The pandemic has created massive opportunities for the entire subscription business market. More businesses today are utilising software-as-a-service (SaaS) solutions to enable remote work, while consumer demand for subscription services in e-learning, entertainment, and utilitarian deliveries have skyrocketed, reported Chargebee – a subscription billing and revenue operations platform.
According to MarketsandMarkets, the global subscription & billing management market size is expected to grow from $4B (approx €3.3B) in 2020 to $7.8B (approx €6.6B) by 2025, at a Compound Annual Growth Rate (CAGR) of 14.0% between this period.
Raises Series F
Now, with plans to capture the global businesses – that are turning towards the subscription-based model, Chargebee has raised $55M (approx €46.6M) in its Series F round of funding. The round was led by Insight Partners.
Existing investors Tiger Global, Steadview Capital, and Accel Partners also participated in this round. With this, the company has raised a total capital of $105M (approx €89M) to date.
The current round of investment coincides with the global surge in businesses from startups to enterprises deploying subscription services. Hence, with the raised capital, Chargebee will be enhancing its product and integration ecosystem to enable these businesses to experiment and launch increasingly sophisticated revenue models.
Chargebee was founded by four friends – Krish Subramanian (CEO), Rajaraman Santhanam (COO), KP Saravsanan (CTO), and Thiyagarajan T. Their goal was to simply build an organisation that truly put people and customers first. Each of them had individually worked on SaaS-based products and realised a common pain point – they (businesses) had to reinvent the core revenue infrastructure each time.
While the subscription model was still just growing, by 2011, the team realised that they had stumbled upon a massive blue-ocean problem. That’s when they founded Chargebee. The platform automates revenue operations of high-growth, subscription-based businesses.
Its SaaS platform helps SaaS, eCommerce and subscription-based businesses manage and grow their revenue by automating subscriptions, billing, invoicing, payments, and revenue recognition processes as well as provides key reports, metrics, and insights into their subscription business.
The company is used by over 2,500 businesses globally, including biggies like Freshworks, Pret-a-manger, and Study.com.
Talking about the measures taken by the company to be GDPR compliant, Krish Subramanian, co-founder, and CEO of Chargebee tells Silicon Canals, “First, as an organisation, Chargebee has very strict GDPR compliance policies in place – including our own data handling, privacy, and communication management.”
“Second, as a data handler for our customers, Chargebee offers GDPR compliance capabilities within the product – including mechanisms for how businesses on Chargebee use their end customer information,” he adds.
Back in 2011, subscription-based business models were mostly associated with cloud-based software. The biggest challenge was to convert the market to invest in a revenue platform that would scale with their growth.
Chargebee first automates the entire lead-to-ledger and order-to-cash workflow for a subscription business.
By automating billing, pricing management, schedules, invoicing operations, and tax management it lets fast-growth businesses invest in their product without getting distracted by operational plumbing. As per the company “by creating a business-user first experience, it gives businesses the ability to launch, experiment, scale, and adapt their entire subscription business model rapidly.”
Subramanian believes that “a steady SaaS-i-fication of the market is already underway, with traditional businesses replicating the best practices of SaaS pricing and business models even outside the realm of software. Subscription businesses today have to be ready at all times to identify and leverage market opportunities rapidly.”
Growth & competition
The company has seen a 100% year-on-year growth in customers and revenue. It has a 160% dollar retention rate, which implies that the average business on Chargebee is able to consistently stay on hyper-growth year on year as well.
Chargebee’s revenue model is closely tied to its customers’ success. “Our revenue model is based on a percentage of our customers’ revenue, creating an inherent forcing function for us to invest heavily on our customers’ growth,” says Subramanian.
Talking about the impact of the COVID-19 pandemic of Chargebee’s business, he notes, “The pandemic has created massive opportunities for the entire subscription market. More businesses today are utilising SaaS solutions to enable remote work, while consumer demand for subscription services in e-learning, entertainment, and utilitarian deliveries have skyrocketed.”
Chargebee considers Zuora and Recurly as its immediate competitors. According to the company, here’s what sets it apart:
- Largest global footprint: Businesses on Chargebee can scale and service customers in 150+ countries
- Business-user first product: Chargebee is designed to help businesses quickly iterate, experiment, and adapt strategies with close to zero developer dependency
- Deep Techstack Integration: Chargebee integrates with all the solutions a business requires in its revenue & finance tech stack today, and as it scales tomorrow
Charging into Europe
In comparison to any other revenue management software provider in the category, the company has the highest global footprint with customers, with businesses across North America, Europe, Asia, and Australia, processing over $3B (approx €2.5B) in revenue and servicing end-consumers in over 160 countries.
Back in 2019, when the company had raised $14M (approx €11.8M) in its Series D round funding, the company expanded its operations to Europe and announced the opening of its European headquarters in Amsterdam, the Netherlands.
“Europe could be one of the fastest-growing markets for subscription services, as well as a hotbed for next-generation subscription-first organisations.,” believes Subramanian.
“With its multitude of languages, compliance, regulations & taxation and compliance regulations (including local invoicing rules, EU-VAT calculations, and GDPR), European businesses have an increased need for an easy, secure and scalable solution that elegantly handles these aspects,” he adds.
According to the company, the reasons for choosing Amsterdam as its European headquarters are as follows:
- Amsterdam has one of the most open and transparent systems to incorporate and set up operations in Europe
- With a large number of startups and technology companies already in the country, Amsterdam has world-class talent
- Amsterdam’s culture and environment encourage innovation and creativity. As some of the greatest artists, creators, and businesses have their roots in this city
“We will continue to expand into new geographies. Europe is a major focus for us, and we will continue to invest in Europe. Additionally, we will invest in creating an even larger global footprint in APAC and other regions to enable businesses anywhere to be able to compete in the global market,” mentions Subramanian.
Image credits: Chargebee