Climatta: Planet Vs. Money

Lisa: Welcome to The Pitch where startup founders raise millions and listeners can invest. I'm Lisa Muccio.

Josh: And I'm Josh Muccio. Changing things up this morning. On the show today, we have Iñaki with Climatta. He's raising 750K.

Lisa: So people care about the planet, right?

Josh: In theory, yes.

Lisa: No, they don't. You know what they care about?

Josh: What?

Lisa: Money. People care about money.

Josh: That's true. I mean, we want to care about the planet. But we're just not incentivized to do so.

Lisa: Especially if it's a huge corporation.

Josh: Enter today's founder Iñaki, who is an outdoorsman. He cares a lot about the environment and wants to sneakily save our planet by helping large corporations save money on their energy bills by way of hundreds of millions of dollars. The question is, can saving the planet be a venture scale business?

Lisa: I mean, in theory, it's a big planet.

Josh: The pitch for Climatta is coming up after this. And if you wanna join us for the live taping of season 16, we are gonna be in Tampa this April. Learn more about our upcoming show at Pitch.show/Tampa.

Lisa: And if you're a founder, apply to pitch at Pitch.show/apply.

BREAK

Welcome back to the pitch for Climatta. Let’s meet the investors.

Elizabeth Yin with Hustle Fund

Can I ask you a very direct question?

Jesse Middleton with Flybridge

I am so sick of people that are building stuff for building stuff's sake.

Laura Lucas with L’attitude Ventures

You are everything I am looking for in a founder

And Mike Ma with Sidecut Ventures

Cmon guys, like, what kind of risk are you looking for? You don’t want to overthink a deal.

Iñaki: Hello everybody. Hi.

Mike: Hi, how are you?

Iñaki: How are you?

Elizabeth: Elizabeth

Mike: Hi, Mike.

Iñaki: Iñaki

Elizabeth: Nice to meet you Iñaki.

Iñaki: It's a pleasure.

Laura: Hi

Iñaki: How are you guys?

Laura: Good, good.

Jesse: Welcome.

Iñaki: Thank you. So my name is Iñaki and I am co-founder and CEO of Climatta. The first and best memory that I have being outdoors is going duck hunting with my dad. When I am 11 years old, I wake up at three in the morning to get all of the things into the truck, and then we drive just one hour away from home. When we get to the lake, the energy of all of the hunters is incredible. It's pitch dark, and in order to get to our spot, we have to get into a canoe. The average temperature is five degrees Fahrenheit and we have to break the ice.

Elizabeth: Oh wow.

Iñaki: As we are crossing through the lake

Elizabeth: Where is this?

Iñaki: One hour away from Mexico City. It's pitch dark. You can't see anything and all you can do is hear how the ducks start flying all around you. And when the sun rises and we are in our spot, there are so many ducks that they look like a swarm of mosquitos. Fast forward 11 years. it's the last time that I go in this adventure with my dad, and everything has changed. The lake is very shallow. It doesn't have enough water. We were at five degrees Fahrenheit, right now we are at 44. Instead of having a bunch of ducks, there are only mosquitoes. And that's when I decided to do something about climate. Outdoors is my happy place trekking, horseback riding, hunting, whatever, it's the place where I feel the most at home, and I want more people to be able to enjoy what I have been able to enjoy with my dad and with my friends. Now. The thing is that us as individuals don't have very much impact. And organizing 9 billion people is gonna be very complicated, right? But 40% of global carbon emissions come from the built environment. The biggest chunks of those emissions come from the energy consumption. And I want to ask you a question. If you proactively know how to read your utility invoice, and do you actually check it every single month or just pay it away?

Jesse: Just pay it.

Laura: Just pay it.

Elizabeth: Just pay it

Mike: Somewhere in the middle.

Iñaki: Somewhere in the middle.

Jesse: You're a numbers guy.

Mike: I also have teenagers who leave air conditioning on for completely obscene times.

Iñaki: Well, this happens exactly the same with companies, and today they're overspending more than $300 billion a year. And all of the inefficiencies are hidden in their utility invoices, which is why we co-founded Climatta. I believe that sustainability has to change and has to be seen as a way to optimize cash flow rather than an expense. So do you want to see what we have built?

Elizabeth: Yeah.

Mike: Love it.

Iñaki: Amazing. How everything works is that with a single setup that takes 30 seconds to do, we connect directly with the utility providers. In less than 2-5 minutes, we're gonna be able to extract up to 24 months of historic data and analyze it and present different improvement plans for energy efficiency, tax deductions, and transition to renewable energy.

Mike: This is at this is at the end consumer residential level. I'm looking at

Iñaki: it's, no

Mike: Or I'm looking at this. Am, am I using this as a..

Iñaki: You are using it, it as a hotel brand

Jesse: Commercial customer

Mike: Commercial customer

Iñaki: Commercial real estate, manufacturing facilities and stuff.

Mike: Thank you.

Elizabeth: Okay.

Iñaki: Exactly.

Elizabeth: So what we're looking at right now is, you can see, the price for the energy as it fluctuates over time, and also the energy usage as it fluctuates over time by the months. I guess one question that I have is: when you make recommendations, where is that, because I think we all conceptually understand, we use a lot of energy sometimes and we don't use much energy at other times, but how do you kind of solve that in here?

Iñaki: Here what we do is that we correlate the energy consumption with the average temperature where the asset is located. So when they have an HVAC, the correlation of the energy consumption with the temperature outside, it's one-to-one. So companies can have predictability on how much they will be spending during the summer and during winter. And where we aim to focus right now in the improvements are in three basic areas. Their utility taxes, in Mexico at least, out of like 9,000 invoices that we have collected, less than 600 are being correctly deducted. So companies are leaving a bunch of money in the Mexican IRS. Then, the power factor, if you don't consume your energy efficiently, you can get penalized with up to 100% of your utility invoice. And that can be corrected with changing the operations and giving other type of recommendations without having to install a bunch of hardware that is gonna be very expensive.

Jesse: And so how are you getting that level of insight how do you know what I'm deducting then or not from my taxes? Or how do you know, the sensor data if you're not pulling that in?

Iñaki: All of this information, preliminary information is gonna be hidden in the utility invoice. You get how much kilowatt hours you are consuming on peak, off peak, mid peak, the power factor. It's like if an accountant could read your bank statement and is, or, do the P&L and you, they are gonna identify where the leaks are. It's doing something very similar. It's like an energy accountant, so to speak.

Jesse: And so do you need access to other, I'll take the Mexican IRS example, like do you need access to that information in order to tell me whether or not I was deducting or are you just assuming that most people were not-

Iñaki: With just the invoice we can verify if it's being deducted or not.

Jesse: Got it.

Iñaki: Yeah.

Jesse: Okay.

Laura: So you get the invoice from the power company

Iñaki: Directly from the company

Laura: Okay.

Iñaki: Yeah. With a single setup that takes 30 seconds to do, we connect directly with a utility provider, extract all of the data, analyze it, and present it. So we are currently saving like six months of manual work, because it can take up to six months to collect just one month of data for bigger companies

Elizabeth: And how are you logging into all the utilities? Like do they, like all through APIs using people's credentials or are you doing it more scrappily?

Iñaki: Yeah. The thing is that the industry, it's very archaic and

Elizabeth: yeah

Iñaki: They don't have APIs. So that's, that’s where we aiming to solve. Right. Working with the data is not the problem. Collecting it is. So we build the data scrapers in order to sync, extract, analyze all of the information.

Elizabeth: Yeah. Yeah.

Mike: Can you gimme a sense of what the net economic impact, so you have six months of work saved, but what are some of the size of the deductions, that money that people are leaving on the table? Can you quantify some of that?

Iñaki: Yes, of course. For example, we have a customer that is in the retail side and we found $1.2 million in leaks. Just for tax matters. We have another customer that their power factor penalties were around 750,000, and we were able to identify all of this in five minutes, 10 minutes, maybe less.

Mike: How are you acquiring these customers? How are you doing sales and go to market?

Iñaki: Cold outreach. Right now our existing customers have been starting to recommend us with their peers. But the first customer I was pitching with just a Figma, and three months after doing these pitches, we closed a pilot with 7/11. Pepe, my co-founder, I called him and I was like, okay, I'm gonna try to delay the most amount of time, the deal, so you can start working on developing the app. You know, and everything was very scrappy. I mean, when we say that we were syncing, Pepe was behind like logging in and

Jesse: Fake it till you make it.

Iñaki: Fake it till you make it. Yeah, exactly.

Elizabeth: I think that's great. So now I guess, where are you with your customers? Like how many do you have? And-

Iñaki: Right now we have five paying customers. All of them are in the enterprise side, in manufacturing, commercial real estate, retail,

Jesse: What's the model, the pricing model, and, and what's the average, how are they paying?

Iñaki: That's a great question, and the thing is that we have been experimenting with this with different monetization schemes. The first one, we were just charging a fee per utility invoice collected. Eventually when we start embedding the software, they lacked of predictability, right? And one month we could be charging $2,000. The next one $500 and the next one $4,000. So in order to change that and to not have any problems with budget, we moved on to a SaaS fee. Right now our average contract value is of around $18,000, for the SaaS, but being able to identify all of these leaks and saving potential, right now we are also trying to charge a success fee based on the savings that we can help them generate.

Elizabeth: And once somebody has figured out all their leaks, and obviously there are more leaks that show up, but like, are there sort of diminishing returns for a client?

Iñaki: We haven't gotten there yet, that's something that we need to optimize. Of course. I mean, once we maximize like their efficiency, what's the upsell? And something that we have been doing is adding other modules that can add value to other business units. For example, there is a customer that requested a, an expense management module. If we can create that workflow and we get a cut out of it? That's a great business, because all of our customers spend between $3 to 5 million a year in energy alone.

Mike: You have five customers and the sectors were all manufacturing, retail, et cetera. Which one are you going to do? Who do you think is the best customer of where you're gonna be spending time?

Iñaki: Manufacturing.

Mike: Okay.

Iñaki: I had a, this initial thesis that it would be like retail stores and commercial real estate. But manufacturing facilities spend so much money in electricity that right now these are the guys who are adopting the technology the fastest.

Mike: Can you share a story in your go to market that confirms that thesis?

Iñaki: Yeah. Right now we have, the biggest playing card manufacturer in the world working with us. We have, one of the biggest poultry farms in the US and in Mexico, and we are working with a tire manufacturer and retailer.

Jesse: So when you did the outreach to the playing card manufacturer. What did you sort of pitch them? What, what really hooked them?

Elizabeth: And who did you do that to?

Laura: Yeah.

Elizabeth: Like what kind of person-

Iñaki: Who the ICP was?

Laura: Yeah. Yeah.

Iñaki: Is the chief sustainability officer in that matter. And what I did was ask for help, right? So it was like, Hey, Iñaki, I hope that you can help me out, reach out to the person who is doing this? Do you know who that might be? If he's the key decision maker. He confirms that he is and he is like, okay, let's set up a call and let's discuss what you have to offer. If it's not him or her, they send me the email and the person who I need to reach out. And then I create another sequence that it's a more warm intro that this guy told me to reach out to you

Elizabeth: Recommended you.

Iñaki: Yeah, exactly.

Elizabeth: Yeah. Yeah. So basically then at any of these companies, you're reaching out to somebody in senior leadership, it doesn't matter who because then you-

Iñaki: Exactly.

Elizabeth: But ultimately, who is the decision maker from your learnings?

Iñaki: The CFO.

Elizabeth: Okay.

Iñaki: And the COO, even though that the chief sustainability officer lives the pain, they don't necessarily have the budget and they have to go with the COO to tell them how everything works and how they will work for them as well.

Elizabeth: So it's strictly a money decision?

Iñaki: Strictly a money decision, yeah. A hundred percent.

Mike: The payback is ridiculous, right? 18K ACV $1 million savings.

Iñaki: Mm-hmm.

Mike: You don't have to be a math major to figure out, or a finance major. What's preventing you from going to CFOs in your go to market?

Iñaki: Right now, hands in the team. We are four people and we don't have enough time to do the customer success, the outreach, the keeping up, the pipeline, but we have been validating with the CFOs as well. And just as you said, you know, it's like the risk is very low. The outcome can be huge for everybody, so why don't we just try it out?

Jesse: Can you talk us through the longer term software? I know we sort of asked this question, but like you log in and then it says, here's a million dollars in savings you could have done. Now what do I do after? I'm like, great, I, would I call you? What, I pick up the phone. I'm like, okay.

Iñaki: Yes. So right now what we are doing is we're dividing it in different stages. If you just want the data, we charge the SaaS fee. If you want us to help you identify the savings we are charging, the last two offers is of around 3% of finding the leaks. And if you want us to implement them, it's another 3% of the success fee. And it's based on results.

Elizabeth: But just to be clear, you have not yet tried the success fee model, right?

Iñaki: We have just sent it right now to three customers because we started iterating like one month ago

Elizabeth: And they said yes?

Iñaki: I hope so.

Elizabeth: Oh, okay.

Iñaki: I hope so.

Jesse: You hit send, they haven’t received it

Elizabeth: Iñaki, can you talk a little bit about your background? Like if we talk about before the company, what were you doing? How do you know your co-founders, stuff like that.

Iñaki: Yes. So I met my co-founder seven years ago in the acceleration program of Plug and Play. Each one of us with our previous startups, I used to have a fleet and fuel administration system. That didn't go well. Honestly it was an amazing experience because I had a lot of learnings, but it was also something that I had to live in order to know that I wanted to do something else rather than just like build a software. I want to build something with purpose. Right? After that I worked at a consulting firm, then this very big sustainability consulting firm adopted me as their entrepreneur in residence to validate everything. So thanks to them I was able to start pitching to 7/11s and to all of these big guys and validate the model.

Jesse: And are they investors in this business?

Iñaki: No. They wanted to just to, see us grow. It was like, I can give you equity. Do you? No, I want to see you grow, my friend. So, and I met him-

Jesse: There are good people in this world.

Iñaki: There are good people in this world. 100%.

Elizabeth: So, you said that you were doing cold outreach, but how many of these companies came in because of the warm relationship with this consultant?

Iñaki: No, no, no. It was just using their name. But all of the effort, I mean, they taught me how to do the outreach. This message, I didn't invent it for myself. I mean, they gave me like all of the playbook. And it was like, Iñaki, here's the deadline. You have to sell something by the end of the quarter.

Elizabeth: And, and so all of these sales came in during that time or no?

Iñaki: No, just the first one.

Elizabeth: Just the first one?

Iñaki: Yeah. Eventually they say, okay, you have validated something. It's time for you to grow and move on.

Elizabeth: And when was all of this?

Iñaki: May 2023

Elizabeth: Is when you were working at the consulting company?

Iñaki: Yeah. The first paying customer that we got was in September, October, and then we incorporated in February of last year. And then in September we got accepted into Techstars.

Laura: Which one?

Iñaki: Miami.

Mike: Maybe that's a good segue. Like what, what are you raising right now? And what

Jesse: And what have you raised post-

Iñaki: Yeah. Perfect. So right now we are raising $750,000 and so far we have signed, committed and wired 310.

Mike: And what are the terms?

Iñaki: 5.5 million post-money valuation.

Jesse: And you had raised the Techstars money was the only other money that you raised.

Iñaki: Yeah

Jesse: Okay.

Elizabeth: Can I ask you an A-hole-ish question?

That’s coming up after this.

Elizabeth: Can I ask you an A-hole-ish question?

Iñaki: Absolutely, please.

Elizabeth: So you started working on this in May, 2023 and got your first customer in September, 2023.

Iñaki: Yeah.

Elizabeth: So it's been almost two years. And you are now just shy of a 100K per year in revenue.

Iñaki: Yes.

Elizabeth: What do you think some of the challenges were in why the revenue is relatively low given the time period?

Iñaki: Yes, that's a great question. I think that there are two factors. One is the market that we were initially pursuing, Latin America and emerging markets. You can't price exactly the same as here in the US. I have customers that my competitors here in the US have reached out to them and it's like, it's insane. I don't have that budget. Also one thing that we have been aiming, is growing more the North Star metric that is processing invoices, because that gives us a lot of data. And that data helps us build the product and eventually retention and expansion of use of the software. And as we have kept the team very small, we can't do everything and anything at the same time.

Elizabeth: I totally get that, you know, having run my own startup as well. At the same time, I do think though that the market expectations are that there are also a lot of other small teams that are able to achieve a fair bit. Now, I think part of what I'm trying to assess here is it's, I don't think it's just about the team and how fast they move or whatever. Some of it also has to do with the market. And I'm also trying to understand, like, do these customers just move very slow?

Iñaki: Yes. Yes. They move slow. And by reaching out first to the chief sustainability officer, we have to knock a lot of doors, right? To get to the decision maker who is the COO or the CFO. Also we are looking how we can help the mid market, not just very big corporates, that the decision making can take forever. But by doing these other experimentations, by collecting all of this data, I think that we can be building something for the mid-market that can accelerate the decision process by reaching out directly to the owner.

Mike: Talk to me about the, the competitive moat and landscape? Is there a world in which someone else could build the same API integrations? And, and, and do the calls of data, correlate against public records, and generate the same output?

Iñaki: Working with the data is not a problem. Collecting it is. Right. So that's, right now, is our main differentiator.

Mike: The, the normalization. Okay.

Iñaki: Exactly. Exactly. But stage two, we are building some sort of network effects because we're connecting with different solar panel companies and with other consultants and with other people that they are just adding value to the whole network. Right. So we are not just embedding the solution into the business operations, but we're also aiming to add more value into a one-stop shop solution. Because one of the things that have happened is like, okay, I have all of this data, to whom should I reach out to? And we make it stupid simple.

Elizabeth: Iñaki, I really love what you're doing and I think you guys are really scrappy. You've done a lot with a little bit. I have seen a few other companies in this space and I, you're not the only ones who kind of have this sales sort of set of roadblocks.

Iñaki: Mm-hmm.

Elizabeth: I think this market is just very challenging. It's not due to a lack of trying, just, from what I've seen, and I think for that reason, I'm out.

Iñaki: Okay.

Elizabeth: I hope, I hope you knock this outta the park.

Iñaki: Thank you

Jesse: Yeah, I, I struggle with the repeatability of this product, this plat- this, I think it sounds like a no-brainer that somebody would pay you $18,000 to save a million dollars. Like no question in my mind. I worry that in year two, year three, year four, once you've said to me, you know, you can take this deduction on your taxes. I'm like, okay, team and accounting. Like, take the deduction. If you don't do it, you're fired. So like, just go take the deduction. As opposed to paying you the next year for that. And I worry that there's a dwindling sort of rate of return on that.

Iñaki: Okay.

Jesse: You may get beyond that to some of the things you talked about, but I think in this early stage, I'm not sure I see it yet. And so for that I'm gonna pass now.

Iñaki: Okay. Thank you.

Laura: So I love what you're doing. I love it so much that we've invested in a company in a very adjacent space, and they're a little bit ahead of you. So for that reason, I'll have to say no. Sorry.

Iñaki: Okay.

Mike: I'm sorry to add to the chorus, but I'm, I'm a pass as well. But I want to give you some feedback on this in terms of like, I, I love what you're building and the world needs what you're building. If I had to build and add some color to it, it's just thinking, this idea of market pull versus market push.

Iñaki: Yes.

Mike: Market pull gives you a unique insight that you can not only just live and thrive, but continue to, to grow in that area. And then, a time to come back to someone like is when you start that process and de-risking that a little bit to show that you have some unique advantage for for all manufacturing, poultry farmers. We are the best. 'cause we understand the io, bio, bioorganic, like when you have a unique insight that you find that there's some place to live and you're getting real market pull in that area find that. Where like you have a right to win and the tech builds around that, and that, that would be where I would encourage you to steer that. But that, for the lack of that, that's why I'm a pass.

Iñaki: Okay.

Jesse: Iñaki, thank you.

Iñaki: Thank you for your time.

Mike: Thank you so much for building what you're building.

Laura: Yeah

Iñaki: Thank you.

Mike: It’s incredibly important.

Jesse: Cheers.

Iñaki: See you around guys.

Mike: Best of luck.

Iñaki: Thank you.

Elizabeth: Thank you.

Josh: Well?

Laura: It's always a bummer it feels like, so, Debbie Downer, right?

Elizabeth: Well, I was hoping I could give him some thoughts on what direction to take this in, but I really could not think of anything. I mean, you may know better than I, but

Laura: Yeah.

Elizabeth: I think there's actually a lot of luck in whether you get to product market fit, but the question is when you figure out that whatever you're doing is too slow. There's always this existential question of do you continue pounding the pavement? Or do you try to experiment with new ideas? And my intuition is on this, he should experiment with something adjacent, just based on hearing this. But you know, obviously we didn't dig into exactly how he's doing his sale. Like is he doing outreach to 2000 companies, uh, a week and it's not working? Or is he doing outreach to like one company a week and it's slow? Like, we didn't go into that, but my intuition is, it's probably not a lack of trying, and I would look for something new

Jesse: I, I also think there may be something more like fundamental the pitch as I heard it was like, this should fly off the shelves. Like every CFO should wanna spend 18,000 to save a million dollars. Like I just, I don't understand the, the disconnect.

Elizabeth: But you know, like thinking about it, like, big corporates, like, yeah, okay, they could save a million dollars, but like there are 20,000 people at these companies, more than that, maybe 200,000 people at these companies. And it's like, no one's really incentivized to care. Like who's incentivized to care? The CFO maybe. But if you're going through this roundabout way, uh, and he probably can't go directly to CFOs because he's doing cold emails. He doesn't always have everybody's correct email address or whatever, and the person who responds is the sustainability person 'cause that person resonates with the mission. But then you have this like, long roundabout thing. So I just don't think human nature is set up to care in this regard.

Mike: I'm not sure this is a venture business today. Right? Like I think it could be a perfectly awesome lifestyle business to go around and hack this thing out and figure out, and to your point, like, to save companies a couple hundred thousand dollars, roll up money and, you know, generate a free cash flowing business that generates a couple million dollars a year, they have five people. Like it could do really well. It could do a lot of good in the world and I think he could build a great business. When we put the venture parameters on it, I think this is where it falls down a little bit and maybe out of the go to market learning as he builds a lifestyle business or continues on a vector, you have an insight or a particular ICP like, alright, now I need to get funded for this aspect of it. But that, that was what I just kept doing. It sounds wonderful, but I'm not sure it's venture scale yet, and it doesn't need to be to do the thing that he talked about he wants to do with the duck hunting pond at 3 in the morning, you know?

Elizabeth: But I think part of it also is he's probably running out of money just given he has a few people on his payroll and they only make 90,000 a year. Where is he gonna get that money to sustain the company for now?

Laura: Well, and, and he needs more, the company that we're invested in, it, it just has a ton more offering.

Mike: Something doesn't add up. $90,000 generating millions dollars of savings.

Jesse: He worked for a sustainability firm. This is what they do. We, we paid millions of dollars to sustainability firms at the big companies I worked at, manufacturing,

Mike: Sure.

Jesse: As well as real estate. And we spent millions of dollars to pay people to do this.

Laura: Yeah, yeah

Jesse: And so if you can do all of that with only software and no people, there's a clear path to that. So there's

Mike: Totally

Jesse: To me, there's some disconnect there. That was my point. Less so that it's easy to sell a CFO. I get it. There's a lot. But if it's truly as magical as it sounds

Mike: Yeah

Jesse: It would be selling more.

Elizabeth: Yeah. I mean, maybe that's the sales challenge. Like he, if he's not raising external funding, the way to kind of make this work is, pitch it as consulting, charge the big bucks.

Mike: Exactly.

Elizabeth: And then do tech enabled as much as you can in there until you productize like enough to be able to kind of do something more product based.

Jesse: Yeah.

Laura: Yeah.

Mike: Exactly. Totally agree with that. But when you hear things like, we're in retail and manufacturing, playing cards and poultry, and it's like. Okay. Well, somewhere in there has to be a product.

Elizabeth: Well, those are probably the people who responded.

Mike: And that's the problem. Right. And again, it's not a problem. It's only a problem once we put the venture lens on it you know? But from, if you had a friend that said like, I have these five clients from poultry to playing cards. They generate a couple million, million dollars in revenue. I'd be like, dude, you're crushing it. Like amazing.

[yeahs of agreement]

Josh: In the words of my friend Mac Conwell, the math ain't mathing.

Laura: Or the venture ain’t venturing?

Josh: The venture ain’t venturing. That's great. All right. I think we'll, we'll wrap on that.

Jesse: You take out that bullhorn and let us know.

Josh: I will let you know

Josh: Yep we tracked down the VCs this season with a bullhorn.

Lisa: And it worked.

CALLING ALL VCS, RETURN TO THE PITCH ROOM

Josh: After the break, we track down Iñaki. No bullhorn involved, just a calendar invite. That’s coming up.

[break]

Welcome back! It’s been six months since Iñaki pitched VCs on that fateful day. We caught up with him to see what happened since.

Josh: Iñaki! How was your experience pitching on The Pitch?

Iñaki: It was an incredible experience. I mean, it was my first time being in a studio and seeing like all of the cameras and being interviewed. And getting to meet such amazing people. I mean, meeting you guys in person, meeting all of the founders, all of the VCs. All of the people there was incredibly smart. The conversation never ended. I don't know. I had such a good time.

Lisa: You're right. Everyone was like working on their own startup in their own - somebody's over at that table taking a call and someone's over here walking on their phone and like everyone's just like doing their thing, hustling and grinding, and there's an energy to that that just makes it exciting.

Josh: It was like a popup co-working space.

Lisa: Yeah. Yeah.

Iñaki: Mm-hmm. Exactly. People fighting for the wifi.

Lisa: Fun fact, actually our next event will be at a coworking space because of that.

Josh: Yeah.

Iñaki: Oh. Nice. That's gonna fix a bunch of technical problems, so to speak.

Josh: Okay. Iñaki, what was your biggest learning from the pitch room?

Iñaki: We have to stop pitching Climatta sustainability platform. It's a way to generate more revenue if you optimize your operating costs. You increase your profit margin, you improve your cash flow. Because sustainability feels the pain, but they don't have the capability of signing. And finance have the capability of signing, but don't feel the pain. So if we can translate all of that into, instead of kilowatt hours and metric tons of CO2 into money, into dollars, it's doing well by doing good and I think that that's where the impact it's being seen.

Lisa: Okay. So on the show you were raising 750k. And I think you had 310K in the bank. Have you raised any additional funding since then?

Iñaki: We didn't. We stopped raising funds because we still have a bunch of months of runway. We're generating some revenue. So before giving up more equity on something that we are not ready to scale, it's like, go back to operating the business, see what's working, see what's not. If you have to change the ICP, if you have to iterate on the product, do so and then go way more solid to the market and seeing, oh, these are all of my lessons from the past year, six months, we change this. We're seeing this outcome. We are now ready to scale.

Lisa: Yeah, that makes a lot of sense. Where are you at with customers right now?

Iñaki: Right now we have two new customers in the infrastructure segment. I know that we have to go in deeper to one specific cohort of customers. Right now we're working with some retail companies that are requesting more modules that are adding way more value. So until we find that PMF on that side, we want to continue exploring these other verticals because it's the same product at the end of the day.

Lisa: Yeah. It makes me actually think of your company as way earlier than what I kind of pictured it being.

Iñaki: I completely agree. I thought that we also had something way more solid on that piece. But I mean.

Lisa: it's okay.

Iñaki: It's. It's okay.

Lisa: This is what a startup is.

Iñaki: Exactly. Exactly. Yeah. Strong ideas. Weakly held. Right. I believe that we had this, but I mean, at the end of the day, if we need to move somewhere else and adapt and I don't know, it's,

Lisa: yeah.

Iñaki: That's the name of the game.

Josh: Yeah. When do you think you'll have the learnings you need to go back out and raise more money?

Iñaki: I expect that by September.

Josh: It looks like you just made up that date right now.

Lisa: Josh!

Iñaki: No, no, no, no, no. I was, I was trying absolutely honest. I was trying to see my calendar over here because of the summer that VCs don't reply at all.

Lisa: Yes.

Iñaki: Once they come back we continue conversations with them.

Josh: Yeah. Do you still actually want to go the venture path? For Climatta?

Iñaki: Yes.

Lisa: Oh,

Josh: Why?

Lisa: Tell us why.

Iñaki: Because I want to build something very big. We didn't choose this path as a lifestyle business. I want it to be massive or die trying, you know? But not just be like in the middle.

Lisa: Why do you wanna build something big?

Iñaki: Hmm, that's a great question. I want, I, I want to do something very impactful. I mean I don't want to just stay with my arms crossed and wait for someone else to do what I wanna do, you know?

Lisa: Yeah.

Josh: Yeah. Actually, we're gonna be giving out an award for the best story this season.

Iñaki: Okay.

Josh: Best use of story in opening pitch goes to Iñaki with Climatta.

Iñaki: Yeah, that's amazing

Josh: Your story about going duck hunting with your dad was really impactful and drives the point home. It really helped you stand out in the casting process. And I think it was my favorite part of your pitch and alongside this award goes a gift card to Outback Steakhouse.

Lisa: What? Weird. No, I would not send anyone to Outback.

Josh: Sorry, I was going full on raffle mode

Lisa: Oh my gosh. No, I remember. I hadn't heard your pitch since you'd gone through pitch coaching and I was like, oh my gosh. That is. So good. Like it was very impactful. It was so good.

Iñaki: Oh, I really appreciate it, guys.

Lisa: Yeah

Iñaki: Very thankful for the opportunity. a hundred percent.

Lisa: So I know we gave Iñaki the best pitch story award.

Josh: You're gonna take the award back, aren't you?

Lisa: No. No. He gets the award for best story, but story alone will not get you money in The Pitch Room.

Josh: You gotta have a business there. The story should pitch the future, should pitch the vision, which Iñaki does a wonderful job of. But then you need to be able to ground that big vision with a, where are you today and what have you accomplished?

Lisa: Yeah.

Josh: And then that gives investors faith to be able to believe, okay, this grand vision you painted, it's rooted in a person who knows how to execute, knows how to build. Like, okay, I'm ready to go on this journey with them. Unfortunately, I think the second part of that, Iñaki’s not quite there yet.

Lisa: I think as an investor, you're looking for that one piece of information that feels like the unlock. Like, oh, you figured out go to market. You figured out sales, you figured out the ICP. You figured out who the customer is, who you're selling to. You figured out something here.

Josh: Something's magical here, yeah

Lisa: That nobody else has figured out. And that's why I'm gonna bet on you. And it felt like the investors went through this whole list of questions and they couldn't find the unlock in any of the questions that they asked. That's what I saw in this pitch.

Josh: I think that's spot on.

Lisa: I'm really excited for Iñaki that he has unlocked who he needs to sell to directly. Right, which is the CFO

Josh: Instead of the sustainability officer.

Lisa: Yes. Yeah. He just needs to like gain momentum in that area.

Josh: Yep. Excited to see what he can do when he goes out and fundraises again in September

No offer to invest in Climatta is being made to the listening audience on today’s show. But you can invest with us by becoming an LP in The Pitch Fund. We’re raising fund 2 right now! To learn more, go to the thepitch.fund

Next week on The Pitch… the ghost of VCs past

Mike: Can I ask a personal question?

Marco: Yes.

Mike: Like, you made all these changes. You knew that was the thrust of a lot of my firm's feedback on it. Why didn't you call?

Marco: I sent you an email. you were on holidays

That’s next week! Subscribe to The Pitch on your favorite podcast player so you don’t miss future episodes. You can watch full length versions of every pitch over on our Patreon at The Pitch Uncut.

And if you’re a founder raising a pre-seed or seed round you can apply to pitch on season 16! We’ll be taping in Tampa, Florida this April. Send us your deck at pitch.show/apply.

We’ll see you next week, in the PITCH ROOM.

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This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, and Enoch Kim. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, The Firmware Rebels, Boxwood Orchestra, Our Many Stars, Hayward, and Peter Jean & The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.