Metronomea 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, which brings the total raised to over $78 million since its launch in 2019.
Founded by Dropbox alums Kevin Liu and Scott Woodybased in San Francisco Metronome says it saw a 6x increase in ARR last year as more companies moved from subscription to usage-based models or a combination of both. Its clients include startups like OpenAI and Anthropic and companies like Databricks and Nvidia. Initially, Metronome worked with startups but last year expanded into the enterprise.
“We are fortunate to have seen this growth during an otherwise difficult year for SaaS,” said Liu. “Companies have cut spending on ‘nice-to-have’ software, but we’re seen as a key driver of revenue opportunities for our customers. The rise of artificial intelligence has also been a big factor (many AI companies are adopting usage-based models), as has companies’ desire to move away from simple subscription and seat-based models to more hybrid and usage-based approaches.” .
Not surprisingly, Metronome itself has a usage-based model.
The startup declined to disclose its valuation, saying only that it “was a very healthy multiple above” its Series A valuation.
“We still had almost all of our Series A in the bank and were heavily oversubscribed,” Woody said.
The draw for AI companies
Metronome claims it “dramatically reduces” the engineering investment required by companies to integrate and maintain billing.
“We help teams launch products quickly, offer any pricing, and streamline bid-to-cash workflows, all without engineering effort,” said Liu. It does this with a data platform it says offers “out-of-the-box” integrations, so engineering teams can simply direct their data flow directly into Metronome and skip owning and maintaining a lot of their own infrastructure “.
For enterprises specifically, Metronome claimed that moving to the cloud and/or usage-based revenue would typically require an overhaul of their financial stack. Its product, Liu said, helps facilitate that transition “while connecting to existing tools, minimizing disruption and drastically speeding up the process.”
Artificial intelligence companies in particular seem to be attracted to Metronome’s offering, the company claims.
“The entire AI stack has usage-based COGS, from APIs to the GPU infrastructure layer, which means AI businesses often turn to usage-based pricing to keep their margins stable,” Woody said. “We’ve had tremendous inbound interest from companies looking to monetize new AI products.”
Increasing number of staff
To help meet this demand, over the past year, Metronome has doubled its headcount to 66 full-time employees, growing its staff by more than 40% in the last quarter alone. It claims it “still has a lot of hiring to do this year”, particularly in the R&D and customer-facing teams.
The company also plans to use its new funding to advance its product roadmap.
“This chapter also gives us a huge amount of dry powder and runway, 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 haul.”
As part of the funding round, NEA partner Hilarie Koplow-McAdams joined Metronome’s board of directors.
“Pricing is often under-resourced internally and seen as a barrier to product launches and price changes. In fact, it is a revenue driver for any business,” he said in a written statement. “Metronome enables companies to rapidly operationalize new business models. Every customer we spoke to shared how Metronome turned billing from a ‘hair on fire’ problem to a system that just works.”
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