Humble beginnings have worked as a launchpad for some of the most accomplished Ventures we witness today, whether it is Starbucks which was founded by three students of San Francisco or Apple which was started in a garage by a college dropout. A similar narrative was followed by Chargebee, a company started in 2011 with the aim to help SaaS and E-commerce businesses streamline their revenue operations. Its founder and CEO Krish Subramanian started his career as a programmer earning a modest Rs.3,500 a month. Subramanian, along with his three friends Saravanan KP, Rajaraman Santha and Thiyagarajan T, started with two things – an idea that had potential and the zeal to harvest that potential. These four men today are the founders of a company valued at $1.4 billion headquartered in San Francisco.
Assembling The Dream Team: Four Brilliant People Who Shared The Same Goal
Unlike other ventures which start with just an idea, Chargebee started with the coming together of four passionate people with business acumen who really wanted to do something of their own.
By 2009, Subramanian was doing perfectly fine with his career and was heading teams in TCS and Cognizant. It was only after he was offered a long-term opportunity to make an account and build it in the US, something that would need five-seven years that he chose to come back to India and build his own company with his friend Rajaraman in Chennai. The team was soon joined by Rajaraman’s roommate, Thiyagu who was taking a sabbatical from Zoho, a SaaS giant based in Chennai. By May 2011, both Krish and Rajaraman had quit their jobs and joined Thiyagu to build the product full time.
During this time Saravanan KP, who was Rajaraman and Thiyagu’s friend and mentor at Zoho, tried convincing them to stay, but instead saw the potential in the team and left Zoho to join them.These four men started hunting and building on viable product ideas.
The founders chose to build Chargebee as a company inspired by businesses like Fog Creek Software who, according to Subramanian, didn’t focus on having a unique product rather focused on bringing a smart set of people together, enabling them to make decisions and figure out solutions. The team was further encouraged by the launch of Freshworks in 2010 whose co-founder Shan Krishnasamy was close to Rajaraman as both of them had worked together for Advent Net previously.
This connection facilitated a discussion between the co-founders of the two companies and Freshworks whose current net worth is $3.5 billion became one of the first customers of Chargebee.
Unlike other ventures which start with an idea, Chargebee started with the coming together of four passionate people with business acumen who really wanted to do something of their own
Chargebee Gets Funded: Journey Hurdles and Introspection
From the very beginning, the founders believed that a strong foundation of the team was indispensable for the growth of a company, it is with this belief that the team which started with zero managed to give India its 11th unicorn in 2021 and raised $125 million in its recent Series G funding. The road from point A to today was not straight and smooth, it took a lot of patience and hardwork to successfully make it past the curves and tunnels.
In October 2012, Chargebee raised its first angel round of investment, however, this was a year before the company received its first major funding from Accel. The company was introduced to Shekhar Kirani from Accel via Freshworks. For a very long time, whenever Shekhar used to take a flight to Chennai to meet the Freshworks team, his day would start with a short breakfast meeting with the Chargebee team at a vegetarian restaurant recommended by Subramanian.
Shekhar Kirani wrote in one of his blogs about one thing that Rajaraman said that he still remembers. Rajaraman said that one day Kirani would visit Chennai to specifically meet the Chargebee team and they would then be the one’s offering the breakfast slot to some other start-up.
While in the meeting Shekhar always urged Chargebee to ask deeper questions like, who is interested in buying the product within an organisation? How did they discover Chargebee? What tools/systems did they use before this? It was the ‘why’ questions Shekhar asked that got them to think about the recurring value proposition and arrive at several crucial insights. The founders of Chargebee believe that the questions Kirani raised and the problems he presented really led the company to introspect, work its way to the solutions and therefore it helped them majorly in getting the basics right. In 2012, after a lot of grilling, Shekhar finally invested in Chargebee and this happened only when the company had figured out what it was, who it was for, and why the customers should choose it and not someone else.
Since then, the company has been growing at an exponential rate with every funding series. It raised $5 million in 2015, $14 million in 2019, $55 million in 2020, and finally earned the unicorn status with $125 million raised this year. Its major investors are Accel, Insight Venture Partners, Steadview Capital, and Tiger Global Management.
Chargebee’s Identity and Clout
The Chargebee team wanted to be a company whose main focus was the success of its customers. This was accomplished by making sure that they are available for their customers 24/7. Secondly, the team at a very initial stage understood that since the product relied heavily on working with other products, the Application Programming Interface should not be just as smooth as butter but also ridiculously easy.
Lastly, they realised how crucial their company is for the customers. If Chargebee went down, even for a small while, customers were hit where it hurts most that is their revenues. To make sure this doesn’t happen the team integrated with several payment gateways like Paypal, Amazon Pay, GoCardless, and many more across 150+ countries so that their crashes wouldn’t affect the functioning Chargebee.
The founders of the company have also seamlessly integrated with firms like Mail Chimp, Google Analytics, Slack, Salesforce, to make their operations efficient across different departments such as Sales, Finance, Marketing, etc.
Surviving and Thriving In A Sea Full Of Competition
The company, since its inception, has survived against behemoths like Stripe, a company valued at $95 billion, and other giants like Chargify, Zuora, Braintree, a few names from a long list. One thing that has helped the company sail through these competition-heavy waters is a clear understanding of its purpose and what the customer is expecting from the other end. However, at an initial stage what motivated Chargebee to compete with such big firms was the fact that they started working with very few overheads because of AWS. Chargebee’s entire server load was zero in its first year and cost $100 per month. As a SaaS-based model, it didn’t have to dump all its savings into infrastructure and this meant that it could still compete with large companies who already had millions of dollars in funding. Chargebee and Stripe who compete in the market also work with each other, which helps meet the strategic objectives of both companies.
One of the main advantages of Chargebee, when compared to other companies, is its user-friendly interface, its flexibility, and its customization options. The company has created the option of creating custom fields for the Customer and Subscription objects. This option can be used to track additional information about a customer or their subscription. Chargebee has always kept its approach flexible, it accommodates all the sudden pricing changes a company might have to go through. Through it, companies can run their entire recurring billing process on auto-pilot. All they have to do is schedule calendar billing dates and the Chargebee team takes care of the rest whether it is – proration, taxation, invoice consolidation.
In 2020, the customer reviews ranked Chargebee the number one finance software, not only this, over the next five years the company is predicted to grow at a rate of 17.5 per cent.
Chargebee raised $5 million in 2015, $14 million in 2019, $55 million in 2020, and finally earned the unicorn status with $125 million raised this year.
Chargebee Believes in Evolving
Since its establishment Chargebee not only survived in the market but also showcased exceptional growth, this was only possible because they always had room to evolve and improve. An example can be the introduction of the ‘Freemium Plan’. In 2016 when the founders realised that they were undervaluing their amazing product against the competitors which further led the customers to doubt its abilities as well. So, they brought major pricing changes and also introduced the Freemium Plan which enabled the early businesses to enjoy the benefits of its platform. Another example can be that of the strategy they used during the pandemic, they employed an ‘Adaptive Marketing Strategy’, a kind of strategy which is designed to conquer these changes and turn them into opportunities for growth. The strategy focused on being fluid so that they could quickly understand the needs of the customer, work on those aspirations, and mould themselves to fit into these changes.
The Company Has Come A Long Way
Through constant effort and change, gradually, a company that was born in Chennai with four friends sipping coffee at a restaurant has turned itself into a big name in the field of subscription management and recurring billing solutions. Chargebee today works with 18,000 customers with its major clients being Freshworks, Calendly, Fujitsu Linux Academy, and operates across 160 different countries. It is a source of employment for 452 people and this year generated a revenue of $33.7 million.
Through its constant innovation, passion towards customer success and of course a wonderful human resource has been able to retain and expand its customer base.
The success of Chargebee can be a source of inspiration for us. When you are taking that first step in establishing a business, remember that Chargebee started with zero funds and zero customers, but what they had was the zeal, passion and knowledge which is required to drive a company to its pinnacle.
For more inspiring stories, check out our Inspire section!