Chargebee – The leading Subscription & Billing Automation Platform Globally! – Mission & Vision, Founders & the Team, Business & Revenue Model, Growth & Challenges Faced, Funding & Acquisitions, Competitors, Future Plans

1. Overview

After the Reserve Bank of India rolled out the rules for doing business in India and made it compulsory to manage e-invoicing compliance compulsorily for businesses with turnover over 20cr from April 1, 2022. Thankfully, Chargebee’s out-of-the-box solutions for e-invoicing compliance and the provision to record TDS have come to the rescue of start-ups & companies to easily navigate these requirements while allowing them time & energy to focus on other value-adding activities for the business.

Chargebee is the leading start-up offering a cloud-based subscription-based platform & automate recurring billing tools for SaaS and e-commerce businesses worldwide. The Chargebee platform offers subscription management and recurring billing services for subscription businesses, among other services like Accounting & taxes management, revenue intelligence & enterprise-grade security.

Founded by a group of tech-enthusiasts namely-Krish Subramaniam, Rajaraman Santhanam, Saravanan KP, and Thiyagarajan T,  in the year 2011, Chargebee has its headquarters in Chennai with its global headquarters in San Francisco USA& a business presence in 53+ countries around the world. Currently, Chargebee is a team of 700+ employees working across its global offices in 21 time zones, and in less than ten years of availability has become the most trusted billing partner for SaaS, Subscription e-Commerce, and Membership Services of various sizes, globally.

After raising funding $125 M in a Series G funding round co-led by new investor Sapphire Ventures and existing investors like Tiger Global, Insight Venture Partners, and Stead view Capital also participated in the round in April 2021, Chargebee became the 11^th start-up to enter the unicorn club, and the valuation jumped to $1.4 B within six months, and presently stands at $3.5B after its latest funding round.

2. Chargebee – About & how does it work?

Chargebee is the subscription management platform that automates revenue operations of various subscription-based businesses from start-ups to enterprises. The SaaS platform helps subscription businesses across several verticals such as e-commerce, IoT, etc. apart from SaaS and grow in terms of revenue through automating subscription, billing, invoicing, payments, and revenue recognition operations and further offers key metrics, reports, and business insights.

By managing the entire revenue lifecycle from the first interaction to the closing of the books each month, empowering businesses to manage compliances & help them in faster decision-making with confidence, Chargebee has been built with a focus on delivering the best experience to provide a seamless & flexible recurring billing experience to customers & manage customer subscriptions.

This unicorn start-up has also recently expanded its offerings and built a unified revenue management platform that has added capabilities to optimize revenue growth with new payment methods and gateways, which supports one-time payments helping businesses to meet local tax and e-voicing regulatory compliances.

3. Chargebee – Mission & Vision

India is one of the fastest growing SaaS ecosystems and the third largest ecosystem globally after the US and China. A study made by Bain & Company suggested that theIndian Software-as-a-Service (SaaS) companies are poised to reach $30 billion in revenue, capturing an 8%- 9% share of the global SaaS market by 2025. It also suggests that over time the investments in the space have increased by 170% over 2020 and are expected to reach $4.5 billion in 2021.

Thus, Chargebee is an innovative a tech-startup working with an aim to help SaaS businesses streamline their revenue operations. By offering solutions specific to the needs of the Indian SaaS ecosystem, Chargebee is on a mission to empower & strengthen the Indian economy through its end-to-end billing solutions that could integrate with APIs, tax services, payment gateways, and more to ultimately strengthen India’s booming SaaS industry.

Chargebee envisions itself as becoming the new age leading provider of SaaS services for subscription & billing automation services to help businesses to grow & enrich their experiences by offering each business the best-in-class infrastructure. The out–of–box solutions offered by Chargebee has not only attracted interest not only from SaaS but also from other sectors such as e-commerce.

4. Chargebee – Story of Inception

Chargebee was founded by its four co-founders – Rajaraman, KP Saravanan, Krish Subramanian, and Thiyagarajan in the year 2011. Krish Subramaniam, the Co-founder & CEO, landed his first job at MatexNet, a tech start-up that built software products using an application service provider model, an early version of cloud-based products, but was struggling to make its ends meet. Krish worked closely with the founder & spent long days and nights shipping products to customers under tight deadlines.

After nearly 10 years of his experience in the B2B software industry, he was offered a long-term opportunity to take an account and build it in the US, something that could have taken 5-7 years easily. It is when he decided to leave the job, and start his own company instead

Something he always wanted to do and talked about with his friend Raja Raman for years. He stated “ remembers “For over seven-eight years, my co-founder & I have been talking about wanting to start up and even saved money to build a company together at some point in time. But, it still took some time, to feel that the time was right and we can take a leap of faith to quit and start”.

He describes that the reason behind the success of Chargebee was its strong team, and how they all came together. While Rajaraman & Krish happened to be batch mates & maintained their friendship since their college days. Thiyagu T. was a roommate of Rajaraman, and KP happened to be Raja Raman’s and Thiyagu’s friend and mentor at Zoho who tried convincing them to stay at the company but ended up leaving Zoho instead and joining as a co-founder.

Together, they started looking for early ideas and explorations like a performance management product with an aim to stumble on a viable product idea. After their extensive study over their decade-and-a-half stint in the B2B SaaS product management and enterprise software management space, they discovered every growing business encountered the need to automate billing for subscription businesses and make payments, and that the absence of appropriate infrastructure led to friction in the business enterprises.

Thus, the founders decided to collectively build a model for a subscription billing platform that could compete with other players in the space such as Chargify, Recurly, and Zuora, a pioneer in the subscription billing space. Chargebee adopted an engineer’s approach to understanding customers’ problems they studied the market and spoke to customers over Skype. Since the Chargebee’s team was a fully-fledged team of professionals, Krish offered to handle all other functions like operations and marketing when Rajaraman, KPS, and Thiyagu fixated on building the product. They targeted their first SaaS product targeted start-ups and SMBs.

Back then, they were also spurred on by the launch of Freshworks (then Freshdesk) in 2010, as the co-founder of Freshworks, and Rajaraman had joined Zoho’s parent company AdventNet on the same day and had known each other, thus, Freshworks acted as a catalyst for Chargebee starting up, and went on to become one of the first customers of  Chargebee.

Today, Chargebee has a business presence in 53 nations with 17000+ clients & millions of users worldwide. Out of which around 50% of the users are from the USA, 30% in Europe, and the rest in the Asia Pacific region. It has shown remarkable growth & progress in terms of revenues and working towards expanding its offerings to the users to have a larger impact in the recurring billing and subscription management space.

5. Chargebee – Founders & the Team

Krish Subramaniam

Krish Subramaniam is the co-founder & CEO of Chargebee. He completed his education at Bharathidasan University, Chennai earning his BE in CSE from the Bharathidasan University in Chennai in 2001. In 2002, he started his career as a Software Engineer in MatexNet Pvt Ltd and went on to work for TCS in leadership positions like Tech Lead & Project Manager for around six years& as a  Tech specialist at Cognizant for almost 2 years before finally co-founding Chargebee. He is also an angel investor and has invested in seed funding for various start-ups like Locale.ai, Therado, and Everstage among others.

Rajaraman Santhanam

Rajaraman Santhanam is the co-founder & COO of Chargebee. Like Krish, Rajaraman also completed his Bachelor’s in CSE from the Bharathidasan University in Chennai in 2001. After finishing his education he worked as a technical professional for Zoho Corporation for close to eleven years, before co-founding Chargebee in 2011.

Sarvanan KP

Saravanan KP is yet another co-founder & CTO of Chargebee. Born & raised in Chennai, he works close to 12 years leadingas Technical Architect at Zoho Technologies before co-founding Chargebee.

Thiyagarajan T

Thiyagarajan T is the Co-founder & Architect at Chargebee. He obtained his Bachelor’s degree from the Madurai Kamaraj University after which he also served a long period as a member of technical staff in Zoho Corporation till Jan 2011 after which he co-founded Chargebee.

6. Chargebee – Business & Revenue Model

Chargebee works primarily in B2B segments while offering subscription management and recurrent billing-related services which help them to make business decisions faster& manage compliances on time through accounting & taxes.

Chargebee has a well-planned profitable business model in place with smart revenue streams & sound cost management practices, which focus on helping businesses of all sizes to run faster, better, and cheaper. Primarily, the start-up generates revenues from the paid subscriptions for the billing process for subscription businesses over different business plans. Businesses may either select to implement a subscription model with recurrent billing by using the company’s platform through their monthly plans or add-ons based on a monthly fee. However, for businesses, earning less than $100,000 in revenue the start-up claims to offer a free plan for smaller businesses, and when these businesses grow in size they eventually switch over to a paid plan.

In offering multi-level subscription plans, this start-up has seen tremendous growth in revenue from over 3,000 customers. The start-up reported a 224% growth in its revenue reaching $115.4M revenue in 2022 as compared to $33.7M & $24M in 2021 & 2020 respectively. Unlike other businesses that were recovering post-pandemic, the startup along with achieving its unicorn status also reported a profit of Rs. 11.5 Cr in FY21.

It boasts of a huge client list of enterprises worldwide such as percona, Doodle, Envoy, Okta, and Freshworks, as well as start-ups like Calendly and Study.com. It also offers a recurring billing engine on top of payment gateways like Stripe, Braintree, and PayPal, providing that one degree of separation from payments and providing the billing intelligence as an EPA layer.

7. Chargebee – Growth & Challenges Faced

Chargebee has disrupted the SaaS industry due to its innovative technologies & user-friendly systems. The start-up claims itself to be highly customer-oriented which has helped them to expand its offerings meet each of its business needs & get success. However, the journey was not a smooth ride, as it faced the following challenges –

The Struggle to be everywhere-While Chargebee’s primary product was built to focus on SaaS businesses, the need to solve solutions for clients from any sector led the company to try and be everywhere. Krish, Co-founder & CEO remembers “We built API of the first product based on our main focus and yet we thought of trying to get anyone & everyone & solve their problem as a customer which was a little distracting from our main focus.

Therefore, the start-up decided to let go of certain segments despite its products having attracted multiple markets, which turned out to be key learning in its early stages. It remained focused on SaaS and SaaS-like businesses which proved to be a  key reason for their success. In the words of the Co-founder & CEO, “The resolve of focusing on the SaaS industry were some of the key learnings that helped us stay focused and it worked well for them and even allowed us to remove certain segments that we did not want to serve.”

Customer Acquisition & Retention-Further, the founders stated that “the introduction of iterations and pricing changes were also scary initially because of the fear of losing customers”. Even then the start-up decided to implement a freemium pricing model where customers could begin with a free model, but then as they record $50,000 of aggregate invoicing, they automatically move into a paid tier.

In terms of growth, Chargebee has witnessed massive popularity & growth in the last few years. In 2012, Chargebee became a Tech30 Company, and even got showcased in YourStory’s TechSparks, which helped it to win believers at an early stage – including some early customers, investors, and employees.

Partnership with Indian Payments Giant Razorpay

In April 2022, Chargebee announced its partnership with the Indian payment major Razorpay in order to offer its billing management services in the Indian market.

As RBI guidelines related to streamlining recurring payments & transformations with the launch of UPI pay have arrived, now businesses with turnover above 20 crores have come under the e-invoicing ambit, thus increasing the scope of business growth & expansion for Chargebee. Thus, the partnership has been optimized to collect recurring revenues across cards, UPIs & Netbanking mandates thus helping merchants to offer preferred payment options to their customers.

Additionally help them to manage regulatory requirements around e-invoicing, GST, TDS & the RBI’s e-mandate. Chargebee has also launched an e-invoicing service with the Spring 2022 Product Release, also featuring increased automation capabilities, ultimately helping the whole process faster, quick, and convenient for many small and large businesses.

8. Chargebee – Funding & Acquisitions

Chargebee Inc, which operates in India through its subsidiary Chargebee Technologies Pvt Ltd, has so far raised $470M in funding over 8 rounds. Its latest funding was raised on Feb 1, 2022, from a Series H round when the start-up raised a sum of $250M from a joint funding round led by investors like Sequoia & Tiger Global Management causing its valuation to jump at a massive value of $3.5B. Here is the highlight of all funding rounds-

Chargebee has made four acquisitions to date to bolster its product framework to enable expertise in its functionalities & offering better services to its customers- Ajira for key product capabilities in entitlements & e-commerce and payments, RevLock, a revenue recognition platform to accelerate automation in billing, BrightBack for improving customer retention and finally startup Numberz to launch its receivables process.

9. Chargebee – Key Competitors

• Zoho Invoice.
• FreshBooks.
• Swipez Billing.
• Quickbooks.
• Stripe.
• Chargify
• Zuora.
• PaySimple

10. Chargebee – Future Plans

In the coming years, Chargebee plans to expand globally and has set its sights on new verticals to grow its business. For which the start-up is investing money to acquire clients from other industries, such as the Internet of Things (IoT), ed-tech, and e-commerce, to capitalize on the situation created by the sudden onset of the pandemic. It is also heavily investing in research and development and launching innovative services and resources as it works to acquire new clients and is hiring aggressively to expand its expert team. Further, the start-up has also stated that it plans to utilize the funds to expand its global operations and add to its partnership network.

According to certain reports, Chargebee is planning to go public in the coming 3-5 years after hitting certain milestones however the start-up aims to do so only after hitting some internal goals which include bolstering leadership, and diversifying its products portfolio across key segments, and entering important markets. It has already made a NASDAQ listing at a $13-billion market valuation at the close of listing day in September 2021. With all its plans on its bucket list, the future seems bright for Chargebee.