SaaS start-up Chargebee has raised a fresh $125 million in funding co-led by new investor Sapphire Ventures and existing backers Tiger Global and Insight Venture Partners at a valuation of $1.4 billion, joining the unicorn club. Led by co-founder & CEO Krish Subramanian, the US and Chennai-based start-up automates revenue operations of subscription-based businesses.
The latest financial round that also saw participation from existing investor Steadview Capital has tripled the valuation of the company. The firm had last raised around $55 million in October 2020 at a valuation of about $500 million. Chargebee has garnered $230 million in capital so far.
The company will deploy the fresh funds to expand its global footprint and grow its partnership network, it said in a statement. Already, over 17,000 businesses globally use the services of Chargebee, the firm claims. Chargebee said that its platform is easy to implement; onboarding can be completed in less than 10 days, even for large global enterprises.
“The global pandemic has accelerated the already growing shift to SaaS and subscription-based business models from cars to coffee providers. Demand for moving into a recurring revenue stream is expected to grow at a 17.5% CAGR over the next five year,” the company said.
According to IDC, the global SaaS market is expected to cross $276 billion by FY24. Nasscom estimates the revenue for pure play Indian SaaS companies could increase six-fold to $13-15 billion by FY25 from $2.5 billion in FY20, suggesting the market share of pure play Indian SaaS companies could increase to around 5% by FY25 from about 2% in FY20.
Credit Suisse recently wrote in its report on 100 unicorns, the emergence and adoption of new technologies such as cloud, mobile, RPA, AI and the like over the last 5-10 years has not only facilitated increased penetration of the SaaS business model but also brought about new verticals/areas where SaaS can be deployed. “For example cybersecurity, API, analytics, have become emerging areas of focus for SaaS companies,” Credit Suisse observed.
Chargebee is the second SaaS firm to have bagged fresh funding this week after Druva that raised a fresh $147 million from a clutch of investors at a valuation of over $2 billion.
US-based Tiger Global has been heavily backing start-ups operating in India. Earlier this month, it led investments in a bunch of local tech businesses including Groww and Mohalla Tech pushing them to the billion dollar valuation club.