We're Raising $3.5m in Funding: Here is the Valuation, Term Sheet and Why We're Doing It

We’re super excited to share some big news today. We’ve decided to raise more funding for Buffer, and in line with our value of transparency, we want to share absolutely everything about it. On top of that, we haven’t closed the funding round yet and if you’re in a position to invest, we’d love to have you.

You probably have a ton of questions about this, so let me try and answer some of them here by giving the full context of how we came to this point. If you want to know anything else, drop a note in the comments below!

The Buffer story so far, and our key metrics

We started Buffer almost 4 years ago. It’s been quite an incredible journey, from a bedroom in Birmingham in the UK and generating $1k per month in revenue, to generating almost $400k per month today.

We were lucky to have some great investors put money into Buffer 3 years ago when we raised our seed round. At that time, we really needed the funding to grow the team faster and meet the demand we were seeing from customers.

A lot has happened since then. Over the years, the product has evolved into a full social media publishing and analytics platform with a lot of power. The team has grown to 24 incredibly inspiring people. We ended up traveling the world by accident, working from Hong Kong, Israel, South Africa, creating a culture of working from wherever in the world makes you happiest and most productive.

One of the most exciting parts of our journey so far has been in pushing the boundaries of how transparent companies can be, both with team members and with the wider public of customers, users, blog readers and other entrepreneurs. We now feel a duty to continue to be fully transparent about everything we do, always finding areas we can be even more open.

In light of this focus on transparency, here are the latest Buffer stats:

• 1.8m users have registered for Buffer.
• 165k users are active on a monthly basis (shared at least one post).
• We have 28k paying customers on the Awesome or Business plans.
• Annual Recurring Revenue (ARR) is currently $4.6m. We’re generating around $385k a month.
• The team is 24 people, spread all across the world.
• That means Revenue Per Employee is around $181k.
• We have a strong focus on culture-fit and sometimes it means firing great people who have different values.
• All our SaaS metrics (LTV, churn, etc.) can be seen at our Baremetrics dashboard.
• We share the salaries of the whole team in this spreadsheet. Our salaries are $175k (Joel) and $161k (Leo).
• In our last round we raised $450k in funding at a $5m valuation and investors so far have owned around 14% of the company.
• We have $1m in the bank and have been profitable for the last 6 months.

 

We’ve been very happy with our progress to date. While the graph looks like a clear upward trend, things have not necessarily always been smooth. We’re lucky to be part of a great team and it’s been a combined effort to be at this stage. We will be working very hard and hope that things will continue to grow in the same way, but it is worth noting that if you choose to invest in Buffer that these numbers can’t guarantee future success or a return.

Why raise funding when we have $1m in the bank and have been profitable for the last 6 months?

W

via open.bufferapp.com