India's Chargebee closes Series G, hits $1.4b valuation

The investment – which also featured Steadview Capital – values Chargebee at $1.4 billion. It follows a $55 million Series F led by Insight last October. The company has now raised $230 million to date, with Tiger Global, Steadview and Accel Partners among the other existing investors.

Founded as BubblePath in 2011, Chargebee provides online subscription businesses with software-as-a-service (SaaS) tools to automate invoicing, taxes, accounting, and email notifications, as well as billing and payments through gateways like PayPal. This facilitates rapid expansion into new markets.

The company claims to have the largest global SaaS footprint in terms of payment, billing, and tax management coverage. Its globally distributed team of more than 600 serves over 18,000 customers. There is a tiered pricing model, whereby users are not charged for a basic suite of services until they invoice $100,000. After that, the higher the tier, the more customized the service.

Krish Subramanian, co-founder and CEO of Chargebee, observed in a blog post that there has been a fundamental shift from investing in in-house billing infrastructure to outsourcing. Increasingly, companies recognize that flexible billing systems can accelerate development. The average business on Chargebee is said to double its revenue every 18 months.

“The last few years, and 2020 particularly, have fundamentally redefined the expectations from a subscription billing system. It’s no longer the final piece of the puzzle that needs to be hacked; instead, subscription billing has become the core revenue infrastructure that lets businesses unlock hyper-scale and stay agile to respond to markets, come rain or shine,” he said.

Subramanian added that Chargebee has the fastest time-to-ROI (return on investment) of any company in the subscription billing category. The new capital will go towards R&D and scaling the business globally.

Bain & Company projects that India’s SaaS industry will generate $18-20 billion in annual recurring revenue (ARR) in 2022 for a global market share of 7-9%. This compares to $5-6 billion, or 3-4%, in 2019. Most of the revenue will be generated by start-ups that supply software to a global customer base, led by the US.

In this sense, Chargebee fits a familiar profile: founded by an Indian team, has a sizeable presence in India, yet is domiciled in the US and primarily serves US clients. Speaking to AVCJ in February, local GP Iron Pillar estimated that 26 of India’s 59 technology unicorns are SaaS providers that hit big by targeting global markets. 

US-based Sapphire, previously a unit of SAP, started looking for enterprise opportunities in India in 2007. It backed Newgen Software Technologies, but the company didn’t go public until 2018, held back by difficulties cracking the US market – it got more traction in Eastern Europe, the Middle East, and Latin America – and an immature talent base.

“In product management, 80% of what you do is understanding the customer and building something that they want, and 20% is figuring out something the customer doesn’t articulate but needs. The DNA wasn’t there in India because most product managers grew up in BPOs [business process outsourcing] and just took orders,” Jai Das, a co-founder of Sapphire, told AVCJ in February.

In the last five years, Sapphire has seen the market take off. The firm has invested in two other Indian global SaaS unicorns: enterprise cloud platform developer Nutanix and business analytics software provider Thoughtspot. Nutanix went public on NASDAQ in 2016.

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• Topics
• South Asia
• North America
• Technology
• Expansion
• India
• USA
• enterprise software
• Growth capital
• Tiger Global Management
• Sapphire Ventures
• Insight Venture Partners