We followed up with YouSendIt this week after hearing the company had raised $4.7 million from Alloy Ventures, Cambrian Ventures, and Sevin Rosen. We’ve written often about web-based file transfer companies, and note competitor Pando got some favorable coverage from the AP today, which points out Pando gives out 1 GB for free while YouSendIt charges for anything over 100 MB (YouSendIt used to give out a free gig prior to August).
YouSendIt Ivan Koon followed up on our interview request a little later than we’d hoped, but he was full of interesting stats. He did confirm the funding report was accurate, and that YouSendIt has raised more than $10 million in total. The Mountain View-based company has 2.5 million registered users (100,000 signups per week) and 9 million visitors per month. It expects to make $1 million in revenue this year, based on advertising, and has 12,000 paying users distributed across subscription and a-la-carte options. But the company is pretty large — 43 employees at this point — so it’s not breaking even.
Another competitor, DropSend, has made subscriber and revenue numbers public because creator Carson Systems is selling off the product. They are much smaller. But this is a crowded market, and companies will have to offer more specialized services to get by. For instance, MyFabrik, which launched this week, is focusing on digital media and provides embeddable player widgets (also with 1 GB free). See our previous coverage. VentureBeat reports MyFabrik has raised $12 million in financing.
YouSendIt, whose customers come from small businesses, most often creative services and advertising agencies, thinks it can stand out by 1) cutting distribution deals with software providers (for instance, a mail application or photo editing tool) to be their preferred “courier service,” and 2) adding content management tools, for a sort of web-based version of Documentum.
Even at minimum wage, YouSendIt’s burn rate would be over $10 million/year for 43 employees? With only $1 million in revenue, how will they be able to stay afloat?
If 12K out of 2.5 million accounts are paid, their conversion rate is about 0.5%. This means for 100K weekly signups, they are getting 500 paying customers. Assuming linear growth, they’ll be up to 40K paid subscribers by the end of next year, which translate into just $3-4 million in revenue. Still a long way from breaking even given the head count?
James:
I think your calculations w.r.t burn rate is incorrect. Even at 100K/employee/year, would result in a burn rate of 4.3M/year.
Why would a company like yousendit need 43 employees? I really think all of these ‘2.0′ companies are spreading their resources too thin while bringing in way too much manpower. I mean, if history tells us anything, its that 2 kids in a garage can do a lot more than a gang of techs with millions in funding.
We will launch http://www.room31.com at the beginning of next year; online storage (1 GB for free) with web-desktop UI.
They have a large development center in India which must count in the 43.
Yeah, you need to check your math. Minimum wage is $5.75/hr (they’re in MV, not SF), which @ 2080 hours per year is $514k. But we typically estimate a fully burdened average salary for startups to be $120k per person per year, or $5.16M.
However, I do agree that 43 people sounds like a lot, though offshore development changes the calculation significantly.
FilePost can send up to 250m file, and has much functional feature and easy to use.
http://file-post.net/