Acceleratora startup that helps software companies offer usage-based billing, has raised $43 million in a Series B funding round led by NEA.
Existing backers Andreessen Horowitz and General Catalyst also participated in the funding, bringing the total amount raised to more than $78 million since its inception in 2019.
Founded by Dropbox alumni Kevin Liu and Scott WoodyHeadquartered in San Francisco Accelerator It says it saw a 6x increase in ARR last year as more businesses switched from subscription to usage-based models, or a combination of both. Its clients include startups like OpenAI and Anthropic and enterprise companies like Databricks and Nvidia. Initially, Metronome worked with startups, but last year it expanded to include enterprise.
“We’ve been fortunate to see this growth during what has been a difficult year for SaaS,” Liu said. “Companies have cut back on spending on ‘nice-to-have’ software, but we are seen as a key driver of revenue opportunities for our clients. The rise of AI has also been a big factor (many AI companies are adopting usage-based models), as has companies’ desire to Moving away from subscription and bench-based models to more hybrid and usage-based approaches.
Not surprisingly, the accelerator itself has a usage-based model.
The startup declined to disclose its valuation, saying only that it was “a very healthy multiple higher” than its Series A valuation.
“We still have almost all of our Series A in the bank, and it was heavily oversubscribed,” Woody said.
The lottery for artificial intelligence companies
The accelerator claims to “dramatically reduce” the engineering investment companies require to integrate billing and maintenance.
“We help teams launch products quickly, offer any pricing and streamline quote-to-cash workflows, all without engineering effort,” Liu said. It does this through a data platform that it says provides integrations “out of the box, so engineering teams can just point their data flow directly into Metronome and skip having to own and maintain a lot of their own infrastructure.”
For enterprises in particular, Metronome claimed that moving to the cloud and/or usage-based revenue will typically require an overhaul of their financial stacks. Its product helps facilitate that transition “while connecting their existing tools, reducing disruption and dramatically accelerating the process,” Liu said.
The company claims that AI companies in particular are attracted to Metronome’s offerings.
“The entire AI stack has usage-based cost of goods sold, from APIs all the way to the GPU infrastructure layer, which means AI companies often resort to usage-based pricing to keep their margins consistent,” Woody said. . “We’ve had a lot of interest from companies looking to monetize new AI products.”
Increasing number of employees
To help meet this demand, over the past year Metronome has doubled its headcount to 66 full-time employees, increasing its headcount by more than 40% in the last quarter alone. It claims it “still has a lot of hiring to do this year”, particularly across its R&D and customer-facing teams.
The company also plans to use its new funding to move forward with its product roadmap.
“This capital also gives us a huge amount of dry and graded powder, which is important in an uncertain environment like this,” Liu said. “We’re building critical infrastructure, so customers need to know we’ll be around for the long term.”
As part of the funding round, NEA partner Hilary Koplow McAdams has joined Metronome’s board of directors.
“The billing process is often under-resourced internally and is seen as a barrier to product launches and pricing changes. “In fact, it is a make-or-break revenue driver for any business,” she said in a written statement. “Metronome software allows companies to quickly activate new business models. Every customer we spoke to shared how Metronome transformed billing from a ‘high-risk’ problem to a system that works efficiently.”
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