Enterprise software firm Chargebee is raising about $150 million at a valuation of $1.4 billion, giving it the coveted unicorn tag at a time when Indian software-as-a-service (Saas) is seeing more aggression from investors than ever before.
The round will likely be led by a fresh US-based investor, with existing backers Tiger Global Management, Steadview Capital and Insight Partners doubling down on their bets, said three people aware of the matter, requesting anonymity.
Chargebee helps businesses—mainly in the US and Europe—manage subscriptions, including billing, invoicing, taxes and payment methods. It provides analytics as well.
Many businesses today prefer to pay monthly fees to subscribe to a niche technology service rather than build it themselves, and some companies have 4-5 such subscriptions, which is where Chargebee comes in.
While managing subscriptions sounds pretty straightforward, Chargebee claims its solutions are sector specific, company specific and beyond just billing, can plug revenue leakage, increase customer loyalty, expand into new categories with the backend ready, and experiment with pricing plans- introducing and removing them quickly, according to its website. Its customers include Freshworks, Calendly and Fujitsu.
Chennai-based Chargebee was founded in 2011 by Krish Subramanian, K.P. Saravanan, Rajaraman S. and Thiyagarajan T. The ongoing round nearly triples Chargebee’s valuation from just four months ago, when it raised $55 million from Insight, Tiger and Steadview and was valued at about $500 million.
"We can't confirm or deny this," CEO Subramanian said in an emailed response to Moneycontrol's queries.
The deal also signals another breakout enterprise software firm for venture firm Accel, which led Chargebee’s Series A round in 2013. Accel’s early SaaS bets include Freshworks and Zenoti- both valued at over a billion dollars, and was one of the first VCs in India to see the enterprise and cloud opportunity.
About 60 percent of Chargebee’s revenue comes from the US, 35 percent from Europe and the rest from Asia-Pacific, said a person close to the company. Chargbee currently has annualised recurring revenue (ARR) of about $50 million, the person added.
“The COVID-19 pandemic has turbocharged digital adoption and Chargebee has been a big beneficiary of this. If SaaS is a big global movement, then Chargebee is SaaS for SaaS. It is enabling this whole subscription economy. They do for SaaS what Shopify does for ecommerce,” said another person close to the company, requesting anonymity.
Moneycontrol exclusively reported on February 15 that Innovaccer, another SaaS startup- also with Tiger and Steadview as investors, is raising funds at a billion dollar valuation. SaaS has also been one of the hottest themes for investors in the US and India over the past year, led by a spate of successful IPOs and the fact that many of these firms continue to grow rapidly even after becoming billion-dollar companies.
This has also led to SaaS valuations zooming from ten times of annual revenue earlier to 25-30 times more recently. The successful IPOs of Zoom, Slack, Cloudflare and Snowflake, among others — on listing day some of these stocks doubled and tripled — have made venture capitalists and private equity funds more bullish about the space.
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