RevenueCat Raises $40M Series B to Fuel In-App Subscription Growth

RevenueCat Secures $40 Million in Series B Funding

RevenueCat, a company specializing in tools designed for developers creating subscription-based applications, has successfully completed a $40 million Series B funding round. This investment brings the company’s post-money valuation to $300 million.

Addressing the Complexities of Subscription Management

The company was established by developers who personally experienced the challenges associated with scaling subscription applications. RevenueCat’s SDK provides a comprehensive solution, enabling businesses to not only implement subscriptions but also to effectively manage them over time, adapting to evolving app store policies.

Furthermore, the platform facilitates the seamless sharing of subscription data with other essential business tools, including those used for advertising, analytics, and attribution.

Investment Details and Board Expansion

This funding round was spearheaded by Y Combinator’s Continuity Fund, with significant participation from Index Ventures, SaaStr, Oakhouse, Adjacent, and FundersClub. Notable individual investors included Tobias Balling, CTO of Blinklist, and Nicolas Dessaigne, co-founder and former CEO of Algolia.

Anu Hariharan, a Partner at YC Continuity, will be joining RevenueCat’s board of directors, alongside Index’s Mark Fiorentino and the company’s founders.

The Genesis of RevenueCat

According to RevenueCat CEO Jacob Eiting, the concept for the company originated from difficulties encountered while working on subscription infrastructure at Elevate, alongside co-founder and CTO Miguel Carranza Guisado.

Years were spent resolving a complex “subscription mess” to obtain fundamental insights like subscriber retention and lifetime value, ultimately revealing a significant opportunity to assist other developers facing similar hurdles.

Limitations of App Store Infrastructure

Eiting explains that Apple and Google don’t consistently provide the data and infrastructure necessary for businesses to effectively build subscription models. “They are continually learning and adapting, but haven’t always been able to deliver the required data, and the underlying infrastructure is inherently complex.”

Early Adoption and Growth

When Eiting and Guisado initiated work on RevenueCat in 2017, comparable solutions were largely absent from the market. However, the demand for their tools and integrations quickly gained traction among developers confronting similar challenges within the expanding app subscription landscape.

Key Features and Integrations

The service provides developers with access to a real-time dashboard displaying crucial metrics, such as subscription revenue, churn rate, LTV (lifetime value), subscriber counts, and conversion rates.

This data can be shared with a wide range of other tools and services through integrations, including Adjust, Amplitude, Apple Search Ads, AppsFlyer, Branch, Facebook Ads, Google Cloud Intercom, Mixpanel, and Segment.

Rapid Expansion and Milestones

Following its launch from Y Combinator’s accelerator program, RevenueCat quickly onboarded 100 apps and surpassed $1 million in tracked revenue before securing its $1.5 million seed round.

Currently, over 6,000 apps are live on the platform, collectively managing more than $1 billion in tracked subscription revenue – a doubling of the app count since its $15 million Series A funding last August.

Revised Pricing Structure

The new funding will enable the company to adjust its pricing to make its tools accessible to a broader range of developers. Previously, pricing was set at $120 per month for charts and select integrations, or $499 per month for full integration access.

While suitable for larger companies, this could be prohibitive for smaller developers with revenues between $10,000 and $50,000 per month.

New Pricing Tiers

RevenueCat will now implement a percentage-based pricing model tied to an app’s sales. Developers with monthly tracked revenue (MTR) of up to $10,000 can utilize the service at no cost.

As their needs evolve, they can upgrade to the Starter plan at $8 per $1,000 in MTR or the Pro plan at $12 per $1,000 in MTR, gaining access to features like charts, webhooks, and additional integrations.

Empowering Developers of All Sizes

“I’m eager to provide these tools to developers, particularly those starting out, as they may be the key to exceeding the $10,000 revenue threshold,” Eiting states. “The benefits of a freemium model, or a generous free tier, are significant – it establishes your tool as the standard and minimizes friction for software service delivery. If the pricing is right – and I believe ours is – it becomes self-sustaining.”

Future Development and Team Expansion

The company intends to utilize the funds to expand its platform support beyond App Store and Google Play to include Amazon’s Appstore, and to grow its team.

RevenueCat recently appointed Jens-Fabian Goetzmann, formerly a PM at Microsoft and product head at 8fit, as its Head of Product. The company plans to double its headcount from 30 to 60 employees in the coming year, with hiring focused on design, product, engineering, sales, and other roles.

Vision for the Future of Subscriptions

“The trend is undeniably toward subscriptions – and for businesses, building this model requires significant developer time,” says YC Continuity’s Hariharan. “RevenueCat streamlines subscription implementation and provides a single source of truth for customer data. As developers create solutions to address global challenges, it’s crucial they can effectively monetize, grow, and support their most loyal customers. RevenueCat is pioneering the next generation of subscription management.”