London-based M3ter raises $17.5 million to bring usage-based pricing to SaaS companies

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M3ter has just launched from stealth after raising more than $17.5 million for its metering and pricing engine for SaaS companies. Kindred Capital, Union Square Ventures and Insight Partners all participated in the round.

Founded in London by Griffin Parry and John Griffin, the fintech startup makes its easy for SaaS companies to deploy, manage and optimize usage-based pricing (UBP). The UBP model is becoming increasingly popular amongst SaaS businesses as charging customers for what they consume allows for easier adoption, costless upsell, better margin control, and greater customer satisfaction. In recent years, many of the software IPOs with the strongest net dollar retention – the likes of Snowflake and Datadog – have operated usage-based pricing, and today, usage-based companies are valued at a premium compared to other SaaS businesses.

However, implementing UBP has, until now, been a bit of a headache to implement. Billing operations are challenging because usage data needs to be brought together with commercial terms, something that businesses too often manage in a spreadsheet ‒ a time-consuming, error-prone process that struggles with complexity and change. Delivering a good product experience necessarily involves providing customers with up-to-date information about usage and how it converts to spend, and that’s hard to do. At the same time, Sales and Customer Success teams struggle to do their jobs without easy access to customer usage data, and revenues are near-impossible to predict without reliable forecasts of future usage and spend. This is where m3ter comes in.

Griffin Parry, co-founder and CEO of m3ter, said: “Usage-based pricing offers huge rewards for SaaS businesses, but it isn’t easy to implement. We experienced the pain ourselves when building our previous startup, but we also saw what good tooling can look like at AWS. Today, we’re proud to launch m3ter so that all SaaS businesses can intelligently deploy and manage usage-based pricing.”

It provides data infrastructure that captures granular usage and cost data at scale, enables complex pricing configuration, and calculates bill amounts in near real-time. This feeds systems throughout the stack, including the billing and finance system (to automate billing operations), SaaS platform (to deliver billing dashboards to end customers), and Sales CRM and Customer Success platforms (to allow smart, well-informed and timely conversations with customers). Implementation is straightforward, with a flexible API-based architecture and easy bi-directional integrations with common tooling.

M3ter is already gaining traction. Whilst in stealth until now, the fintech has already attracted customers including Sift, Stedi and Redcentric, as well as kicking off a partnership with revenue delivery platform, Paddle. The fresh funding will help the company to continue to build on its early growth, and meet growing global demand for its product with new hires in Europe and the US. M3ter will also use the funding to further the development of advanced analytics tooling for Sales and Finance teams. New features will allocate costs algorithmically to provide insights into unit economics; deliver pricing recommendations that improve results at the individual customer level; and provide revenue forecasts based on usage signals to improve business predictability.

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