Subscription and recurring billing tools provider Chargebee today said that it raised $125 million in series G funding co-led by Sapphire Ventures, Tiger Global, and Insight Venture Partners. With the fresh round of capital, which values Chargebee at $1.4 billion post-money, the company says that it plans to increase its investments in  expansion and partnerships, setting the stage for an IPO.

The pandemic accelerated the shift to software-as-a-service (SaaS) and subscription-based business models, with companies expecting a 12% compound annual growth rate from recurring revenue over the next five years. By some estimates, 40% of ecommerce revenue comes from repeat purchasers — streaming music subscriptions alone generated $19.1 billion in 2018. But only 32% of online bills are made on a recurring basis, while the remaining 68% are one-time payments.

Chargebee’s platform automates things like funneling users toward plans and collecting payment information, as well as executing upgrade or downgrade billing adjustments and facilitating recurring subscription renewals. For tasks it can’t handle automatically, Chargebee enlists human agents through customer relationship management dashboards from Zendesk, Salesforce, and NetSuite while guiding customers through a customizable checkout experience.

Courtesy of integrations with Stripe, Braintree, WorldPay, and PayPal payment products, customers using Chargebee can pay with digital wallets like Amazon Pay and Apple Pay; with credit or debit cards; or directly through their bank accounts. Chargebee supports over 480 recurring billing use cases, with more than 20 payment gateways across over 50 countries. And the platform is available for upwards of 120 currencies and payment methods in dozens of languages.

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Above: Chargebee’s dashboard.

Image Credit: Chargebee

Chargebee features a range of pricing schemes including variable and usage-based pricing, and the platform is able to renew billing cycles based on sign-up or other dates. Chargebee can also selectively route payments and currencies in keeping with predefined rules. The platform’s optional Smart Dunning feature algorithmically susses out retry logic across days and times for failed payments.

On Chargebee’s backend, managers get a visual customer organizational chart that allows them to define payment and invoicing responsibilities. They can also access templatized reports and KPI dashboards with metrics such as subscription revenue, discount, bad debt, and add-on metrics, all of which feed into accounting platforms like NetSuite, Intacct, and Xero. Teams receive real-time notifications if any tracked goals meet or exceed expectations or the team is in danger of falling behind.

“Chargebee is the only solution in the space to include a ‘simulation engine’ as part of the product called TimeMachine. TimeMachine allows a business to simulate their subscription and billing configurations and analyze the potential response to external conditions,” a spokesperson told VentureBeat via email. “With capabilities like this businesses are able to assess the impact of their pricing, revenue recovery, and billing logic proactively. Chargebee also offers features like smart dunning capabilities which automate revenue recovery processes to maximize collections, while minimizing the cost of payment failures due to hard declines.”

Customers and competition

Chargebee competes with publicly traded Zuora and with ReCharge and Recurly, which create and maintain software subscription-based service solutions for businesses. But Chargebee is evidently doing something right — its customers include Okta, Freshworks, Calendly, and And Chargebee claims to have a net retention rate exceeding $150.

In fact, Chargebee claims to have the largest footprint of any revenue management provider in its segment, with businesses in 160 countries across North America, Europe, Asia, and Australia processing billions of dollars in revenue. The company’s user base has grown to more than 3,000 paying customers and over 20,000 companies across SaaS, direct-to-consumer ecommerce, over-the-top streaming, elearning, and publishing, and Chargebee says it is continuing to benefit from a “global surge” in subscription services deployments. A report from Zuora suggests 22% of companies have seen their subscription growth accelerate since the start of the pandemic, particularly in categories like video streaming and digital news and media.

“The pandemic has opened up opportunities for us as a business.  Some of our customers have even been successful in pivoting their business models and offerings to the market, [and] we are proud to have enabled these shifts in decisions and support our customers through these turbulent times, only opening more doors of opportunity,” the spokesperson said.

Chargebee’s latest investment round was led by Insight Venture Partners, with participation from existing investors. It brings Chargebee’s total funding to date to $230 million, following a $55 million round in October 2020.

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