London-based metering and pricing engine for SaaS companies, m3ter has launched from stealth with $17.5 million in funding. The round saw the participation of Kindred Capital, Union Square Ventures and Insight Partners. The seed investment will support the company as it builds on significant early traction to expand into new markets, grow team, and extend its product.
The startup’s early traction corresponds with a rapid increase in the number of SaaS businesses switching to usage-based pricing (UBP). The pricing model is becoming popular because charging customers for what they consume allows for easier adoption, costless upsell, better margin control, and greater customer satisfaction. Despite its benefits, UBP is difficult to implement. Billing operations are challenging because usage data needs to be brought together with commercial terms.
Addressing these issues, m3ter makes usage-based pricing easy for any software business. 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.
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. With m3ter, all SaaS businesses can intelligently deploy and manage usage-based pricing.”
Chrysanthos Chrysanthou, who led the investment from Kindred Capital, said: “The m3ter co-founders are repeat entrepreneurs with a deep, first-hand understanding of the struggles associated with usage-based pricing. With their technical ability and commercial track record, they’re uniquely placed to carve out a position of leadership in a market that’s fast taking shape as SaaS businesses look for a solution to their pricing woes.”
Rebecca Kaden, partner at Union Square Ventures, said: “m3ter has the potential to supercharge the SaaS industry as more software businesses capture their true value through frictionless usage-based pricing.”