Chargebee, a smart subscription billing platform, on Wednesday announced that it had raised an $18 million Series C round led by Insight Venture Partners, with participation from existing investors – Accel Partners and Tiger Global Management.
Story so far
Chargebee was founded in 2011 by KP Saravanan, Krish Subramanian, Rajaraman Santhanam, Thiyagarajan T. Today, the startup consists of a team of 135 employees operating out of offices in Chennai and San Francisco. Krish Co-founder & CEO at Chargebee noted,
Four-and-a-half years ago, our first customer made the choice of adding a layer of separation between their product and payments by using Chargebee’s billing intelligence. Today that choice, along with thousands of others’, stands validated more than ever.
Chargebee notes that it currently has over 7,000 customers at different stages of growth, across 50 countries. ChargeBee is also a YourStory Tech30 2013 alumnus and had raised two rounds of funding from Accel Partners in 2014 and private angel investors in the US in 2012.
Then in March 2015, it secured $5 million in a Series B round led by Tiger Global with participation from existing investor Accel Partners. Krish noted that their growth has been a testimony to the promise of the subscription world. He said,
It gives me particular satisfaction to have played the role we did in helping early stage startups in the past two years. In February 2016, when we rolled out our freemium model, it was to make a case for small businesses to begin billing with us instead of building an engine themselves.
Related read from 2017- How Tech30-alumnus Chargebee scaled and adapted to cater to 53 countries
Krish also shared some numbers and noted they had helped process over $65 Million USD of invoices by early stage companies for free. He estimated that Chargebee paid-forward approximately $1 Million USD in doing this, but that stands dwarfed in comparison to the impact of these global businesses that were being built with Chargebee.
Sector overview and future plans
According to a report by Research and Markets, the subscription and billing management market was estimated to grow at CAGR of 15.7 from from USD 2.90 Billion in 2016 to USD 6.01 Billion by 2021.
The subscription and billing management software has provided advantages to users in the form of reduced initial setup cost, multiple options for payment processing, automated invoicing, and accurate and efficient billing process.
However, there have been concerns about deployment and usage as they involve involve maintenance cost and require timely upgradations, which increases the organization's budget. Moreover, security is one of the major restraints in the adoption of cloud-based subscription and billing management solutions.
North America is expected to hold the largest market share and dominate the subscription and billing management market from 2016 to 2021. On the global front, Stripe is one of the leading players in the payment space and also offers recurring payment options. Some other prominent players in this space include include, Chicago based Braintree which was acquired by Paypal and Bengaluru based Razorpay.
Krish noted that the latest Series B round is a shot in the arm for Chargebee to reimagine billing systems, and build out the product and service that enables both businesses and in turn, their customers.
Insight Venture Partners, based out of NYC, is an active investor in a number of companies including Shopify, NewRelic and Wix. Harley Miller, VP at Insight Venture Partners, said in a statement,
Chargebee delivers a broader and deeper subscription billing management solution built for both non-technical business users as well as developers. As a firm, we are long on recurring revenue businesses. Chargebee is poised to capitalize on this trend, as its solution is both robust and easy to use for SMB and enterprise clients alike...
Krish also noted that Chargebee's customers had been active partners in their growth by being quick to adopt as they rolled out new features and also providing them with feedback on even minute details.
In the process of obsessing over the finer details of billing and payments for businesses, Chargebee was able to identify two gaps to fill.
- Delivering great experiences is not one person’s job. It takes a team. Chargebee should enable your entire team irrespective of what function/expertise they hold.
- Billing systems need to enable relationships, not just subscriptions. Chargebee should help you forge stronger customer relationships and not just be transactional in nature.
Krish noted that these realizations continue to define their product roadmap as they continue building billing system for the modern business users.