Chargebee Raises $250M at $3.5B Valuation

Chargebee, investment, funding

Subscription management platform Chargebee has reached a valuation of $3.5 billion following a $250 million funding round, Reuters reported Tuesday (Feb. 1).

This round, led by Tiger Global and Sequoia Global, more than doubles Chargebee’s value. The company was valued at $1.4 billion last year after raising $125 million in venture funding.

The company says it will use this latest funding for product innovation, global expansion and corporate growth initiatives.

Founded in Chennai, India, by Krish Subramanian and Rajaraman Santhanam, Chargebee’s clients include both startups and high-profile companies, including, software maker Freshworks and Gwyneth Paltrow’s lifestyle brand Goop.

“There is room for a lot of innovation in the B2C (business to consumer) side. In B2B, subscription is the norm,” Subramanian told Reuters.

While business-to-business (B2B) initiatives make up about 70% of Chargebee’s volumes, it has begun adding more clients on the B2C side, fueled by a rise in eCommerce activity.

“We believe every company will be a subscription company in the future. The predictability of a subscription business model is extremely attractive,” said Sequoia India Managing Director Tejeshwi Sharma.

Read more: Subscription Platform Chargebee Acquires Brightback

Last month, Chargebee acquired customer retention platform Brightback, a move the company said combines “two best-in-class platforms to maximize revenue growth capabilities for global customers,” and follows its recent acquisition of RevLock, a revenue recognition firm.

“During the pandemic, we saw a huge uptick in new customers for subscription businesses around the globe,” Subramanian said at the time. “As the world continues to reopen, a challenge facing many of those businesses is now how to retain and expand those customer relationships.”

The company cited research from Gartner which projects that by next year, 75% of direct-to-consumer (D2C) brands will offer subscription services, while only 20% will succeed in improving their customer retention.