Subscription eCommerce business is big business and growing fast. In fact, the global subscription e-commerce market was valued at $34.7 billion in 2020 and is projected to reach $2.64 trillion by 2028., according to UnivDatos Market Insights.
loadbee is helping fuel that global growth by providing an easy-to-deploy software platform that helps these businesses manage their recurring billing and subscription systems specifically for subscription-based SaaS and e-commerce businesses.
Founded in 2011 in the city of Chennai, in southern India, by four friends, Krish Subramanian, CEO; Rajaraman Santhanam, Director of Operations; Saravanan KP, CTO and Thiyagarajan T, Architect, Chargebee is used by companies ranging in size from startups to large companies like Freshworks, Study.com, and Fujitsu in markets around the world.
“Four of us started Chargebee, and three of my co-founders come from Zoho. And each of them had 10-12+ years of Zoho experience before starting Chargebee,” says Subramanian. Zoho provides software applications for almost all aspects of business and is one of the most successful privately held software companies in India with around 10,000 employees and was an excellent product development testing ground for the co-founders.
While the co-founders were content to learn the art of software product development from others, they were all inspired to one day start their own business together. Subramanian got a taste of startup life after graduating from college, but spent the next nine years at large systems integration companies TCS and Cognizant, before co-founding Chargebee.
They were inspired by the startup stories of New York entrepreneur and software engineer Joel Spolsky and the founders of Zoho. “We had good careers in the companies that we were actually a part of, but global inspiration, someone we never met in New York writing about their journey of building a company inspired, at some point, to quit and build a company like this. . These ideas were engraved in our minds and for eight or nine years we planned them”, says Subramanian.
To turn their inspirations into reality, the co-founders committed to saving a third of their salaries so they would have the capital to start their own business when they were ready. “We didn’t move, but for eight, nine years, every pay raise, I used to sign off on a big chunk of it to say, ‘OK, it goes into mutual funds, systematic investment plans.’ Therefore, it is a team-first company, not an idea-first company. We all quit and started and said, what problem do we solve? Subramanian says.
The team analyzed three possible problems to solve. It was about developing the instrumentation to know the efficiency of your code. The second was site monitoring and the third was billing and payments because billing like subscription management is something they felt companies shouldn’t have to build on their own but most companies do anyway and in every conceivable language.
“And that’s how we started. And throughout the early years, we could see that we hadn’t done our due diligence on the market’s build-my-own mentality. Pretty much every developer we talked to, every CTO we talked to, was like, “Oh, this is something I can automate over the weekend, like scheduling scripts. Why can’t I manage recurring billing myself?” ” The bias was very strong, leaning towards building rather than buying something off-the-shelf,” says Subramanian.
They eventually found that their marketplace product was a good fit for e-commerce companies, many of them startups that didn’t have the developer resources to build their own systems. They preferred plug and play solutions. Therefore, the team went on to create an API-based product for e-commerce companies.
“One of our first customers was called Flavor Box in the UK who were complaining about this Authorize.net automatic recurring billing module not working for them. They wanted to collect money from PayPal, but the Authorize.net payment gateway doesn’t talk to PayPal. Chargebee will connect with both systems, and it’s easy for you to manage, and we’ll give you one view of all subscriptions. You can generate all your invoices and you can also generate your shipping labels and send them to customers. It took us four or five years to find the right product for the market and also make enough founder mistakes, but not die as a company,” says Subramanian.
Self-funding helped them survive those years, but they did raise an initial round of funding from Accel, not so much because of the financing, but more because of their strategic orientation. “In fact, I would split our journey into two parts: the first five years of finding the product market fit journey and then continuing to grow 100% year over year for the next five years and going through the company scaling journey says Subramanian. .
And the scale they made. Today, Chargebee has about 1,000 employees worldwide and is closing in on 5,000 paying clients, attracting $468.4 million in venture capital over eight rounds. Its latest $250 million Series H funding round on February 1, 2022, led by Sequoia Capital India and Tiger Global Management, valued the company at $3.5 billion. Other investors include Insights Partners, Sapphire Ventures, Steadview Capital, Left Lane Capital and Accel. “We’ve raised this $470 million in capital for someone who said our dream was to make $1,500 a month when we started,” says Subramanian.
Subramanian grew up in Chennai. His family were mostly hoteliers, although his father was a government employee. “I grew up as a kid in the ’80s. And at that time there was a lot of emphasis on education and education in English. I am very fortunate that my parents deliberately insisted on putting us in English education, which it gave us as a privilege and an opportunity, which you eventually came to appreciate later on in the number of doors it opens,” says Subramanian.
Although his family wanted him to eventually work for the government as well, Subramanian was inspired to run a business by looking at his uncle’s family restaurant with whom he was staying while studying to be an engineer. But his focus was always on computers and his love for programming from a young age. He then got his computer science degree from Bharathidasan University and then had the opportunity to work closely with the founding CEO of the start-up company MatexNet which was creating e-government software for the government. From there, he went on to work for one of India’s largest IT integration services firms, TCS, for nearly seven years before joining Cognizant for nearly two years before considering the time was right to launch his own way with the founding of Chargebee in 2011.
As for the future? “Millions of companies around the world are trying to have some kind of recurring relationship with their customers. And all of these companies have things related to their revenue infrastructure that are not working. That requires a glue that connects your CRM with your accounting, with your product and service to unlock your next phase of growth. So when we fast-forward three to five years for Chargebee, we want to be able to drive 50,000 subscription companies that want to go from idea to IPO,” Subramanian concludes.