Opinion
Agrawal believes pure software recruiting fails without a human element
“We don't think that's going to work. What we think is going to work is sort of a humans combined with good technology, kind of like what compass is doing, what Atrium is doing.”
Insight
True recruiting churn requires clients to have active open roles
“If they have an open role, they're hiring actively, they're just not using you. That's the real definition of churn in this space.”
Opinion
Platforms like Hired stalled because VCs forced the wrong operating models
“We've seen too many companies in this space fall flat, you know, whether you look at Hired or others, Where things stall because they don't have the right partner and the right partner pushes that into an operating model that doesn't work for this industry.”
Assertion Not checkable as stated
Agrawal: Rocket maintains a 2% to 3% annual revenue churn rate
“You know, typically over the last couple of years, our churn has been anywhere from two to three percent.”
Assertion Not checkable as stated
Agrawal: Rocket grew 240% YoY in recent 2019 quarter
“2019 quarter that just closed versus the 2018 quarter, that was the growth rate, was two 40%.”
Disclosure
Rocket operates its entire business without dedicated salespeople
“We don't have any salespeople today. No.”
Insight
New agency recruiters typically take three to six months to break even
“Typically it takes a recruiter Anywhere from three to six months before they start paying off.”
Disclosure
Agrawal: Rocket aims to open 5 to 10 US offices next year
“Next year, if all things go well, I'd love to open sort of five to 10 offices in the U S because it is a local market, right? You do need to be in market to talk to customers and back to candidates.”
Disclosure
Agrawal: Average Rocket customer pays $80K to $100K annually
“They're paying us about 80 to a 100,000 a year.”
Disclosure
Agrawal: Rocket charges 20% to 30% placement fees per hire
“Our typical percentage fee is anywhere from 20 to 30% of first year base salaries, so they're getting anywhere from three to four hires, a little bit lower if they're in the Bay Area or New York City and the comp is higher a little bit more if, you know, we ha…”
Disclosure
Agrawal: Rocket targets $7M to $10M for its next funding round
“I think we're going to target somewhere from seven to ten million in the next round, but it all depends on the market conditions.”
Assertion Not checkable as stated
Agrawal: Rocket currently serves about 100 customers
“We have about a hundred customers.”
Disclosure
Agrawal: Rocket gets more growth from full-stack recruiting than SaaS
“More from the full stack model where we charge as a percentage of salary.”
Disclosure
Agrawal: Rocket employs 30 people, two-thirds recruiters and one-third product
“We have about 30 people. About two thirds of the team are recruiters. A third of the team is product and engineering.”
Assertion Not checkable as stated
Agrawal: Rocket is already essentially cash-flow positive
“So we're basically cashflow positive already.”
Assertion Not checkable as stated
Accounts receivable forms Rocket's largest working capital financing need
“Net contracts are net 30, but payments end up being sort of net 60, net 90. So the biggest thing I'm financing is actually my receivables.”
Disclosure
Agrawal: Rocket holds $1.6M in cash from $2.9M raised
“Out of a 2.9 we raised, we have about 1.6 in the bank.”
Assertion Supported
Agrawal: Typical recruiting agency achieves 5% to 10% net margin
“The typical agency makes five to 10% net margin.”
Disclosure
Agrawal: Rocket targets 60-70% gross margin and 30-40% net margin
“Today we are targeting anywhere from 60 to 70% gross margin. So our goal We can ideally be a 30, 40% net margin business.”
Assertion Not checkable as stated
Rocket built its MVP in under three months for under $60,000
“So it's not really fair to say we built it on very little amount of money, but I think our MVP was out within you know, two or three months. So if you, and we have two or three engineers, so all under like 50 to 60 K.”
