Wednesday, 31 January 2024, Bengaluru, India
In a Series B fundraising round headed by NEA, the software startup Metronome has raised $43 million to assist software companies in providing usage-based charging
The funding round was also attended by current supporters Andreessen Horowitz and General Catalyst, bringing the total amount raised since the project’s founding in 2019 to over $78 million.
Metronome, a San Francisco-based company founded by former Dropbox employees Kevin Liu and Scott Woody, saw a 6x growth in annual revenue last year as more businesses switched from subscription to usage-based models or both. Startups like Anthropic and OpenAI and established companies like Nvidia and Databricks are among its clientele. Metronome began working with startups and moved into the enterprise last year.
“We were lucky to witness that expansion amid what was otherwise a challenging year for SaaS,” Liu stated. Businesses have been spending less on “nice-to-have” software, but our clients view us as a significant source of new business potential. The desire of companies to switch from pure subscription and seat-based models to more hybrid and usage-based methods has also been a considerable influence, as has the advent of AI (many AI companies are adopting usage-based models).
It’s not a surprise; the usage-based model of Metronome is its own.
The business merely stated that “it was a very healthy multiple above” its Series A valuation when asked about its valuation.
The allure of artificial intelligence firms
According to Metronome, the engineering investment businesses need for billing integration and maintenance can be “dramatically reduced.”
Without requiring engineering work, Liu stated, “We help teams launch products quickly, offer any pricing, and streamline quote-to-cash workflows.” To avoid owning and maintaining a large amount of their infrastructure, engineering teams may point their data stream directly at Metronome, thanks to a data platform that, according to the company, allows interfaces “out-of-the-box.”
Metronome asserted that switching to usage-based or cloud-based income would usually necessitate reorganizing an organization’s financial stack, specifically for corporations. According to Liu, its device “plugs into their existing tooling, minimizing disruption and drastically speeding up the process” to help ease that move.
The company asserts that Metronome’s product is particularly appealing to AI startups.
AI companies frequently use usage-based pricing to maintain stable margins since “the entire AI stack has usage-based COGS, from APIs down to the GPU infrastructure layer,” according to Woody. We’ve had a ton of inquiries from businesses hoping to make money off of new AI products.
Increasing the number of heads
Metronome increased its workforce by more than 40% in only the most recent quarter and more than quadrupled to 66 full-time workers over the previous year to fulfill the demand. It “still has a lot of hiring this year,” especially for its customer-facing and research and development departments.
The business intends to continue its product roadmap with the additional funds.
“In this uncertain environment, this capital also gives us a tremendous amount of runway and dry powder,” Liu remarked. “Customers need to know we’re here to stay because we’re constructing vital infrastructure.”
Hilarie Koplow-McAdams, a partner at the NEA, has joined Metronome’s board of directors as a part of the fundraising round.
“Billing is frequently understaffed internally and is thought to be a roadblock for new product introductions and price adjustments. For every firm, it truly is a make-or-break source of money, the spokesperson stated. Businesses may swiftly operationalize new business models thanks to Metronome. Every customer we spoke with described how Metronome made billing go from a “hair-on-fire” issue to a simple, functional system.
(Information Source: Techcrunch.com)
