Chargebee, the SaaS platform for subscription billing and revenue management has recently made it to the Unicorn Club in 2021. After its latest round of funding, the company has reached a valuation of $1.4 Billion and is a strong presence in the Subscription billing industry.
Chargebee- About The Company
Co-founded in 2011 by the team of Krish Subramanian, Rajaram Santhanam, Saravanan KP and Thiyagarajan T, Chargebee is based out of Chennai and is a part of the Subscription billing business. They cater to online services like OTT Platforms, e-learning, publishing and shopping websites that range from startups to enterprises.
Their clientele includes brands like Okta, Study.com, Freshworks, and thousands of growing businesses that operate on a subscription basis. They are present across the world in over 60 countries, but most of their users are present in the US as well as the European market. Recently, the share of subscription services in India has also increased, thereby increasing their presence on home turf as well.
The Business Model
The Subscription Billing is based on small, regular fees rather than bulk payment upon purchase. Users pay smaller amounts in regular intervals to avail services. This model is adopted by ISPs, Streaming services, apps like Spotify, Shopping websites and many other platforms.
Subscriptions are also gaining popularity, with Garner predicting that three-quarters of companies that sell directly to customers are likely to adopt subscription models by 2023. This is mainly because the model has exclusive benefits like better revenue estimation capabilities, a steady influx of payments, better customer engagement and is overall more convenient for platforms that have regular users.
Chargebee is piggybacking this rise by assisting these firms to track, bill and record their revenue. They employ Revenue recognition to track the company income from customers over the subscription periods. Though subscription payments are collected upfront, the revenue is only recognized when services are rendered during the period of subscription.
Chargebee – The Growth Curve
The growth of the company started slow, with the first four years of the venture being dedicated to figuring out the right path for improving upon the initial plans. Today, the company is climbing towards success, hitting a revenue rate of $33.7 Million in 2021. The year over year revenue growth is at 40% and boasts 3000 corporate clients.
In their latest Series G funding, Chargebee has managed to raise over $125 Million. This is their biggest round since the previous Series F, where they amassed $55 Million. Series G has pushed their valuation to $1.4 Billion, and the round was led by existing backers Insight Capital and Tiger Global, as well as new investor Sapphire Ventures.
The company plans on growing its existing team from 500 to 900 employees to meet the growing demand and expanding its global presence, to bring more clients into the fold.
The journey itself as well as building a better product takes priority in their business model. By concentrating on building an overall better user experience, Chargebee aims to attract more services into the Subscription business model, and in turn, their company.