ReCharge — a leading provider of recurring payment services — reached a $2.1 billion valuation last Thursday after raising $277 million in growth capital funding. The software-as-a-service (SaaS) company added nearly 3,000 users in 2020 alone, achieving a total of 15,000 customers who use the platform to implement and manage subscriptions.
Recently, many businesses have pivoted into the subscription industry, and ReCharge is looking to capitalize on these revenue opportunities. The once-bootstrapped startup is now using $277 million in funding to enhance product development and acquire more clients interested in adopting their own subscription models.
Read on to hear from ReCharge’s VP of Marketing, Luke Retterath, on how the company plans to leverage its strong valuation to tap into trending market opportunities in the subscription space.
How ReCharge Plans to Use its Funding
Currently, ReCharge offers Standard ($60/mo) and Pro ($300/mo) plans that allow businesses to enter the booming subscription economy. Not only can merchants install recurring payment structures through its platform, but they can track analytics to better gauge retention strategies, recover failed payments, and simplify their customers’ shopping experience.
ReCharge has doubled its revenue for five consecutive years, according to the company’s COO Chathri Ali.
Now equipped with $277 million in funding, the company looks to provide more accessibility for users, who can leverage its software to better engage with customers and achieve their business goals.
“This capital will allow us to significantly accelerate investments in product development and continue our expansion into new markets and e-commerce platforms,” Luke Retterath, VP of Marketing at ReCharge, told SUBTA.
Specifically, ReCharge will use its funding to expand into other e-commerce platforms like BigCommerce and Magento, grow in the European market, and accelerate its time-to-market strategies.
These customer acquisition initiatives may be derived from past successes. The company has a history of converting well-established businesses into subscription moguls. An example of this is the brick-and-mortar company, General Assembly Pizza, which used ReCharge to become the world’s first pizza subscription service.
“Those that added subscriptions to an existing business were most successful when they were able to leverage a loyal fan base,” ReCharge said in its 2021 Subscription Commerce Report.
Allowing Businesses to Keep Up With Evolving Subscription Trends
Setting up recurring payment systems can seem tricky, and ReCharge is working to break this stigma. Through data tracking, its clientele can better prepare for long-term success. According to its 2021 report, ReCharge’s clients have experienced a 91% year-after-year subscriber growth.
This drastic increase is matched by a slower rate of Lifetime Value (LTV), which means that consumers’ purchasing habits are ever-changing and there are new opportunities to optimize the subscription experience. “With overall subscribers growing at an extremely high rate and LTV at a slower pace, it’s clear that new shoppers are trying out subscriptions for the first time,” says ReCharge in this report.
ReCharge’s enhanced analytics features can allow businesses to make calculated decisions that guide the way they retain customers and limit churn. “The old adage, ‘You never get a second chance to make a first impression’ should be at the forefront of every business planning process,” the company adds.
Enhanced product features could further connect business owners with insights that can guide their growth. For instance, ReCharge currently tracks the Average Order Value (AOV) per customer. Higher rates of AOV are seen amongst merchants who used ReCharge’s product swapping and subscription pausing features.
Expanding the ReCharge Team
The future for ReCharge is bright, and the company looks for new ways to keep pace with its success. To scale, the company will hire more employees to support these new initiatives.
“A significant portion of these investments will be growing our headcount. We started 2020 with 140 team members and are currently at 328 with another 60 roles currently open,” says Retterath.
While ReCharge is hiring across all departments, it will focus primarily on engineering, product development, and go-to-market positions (marketing, sales, and customer success).
“Raising this capital will enable us to invest and continue to hold a leadership position in a market that is estimated to grow to $500 billion in the next several years,” concludes Retterath.
- ReCharge reached a $2.1 billion valuation last Thursday after raising $277 million in growth capital funding.
- The company will use its funding to expand into other e-commerce platforms like BigCommerce and Magento, grow in the European market, and accelerate its time-to-market strategies.
- ReCharge has doubled its revenue for five consecutive years.