Earlier this month, Chargebee, a San Francisco and Chennai-based software-as-a-service (SaaS) startup, raised raised Techcrunch Chargebee raises $55 billion to help businesses move to subscriptions Read more $55 million. The new funding round was led by reputed investors like Insight Partners, Steadview Capital, and Tiger Global. It took the nine-year-old startup’s total funding to $105 million.
What made this round notable was that it was inbound—the investors approached the company rather than the other way round. At a time when many companies have been decimated by the Covid-19 pandemic, this might lead you to believe that Chargebee is one of those textbook, gilt-edged startups with marquee founders, a magical product, and a compelling vision.
You would be wrong.
Chargebee offers a subscription billing solution, which allows companies to generate invoices, and track billing and renewals online for their customers. To the casual observer, this might not look like a complete product offering. Instead, it seems more like a feature that most payment gateways would offer.
And they do.
The most notable being Stripe Stripe The Ken Stripe Inc will need a new set of stripes for India Read more , the American payments giant that offers Stripe Billing Stripe Billing Stripe Stripe launches Stripe Billing to accelerate boom in subscription-based businesses Read more as a feature within its platform. Stripe isn’t just any other “BigCo”—it’s the proverbial 800-pound gorilla in the payments domain. With a valuation valuation CNBC Stripe raises $600 million funding round at valuation of $36 billion Read more of $36 billion, Stripe is Silicon Valley’s most valuable privately-held company.
Yet, Chargebee has not just survived, but thrived. It employs more than 450 people and claims to serve over 15,000 customers in more than 50 countries. It processes billings worth over $3 billion each year. While the company declined to provide revenue details, industry sources peg Chargebee’s annual recurring revenue (ARR) run rate at over $30 million, and doubling year on year.
Chargebee’s startup story is unusual in many ways: an atypical origin, early missteps and, most of all, a lesson on how to survive and win against a behemoth rival with a feature that’s directly competitive.
Solving a boring problem
Whether it’s media, e-commerce, edtech, or software, a subscription business is more than just about raising invoices and collecting payments. There are a number of complexities involved.