Founded in 2011, Chargebee is an invoice billing and subscription management tool for SaaS companies. It is a cloud-based software that allows subscription-based businesses to manage subscriptions and automate recurring billing.
How does Chargebee makes money is a question we often get. This is an important question to ask and even more important to be able to answer with confidence.
Chargebee operates on a SaaS business model. Chargebee makes money from paid subscriptions of its software that simplifies the billing process for subscription businesses.
Here’s all you need to know about the business model of Chargebee, how it charges its customers and generates revenue.
Chargebee is a platform that provides subscription management and recurring billing services for subscription businesses around the globe. Supporting over 100 forms of currency, the company helps businesses construct, oversee and automate subscriptions, billing, invoicing, and payments.
It easily integrates with more than 25 payment gateways while supporting over 150 countries. There are over 3,000 active businesses that are using Chargebee, which include companies like Freshworks, Linux Academy, Fujitsu, among others.
In doing this, Chargebee has made the process quick and convenient for many small and large businesses.
Chargebee generates revenue from their paid subscription plans. For a monthly fee, businesses can implement a subscription model with recurrent billing by using the company’s platform. In offering multi-level subscription plans, the company has generated revenue from over 3,000 customers.
Business Model of Chargebee
Chargebee is making waves in the industry stemming from its innovative technology and user-friendly systems. However, this is not all that the company hopes their reputation to consist of. They are very customer-focused, noting that their growth is determined by how well their customers succeed.
Companies find success when using Chargebee because what would typically be performed manually is replaced by the platform’s valuable software. Customers save time, energy, and money thanks to Chargebee. This has allowed the company to create a name for itself in the industry.
The company believes in assisted buying rather than face-to-face selling, according to CEO and co-founder Krish Subramanian. They focus on providing a product or service that the customer can see the value in for themselves.
The company’s stats speak for themselves as users of the platform have seen an increase in revenue by 125 percent.
Subscription management is a useful practice for budding and seasoned businesses alike. Chargebee helps businesses retain and expand their customer base with their advanced software.
Here are a few of the many tools that Chargebee offers with the subscription management program:
A major benefit to subscription management with Chargebee is their variation in pricing models. The company offers tiered pricing, quantity or volume pricing, flat pricing, and more.
Testing these models is an important step towards growing revenue, and Chargebee is committed to helping businesses find their way.
Sales and Marketing
Subscription management with Chargebee also includes help with sales and marketing techniques. They provide software that delivers efficient discount and coupon management.
With Chargebee, users see an increase in revenue as they easily create and track discounts and coupons.
Additionally, the platform offers gifting subscriptions which allow users to deliver gifts on a recurring basis.
For example, instead of business owners gifting their employees annually, they can do so quarterly or however often they choose. Gifting subscriptions is a lucrative technique to earn and retain customers in a way that’s fun for all involved.
Self-service Customer Portal
With Chargebee, users can give their customers ultimate independence as they navigate their platforms or mobile applications. Using their self-service portal, customers can make changes or updates to their accounts, pause or reactivate subscriptions, and more.
Chargebee eliminates the need for customers to speak with a representative or worse an automated phone system. This is convenient for customers, and also saves businesses from hiring staff to perform duties that customers can do themselves.
Many businesses are drawn to Chargebee’s ridding of manual billing and invoicing in favor of automated operations. They make taxing duties such as overseeing recurring payments, calculating taxes and fees, and usage tracking more convenient.
Using their innovative software, the company also provides a simpler way to structure customer accounts with their account hierarchy tool.
Watching the money roll in can be fun, but a lot of times is more difficult than necessary.
Chargebee has integrated over 23 payment gateways into their program, along with supporting more than 100 different currencies. In addition to credit and debit card payments, the program accepts a variety of payment platforms including Google Pay and Stripe.
Accounting & Taxes
The company helps users stay within compliance with their accounting and taxes program, helping them expand to new markets. Chargebee shoulders the burden of figuring destination tax for users selling internationally using their automated system.
Additionally, Aayush Patel of Fishburners says that his accounting department saves 32 hours per month using Chargebee’s advanced accounting program.
Reporting & Analytics
The Chargebee platform provides custom, advanced reporting and analytics to help businesses navigate how to earn and retain customers. Users can monitor customer retention, engagement, and growth using Chargebee’s innovative data tracking software.
The company also provides customized reporting and analytics based on whatever data the user deems important to their business.
How Does Chargebee Make Money?
With a majority of individuals remaining at home due to the COVID-19 pandemic, Chargebee found an increase in interest.
More than ever, people are finding it safer to shop online, pay their bills online, and entertain themselves online. The pandemic hastened the transition to Saas and subscription-based business models.
According to a VentureBeat report, companies expect a “12% compound annual growth rate from recurring revenue over the next five years”.
Chargebee makes money from businesses that purchase their paid plans. The company also offers a free plan for smaller businesses earning less than $100,000 in revenue. However many of these businesses grow in size and eventually switch over to a paid plan as well.
Chargebee offers support to small businesses that are new in their journey. With this plan, users receive the basic essentials to help get them started for no monthly fee. Supporting up to six pricing models, users have access to features like a secure checkout, dining, and credit note issuance.
This plan is only applicable to start-ups earning less than $100,000 in annual revenue. With time, plenty of businesses grow to surpass this amount yet want to continue with the Launch plan. In such cases, Chargebee begins billing them at $99 per month with a 0.5% overage fee.
With this plan, customers pay the lowest set price of $249 monthly. In exchange, they have access to all of the valuable tools and resources found in the Launch plan plus more.
Additional features include a custom domain with advanced analytics, a customer portal, sales tax automation, and multi-language support.
Their largest plan offers the same features found in the previous packages for businesses earning annual revenue of $1.2 million.
For $549 per month, users can receive user role management, multiple payment methods, advanced invoicing and so much more.
With this plan, businesses can optimize the company software to drive their bottom line to its highest potential.
The Enterprise plan is a customizable plan that allows businesses to decide which features most fit their needs.
In this plan, users receive all that is included in the Scale plan plus any additional features of their choosing. Users can speak with a Chargebee representative who can offer advice, support, and quote pricing for customized plans.
Every business is different, and Chargebee is equipped to provide products and services to meet every business need. Each of these plans is curated to deliver the ultimate value to the customer.
Chargebee Funding, Valuation, and Revenue
In their series A funding round in 2014, the company raised $800,000 from investors, according to FreshWorks. A year later, the company raised more than five times that figure, totaling $5 million. With this money, the company planned to employ more staff to expand efforts to drive more users to the platform.
Additionally, the company received $18 million in Series C funding in 2018. This funding round was led by notable investor Insight Venture Partners. Chargebee would then go on to earn over $1.5 billion in revenue the following year.
The company was initially funded by three major investment partners: Accel Partners, Tiger Global and Inside Ventures. Together they raised 25 million dollars in capital by 2019. Noting their growing success, many more investors decided it wise to be a part of their journey.
This year, the company was able to raise $125 million in their series G funding round. Thanks to investors Sapphire Ventures, Tiger Global, and Insight Venture Partners, Chargebee earned a $1.4 billion valuation. This is three times what the company was valued at only six months prior in their series F round.
With their newly acquired valuation, the company was able to achieve “unicorn status”. This is a coveted title defined as a privately owned start-up earning $1 billion in company valuation. Chargebee was also crowned 11th unicorn of India, claiming to be the largest revenue management provider in its segment.
The company has earned a total of over $230 million in funding to date. It is becoming increasingly more likely that their trajectory is to surpass that in the coming years. And though exact figures are unknown, the company has claimed to have doubled its revenues in the past 12 months.
Is Chargebee Profitable?
Chargebee has a well-designed profitable business model with smart revenue streams and sound cost management practices. Their focus is on helping businesses of all sizes run faster, better, and cheaper.
Founded in an apartment in Chennai, India, Chargebee has come a long way from its humble beginnings. With its customer-centered mission, the company has earned the respect and trust of thousands of businesses.
With their newly earned unicorn status, Chargebee is proving their business model to be one for the books.
Conclusion: How Does Chargebee Make Money?
We’ve explored how Chargebee makes money, its business model, revenue sources, and all the important aspects of its model. To sum up, ChargeBee works on a SAAS model that relies on monthly/annual subscriptions to make money from its users.
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