OtherApr 27, 2023

We’re Proud to Announce Our $14 Million Series A Funding

Today, m3ter is excited to announce a $14 million Series A funding round to further our mission to help software companies successfully operationalize modern usage-based pricing strategies.

Griffin Parry, Founder m3ter
Griffin ParryCEO and Co-Founder, m3ter
John Griffin, co-founder m3ter
John GriffinCRO and Co-Founder, m3ter
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Today, m3ter is excited to announce a $14 million Series A funding round to further our mission to help software companies successfully operationalize modern usage-based pricing strategies. Since launching from stealth in 2022, our company has built significant traction and grown to 55 team members, and this investment will support our team as we continue the journey, adding new analytics features, expanding our US presence, and accelerating our go-to-market. 

Our thanks to all our investors for their faith and investment in m3ter’s mission and team. This round was led by Notion Capital, with participation from our existing investors Insight Partners, Union Square Ventures, and Kindred Capital. 

The explosive growth of usage-based and hybrid pricing, and where m3ter fits in

m3ter was founded to support software companies moving beyond simple recurring subscription models to implement hybrid and usage-based pricing (UBP). These models have grown in popularity thanks to the widespread adoption of Product Led Growth (PLG), as well as the rise of new software end-users created by the rise of APIs and automation. The ability to improve margin control, boost customer satisfaction and retention, and expand revenue through costless upselling has also made this emerging pricing strategy an invaluable lever for growth for modern software businesses. According to the latest data from OpenView, usage-based businesses continue to outperform the market, with annual revenue growth 31% greater than that of their peers while net dollar retention is 9 percentage points higher. Today, 61% of SaaS companies have some form of UBP in place, up from just 27% in 2018. 

Despite their advantages, usage-based pricing models are challenging to deploy and manage because existing pricing and billing tools are not well adapted to them. This leaves companies ill-equipped to handle pricing and billing with any complexity or scale, which negatively impacts revenue, time to market, and customer experience.

As founders, we had already worked closely together for 15 years – from supplier and customer, to startup co-founders in 2012, then a sale to Amazon and a few years as coworkers at AWS. During that time, we experienced the difficulties of deploying and managing UBP firsthand, but also saw UBP best practice at AWS, who are one of the leading practitioners of it. There was an obvious gap in the market and an opportunity to help software companies transform their businesses through pricing. 

This is why we founded m3ter. 

The journey to Series A

While the idea of m3ter was in the making for a long time, the journey from founding to Series A has flown by. It feels like just yesterday that it was only the two of us – Griffin Parry and John Griffin, two founders sharing the same name (but not related!) – sitting at home during the COVID-19 lockdowns, testing our thesis on anyone who would spare us the time. 

Along the way, we’ve rushed past so many milestones: our first employee, first funding round, first customer commitment, first customer live in production, first boots on the ground in the US etc. As is typical with startups, we’ve always been facing forward, looking breathlessly ahead to the next objective. But this Series A milestone is a great moment to pause and reflect on the business and our journey so far.  We both agree that the aspects we are most proud of are our people and our product.

The many faces of m3ter

At our company m33tup March 2023 in Javea, Spain.

One of our key goals from the beginning was to build a strong company culture. To us this meant great people working in an informal environment of high agency and trust, with everyone enjoying the journey rather than obsessing over the destination. 

Today, our team has grown from two to more than 50 members. We are humbled that m3ter continues to attract so many bright and kind people who want to work together and learn from one another. And we’re delighted that everyone seems happy and fulfilled at work, which we see as one of our biggest accomplishments.  

As we prepare to scale, we’re focusing on continuing to build out the right foundations for our people - ensuring everyone has the support and infrastructure they need to develop and continue thriving as the company matures. Our leadership team is fully dedicated to not only maintaining, but enhancing our culture as we grow.

A product that is making an impact for customers

On the product side, we’ve been really fortunate to have experienced consistent demand since launch, growing our customer base by 375%. The businesses we are onboarding are looking for a simple, low-code way to support hybrid and usage-based pricing without having to change their existing tech stack. Our customers include cloud infrastructure, payments, fraud detection, and ID verification businesses like ClickHouse, Sift, and Onfido – all operating in sectors where a usage-based pricing model is a natural fit, but is difficult to implement and manage without the technology to support it. 

It has been critical for us that m3ter’s platform can support software companies of all stages and with any variation of pricing complexity, so we can help them to scale with confidence. m3ter works by plugging directly into existing systems to capture granular usage, pricing, and account data at scale, and then applies complex pricing configurations to automatically and accurately calculate bill items in near real-time. 

This data feeds systems throughout the stack, including the billing and finance system (to automate billing operations and eliminate revenue leakage), the SaaS product itself (to deliver billing dashboards to end customers), and Sales CRM and Customer Success platforms (to allow tailored sales deals as well as smart, well-informed, and timely conversations with existing customers). Our platform makes pricing changes easier to coordinate across teams, while pricing strategy is guided by concrete data, removing much of the guesswork to identify untapped opportunities and deliver substantial bottom-line benefits. 

Because m3ter syncs directly with our customer’s existing tech stack, we know there’s so much power and potential for both our customers and for our business in partnerships. We’ve partnered with leading subscription management platform, Chargebee, to deliver advanced event metering, usage-based pricing, and billing capabilities to businesses around the world. With Chargebee, we are helping companies simplify their journey from simple subscriptions to more sophisticated pricing strategies with highly-configurable models. 

We've had the pleasure of working with some incredibly innovative companies who are revolutionizing their industries and leading big pricing transformations. One of our customers is data management system ClickHouse, who used m3ter’s technology to launch a new cloud offering, ClickHouse Cloud, in a year - with the billing implementation taking just two months. By working with m3ter, ClickHouse was able to choose and implement the ideal pricing model for ClickHouse Cloud and bring it to market three times more quickly than would otherwise have been possible. Future pricing flexibility is built in, and ClickHouse Cloud customers have full access to their usage and spend data, enabling them to accurately predict costs and adjust consumption as needed.

Funding will support analytics and US expansion

Today’s funding will allow our team to build an advanced analytics offering to complement the sophisticated reporting capabilities we have today. Starting with a new Cost Allocator we are co-creating with some of our current customers, we will apply data science techniques to identify gross margin performance on a per-customer basis, allowing businesses to take action on low-margin clients via pricing adjustments or cost optimisations. Also under development are Pricing Experimenter and Usage Forecaster products. Our Pricing Experimenter will allow customers to explore different pricing models in real-time with historic or simulated usage data to understand their impact on revenue before implementing them. And the Usage Forecaster will provide accurate usage and revenue forecasts over multiple horizons. Customers can identify operational issues in real-time, reach out to end-customers who may churn or be upgraded to a better pricing plan, and make financial plans over the longer term. Taken together, these three features lay the foundation for us to fully automate pricing decisioning. 

We will also use the funding to support ongoing expansion in the US, building on recent strategic hires in the market including the appointment of Craig Irons as VP Sales, North America. Craig joined m3ter from AWS where he led worldwide GameTech business development, strategy, GTM, and operations, previously working with a number of the m3ter team members while there. Craig’s team will also be bolstered with key customer facing hires to support our growing customer base in the region. 

Continuing our mission to build the leading pricing operations platform

As the popularity of usage-based and hybrid pricing models continues to grow, the opportunity for m3ter to make an impact for our customers is clear. Today’s funding enables us to continue on our mission to help software companies successfully operationalise modern usage-based pricing strategies to realize their full potential. 

In the next year, we’re laser focused on supporting our employees, partners, customers, and growing our customer base within our target market, while investing heavily in building out both our US team and advanced analytics solution. Success is continuing to enable a growing cohort of innovative customers who see m3ter as their trusted partner for years to come.

Jos White, who led the investment from Notion Capital, said:

I’m excited to announce our investment in m3ter. As pricing becomes a strategic priority for more software businesses, the one-size-fits-all approach looks increasingly obsolete. m3ter’s technology will power this transition towards more usage-based and intelligent pricing. Already, the company’s co-founders have laid solid foundations with an exceptional team and product, as well as deep engagement and alignment with their early customers and partners. We look forward to the bright future ahead.

For the full funding round press release, you can read it here.

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