Lago Raises $22M for Its Open Source Billing Platform Based in Paris

Lago Secures $22M to Revolutionize Billing for Developers

Lago, a Parisian startup that initially focused on marketing tools, has successfully pivoted into the billing space and raised $22 million across two funding rounds. The company discovered that the billing industry was even more fragmented and problematic for potential customers than marketing.

Open-Source Billing Platform Targets Developers

Lago’s open-source billing platform is designed to cater to developers who require tailored solutions for their innovative services. CEO Anh-Tho Chuong emphasized the company’s commitment to partnering with developers, stating, “We honor [their] abstraction, and we use data to meter usage, to help companies handle subscriptions [or other] pricing plans in an easy way.”

Notable Investors and Early Customers

The Series A round of $15 million was led by FirstMark, while the previous $7 million seed round was led by SignalFire. Other investors include Y Combinator, New Wave, Addition (Lee Fixel’s fund), Script, and notable individuals such as MongoDB monetization head Meghan Gill, Romain Huet (previously Stripe, now developer relations at OpenAI), and Hugging Face CEO Clément Delangue. Lago has already attracted early customers like Mistral.ai, Together.ai, and Juni.

The Pivot from Marketing to Billing

Chuong and co-founder Raffi Sarkissian, both former employees of business banking startup qonto.com/en” target=”_blank” rel=”noopener”>Qonto, initially set out to create a “Zapier for marketing teams.” However, their marketing tech product gained little traction in the crowded market. A turning point came when Sarkissian wrote a Hacker News post lamenting the problems with billing for developers, which unexpectedly struck a nerve with the community. This led Lago to pivot to billing, leveraging their expertise from their time at Qonto.

Addressing the Challenges in Billing

Despite the presence of larger tech companies and open-source providers in the billing space, Chuong believes there is still an opportunity for extensible and tailored solutions, particularly for startups pushing boundaries in their respective markets. She highlighted the AI sector as an example, where companies are exploring hybrid approaches that combine flat-rate subscriptions with consumption-based pricing. Lago aims to provide open-source tools that can integrate with developers’ creations and handle complex billing scenarios.

We chose Lago as our billing provider because we believe in the open-source ecosystem. They have been able to follow the pace of our releases and have allowed us to focus on what we do best.

– Timothée Lacroix, co-founder and CTO at Mistral.ai

Future Plans and Expansion

Lago plans to continue building its existing business while exploring additional features, such as data analytics for customer consumption and payment patterns. The company is also considering expanding into payments orchestration to ensure seamless integration with its billing platform.

With its open-source approach and focus on developer needs, Lago is well-positioned to address the complex billing challenges faced by startups and innovators in various industries.