and 50 K, and that covers the onboarding process, which is typically six weeks to three months.”
Kieran Bollard Jan 6, 2020 ▶ 8:00
Disclosure
UK supermarket giant Morrisons is a recent Kumo customer
“Morrison's is in, you know, the largest supermarket, one of the largest supermarket chains in the UK. Their recent customers just come on board, and that can take six to nine months, right? They're a big nine billion dollar company.”
Kieran Bollard Jan 6, 2020 ▶ 8:10
Insight
Software providers should not take revenue share on existing B2B volume
“So we shouldn't be charging a revenue share on that business because they've earned that business themselves, right? So that's why we do a fixed model in the B to B space.”
Kieran Bollard Jan 6, 2020 ▶ 9:57
Disclosure
Kumo takes a 1% to 3% GMV cut on B2C contracts
“One to three percent.”
Kieran Bollard Jan 6, 2020 ▶ 11:10
Disclosure
Average Kumo clients do $250K to $5M GMV, growing 25% annually
“Most of our customers are growing 25 to 40% in terms of GMV annually. Most of them are, you know, doing between two hundred and fifty and five million bucks a year.”
Kieran Bollard Jan 6, 2020 ▶ 11:57
Assertion Not checkable as stated
Kumo has scaled to about 350 total customers
“So we have about 350”
Kieran Bollard Jan 6, 2020 ▶ 12:28
Assertion Supported
Kumo hired the executive who built Shopify's channel partnership structure
“So we recently actually just hired the head of channel for Shopify and who originally set up the whole Shopify structure.”
Kieran Bollard Jan 6, 2020 ▶ 13:36
Assertion Not checkable as stated
Direct sales currently account for 70% of Kumo's revenue
“But right now, 70% of our sales is coming through direct sales which is, A long sales cycle for mid to large enterprise clients.”
Kieran Bollard Jan 6, 2020 ▶ 14:22
Assertion Not checkable as stated
Migrating enterprise customers from Magento to Kumo takes up to three months
“We have lots of customers who switched and migrated from Magento, for example which would take, you know, six weeks to three months.”
Kieran Bollard Jan 6, 2020 ▶ 14:45
Insight
Enterprise e-commerce sales reps must close 10 to 15 deals annually
“For a sales guy to be profitable in this business, you need to be doing 10 to 15 deals a year. They need to be doing a minimum of 10 to 15 deals a year.”
Kieran Bollard Jan 6, 2020 ▶ 15:32
Assertion Not checkable as stated
Kumo's customer acquisition payback period typically takes 6 to 12 months
“It's between six months to 12 months, Nate, and typically it takes on the payback.”
Kieran Bollard Jan 6, 2020 ▶ 16:05
Assertion Not checkable as stated
Kumo and its sister agency Zero Grey combined generate $20M annually
“Overall the company is turning over about twenty million between Zero Grey, which is our managed service business, and the Kumo business.”
Kieran Bollard Jan 6, 2020 ▶ 16:52
Assertion Not checkable as stated
Kumo generates approximately $5M in annual turnover
“Kumo is turning over around five million.”
Kieran Bollard Jan 6, 2020 ▶ 17:08
Assertion Not checkable as stated
Kumo processed $35M to $40M in GMV over the past year
“The total GMV has been about 35 to forty million.”
Kieran Bollard Jan 6, 2020 ▶ 17:28
Assertion Not checkable as stated
Kumo customers typically retain for a minimum of five years
“It's high cost of acquisition, but they typically stay for five years minimum, and we have customers who are staying a lot longer than that.”
Kieran Bollard Jan 6, 2020 ▶ 17:50
Assertion Not checkable as stated
Kumo's annual revenue run rate was $1.5M one year prior
“Yeah, so we were started off, we were at a million and a half.”
Kieran Bollard Jan 6, 2020 ▶ 18:02
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