Securing Funds from Sequoia and More Investors – Explained by a Late-Stage Startup
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This year on March 20, Insight Ventures lead a Series C round to invest in a late-stage venture that specializes in subscription billing and recurring revenue management. Now, this sounds interesting considering the fact that the sector catered to by this venture is generically unconventional that is often neglected by today’s multi-national service providers. This startup, called Chargebee also has major names viz. Tiger Global and Accel Partners amongst its mentors.
Headquartered in the United States, and working with more than 7000 customers in 53 countries, Chargebee was found by Krish Subramanian who is also the Chief Executive Officer (CEO). Entrepreneur India interacted with Chargebee in a bid to decode capital raising strategies.
Technology-driven models – the key to securing venture capital
“We have always been a strong, technology driven team, with 3 of the co-founders having solid backgrounds in building Products at Zoho. We bootstrapped our company through the initial years, which made us very hungry to do more with less,” states Subramanian to Entrepreneur India.
Subramanian was also generous to shed light on identifying the fine line between aligning roadmap to build with customer versus cannibalizing the roadmap by customizing it for a few customers.
“Three of the founders being backed by 10+ years of product building expertise at Zoho was very helpful to keep the Product roadmap tight, and build a global solution that scales for thousands of customers as we continued to grow” adds Subramanian.
Chargebee is a global SaaS player. The venture’s business models are driven by Inbound Marketing and deep product expertise within the team.
Decoding the exact fund-securing process
With a total raised venture capital amounting to $24.7 Million, Subramanian states that the investors’ first step was to evaluate Chargebee’s engagement model and service. The capitalists also obtained constructive feedback from portfolio companies of Chargebee.
“Though we were not raising capital through 2017, we were thrilled by the value added by their team, with valuable customer references and feedback through them with valuable customer references and feedback through them,” reminisces Subramanian.
In synchronization with the above, the SaaS focus along with revenue businesses made Insight Ventures an exciting prospect for Subramanian and the entire team at Chargebee.
“They are a catalyst in the market with huge bets on companies like Shopify, HootSuite, GainSight, and even Alibaba, JD, and Twitter to mention a few popular brands,” re-iterates Subramanian.
Aside Insight Ventures, Accel partners and Tiger Global pumped in capital worth $6.2 Million during early stages over two rounds of funding.
Startups putting India on the world map
When asked about the SaaS sector in the country and the startup scenario, from a fundraising viewpoint, Subramanian stated that ventures like Freshworks (backed by Google Ventures) and BrowserStack (Secured$50 Million from Accel) have set precedents in terms of raising the bar for fundraising in India.
“We believe that we are still very early in the SaaS game, as more and more vertical SaaS solutions are emerging across sectors. The opportunity ahead of us is huge,” adds Subramanian humbly.
Also, as per a joint study by Google and Accel, Indian SaaS companies are expected to be valued at $50B USD by 2025.
Motivating the newbies
Finding the right venture capitalist and pitching for fundraising is the sixty four-thousand dollar question as far as the new entrants (startups) in the SaaS domain is concerned. To achieve this, Subramanian suggests that entrepreneurs should evaluate VCs based on the quality of the latter’s network.
Once the evaluation of a VC is done, the next step would be to engage early to understand which VCs can add value by way of customer introductions.
“Every investor we bring onboard is a long term partner and there are no shortcuts to building relationships,” signs-off Subramanian.