Wednesday, 24 April, 2024

UserHub secures $3.2M to help SaaS startups monetize and scale

UserHub, a user-based billing platform built for B2B SaaS, has secured $3.2 million in pre-seed funding. 

The investment, led by 468 Capital, marks a major step forward in the company’s mission to make modern monetization infrastructure attainable for every software business. UserHub will use the funding to expand the engineering team, accelerate product development, and grow its customer base.

Category-leading SaaS products – such as Slack, Hubspot, and GitHub – spend millions building user management, pricing, and billing systems so they can monetize the value they create. But the majority of SaaS companies, especially startups, lack the resources to invest in this area, rightly choosing to focus on their core offering. As a result, many SaaS vendors miss opportunities to serve all customer segments in their market and lose out on expansion revenue from their biggest customers.

To level the playing field, the UserHub platform includes embeddable self-service interfaces designed to be a natural extension of a SaaS vendor’s core product, so end-customers can easily add team members, upgrade plans, and manage licenses and credits.

While Stripe Billing and Auth0 address elements of the customer lifecycle, UserHub is designed to provide startups with all the features necessary to “Land and Expand” their customer base. UserHub is designed for application-layer SaaS, whose customers might progress from an entry-level tier with a single-seat account to an enterprise tier with thousands of seats.

Co-founders Patrick Rafferty and Silas Sewell founded UserHub after becoming frustrated with the state of existing user management and billing products while working at Reonomy, a commercial real estate AI-powered SaaS product.

Rafferty was VP of Product and Engineering, and Sewell was Principal Engineer. Even with a team of 60 engineers, Rafferty viewed their user management and billing features as underdeveloped in comparison to the leading SaaS products they used every day.

Sewell developed authorization and subscription billing systems at several SaaS companies. He realized customer identity and billing would have to be reimagined in a singular platform.

UserHub Co-Founder Patrick Rafferty said: “Technology companies reinvented consumer commerce by creating a seamless buyer experience – both online and offline. Square, for instance, equipped every restaurant with an elegant checkout experience.

 “UserHub will do the same for SaaS startups: help firms launch monetization capabilities usually reserved for the largest products. We will help them unlock expansion revenue, and allow them to focus on developing their core products.”

The SaaS market includes over 30,000 vendors with a combined revenue of $282 billion. It is expected to reach $375 billion by 2028.

468 Capital Partner Philipp Seifert said: “For too many startups there is a gap between the value their software delivers and the value they can extract from customers at scale. 

Patrick and Silas have first-hand experience of the problems this gap can create for companies and how to solve it. 

Their vision for a new user management and best-in-class billing platform is a game-changer in that it allows UserHub customers to offer an end-user experience as seamless as what the industry has come to expect from companies like Notion and Figma.”

Launched in private beta in November, UserHub’s early prototype has received overwhelmingly positive feedback from a range of SaaS companies including trending data product Glimpse, which launched new pricing plans and seamlessly moved from a single-user to multi-seat model.