Buzzy Y Combinator-Backed Billing Startup Raises $22 Million

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Lago, a French startup that offers open-source billing software, has raised $22 million.

The Paris-based company aims to solve a bottleneck in modern businesses identified by the founders while working on similar problems at French fintech unicorn Qonto.

Founded in 2021, Lago utilizes the open-source community to help businesses like Mistral, Together AI, and Swan manage their payments and billing needs.

“To optimize revenue pricing, the biggest bottleneck for companies is billing, but businesses often have very custom use cases, so they build systems from scratch and want control over those systems,” Anh Tho Chuong, Lago CEO and cofounder, told Business Insider.

“Open source solves for this, and because we create the data, we can offer better data analytics features for organizations.”

Y Combinator-backed Lago has been under the radar but is now announcing both a $7 million seed round and a $15 million Series A round, the latter of which was led by Matt Turck at FirstMark Capital.

Other investors include SignalFire, which led the seed round, alongside New Wave, Y Combinator, and Addition which also invested across the two rounds.

The company has remained lean in recent years, with just 10 staff members, but this will more than double in the coming year as Lago brings in a business team and engineers to help build and scale its products.

In addition, Lago, which has around 30% of its business in the US, will begin to scale out its offering outside of Europe.

“Our target is companies that build billing themselves, where they didn’t have any other choice, but with us, if they want to use another vendor or payments processor, they can build that in our system,” Chuong added.

Lago believes its flexibility around infrastructure will help it win more clients globally as businesses look to create more customizable revenue stacks.

“Billing infrastructure has been a vexing issue for generations of software and internet companies, and the problem is only getting worse as the industry transitions from subscription to usage-based billing,” FirstMark Capital’s Turck said.

Check out Lago’s 22-slide Series A pitch deck below: