The VC Tap Is Flowing in Agile Billing

The Future of CLM is Data 1st

Contracts contain vital information – pricing agreements, metrics, obligations, and entitlements are just a few examples. This data is just as essential to a company’s ability to operate as its financial data, yet the majority of Contract Lifecycle Management (CLM) tools treat contract data as an afterthought.

Most CLM products on the market today are designed with a “Document-1st, Data-Maybe” approach whereby legal documents take precedence over data.

• In the rare instance when contract data is accessible, it is typically extracted with “document-scraping” methods, increasingly based on machine learning (ML) and generative AI tools.
• Even with an overlay of AI/ML, the underlying architecture is a legacy design that does not address the need to make each data element accessible.

Why not turn the CLM concept on its head and focus on data first?

• Companies could build documents with legal clauses around the contract data, instead of trying to extract data after the fact.
• If contract data is captured upfront and rules are created for its storage, management, access, and sharing, then organizations can create “live” contract objects that are accessible to a broad range of enterprise applications.
• A data-1st approach fosters stronger alignment between an organization’s operational goals and its legal frameworks, obligations, entitlements, constraints, and risk management.

Get the research note to find out what a state-of-the art, data-1st approach to CLM looks like, the role of AI in data hygiene, and the benefits and risks of data-1st CLM adoption.

For more about CLM application maturity, read The Six Stages of CLM.

The VC Tap Is Flowing in Agile Billing

On January 24, 2024, Agile Billing provider BillingPlatform raised $90 million in growth equity investment from FTV Capital.

• BillingPlatform announced four big new logos last year: J.P. Morgan, CooperSurgical, Juniper Square and Class.
• In our Agile Billing Top 50 buyer’s guide published last year, MGI named BillingPlatform the #1 rated supplier in the Agile Billing market, with an MGI 360 Rating™ of 64 and a positive analyst outlook.
• We noted that BillingPlatform has gone through a period of intense maturation since the last rating cycle, sharpened marketing execution, and extended its product reach while improving overall packaging.
• While future success is not guaranteed and maintaining elevated growth is always a challenge, BillingPlatform now has the financial resources to expand its channel and market reach.
• Get the BillingPlatform 360 Rating here.

A week later, on January 31, early-stage usage billing startup Metronome raised a $43 million Series B. The fundraising round was led by NEA, a16z, and General Catalyst.

• The company is finding success with customers in the AI market: OpenAI, Databricks, Anthropic, and NVIDIA are among Metronome’s marquee logos.
• The Agile Billing Top 50 buyer’s guide also named Metronome as an honorable mention supplier to watch. (Metronome’s honorable mention is on page 76.)
• In the last edition of The Margin, we discussed how Stripe’s acquisition of another early-stage consumption biller, Octane, could signal the beginning of a consolidation phase. Many early-round companies are accelerating their logo velocity but struggling to maintain and grow long-term, paying customers.

Zoom out | We expect to see M&A and financing activity ramp up in the Agile Billing market over the next 12-24 months.

• Support for usage and consumption business models remains in demand from companies of all sizes, and the recent BillingPlatform and Metronome transactions reaffirm high investor interest in the Agile Billing market.
• Consumption models are one of the key trends in this market, and young companies (Series A-C) that provide usage billing and built-in metering capabilities will likely be targeted for both funding and acquisitions.

Between the lines | About a dozen new billing companies have come to market in the past three years. Some are trying to differentiate with support for usage/consumption business models, and another cohort is focused on delivering an integrated quoting-billing-revenue recognition solution for tech companies.

• Market surveys of organizations of all sizes consistently point to user demand for billing solutions that support ALL business models, not just subscriptions and not just usage.
• To be competitive in today’s market, product managers and sales teams need the ability to package their products – and their price offers – in whatever way the end customer dictates.
• To truly support consumption billing, a robust mediation capability is a prerequisite. This is a shortcoming of many recently-founded usage and subscription billing companies.

The bottom line | While there may be a surplus of startup solutions, capable management teams with successful track records are in short supply.

• The agile monetization markets – including but not limited to billing – are likely to see more of the consolidation that kickstarted 2024.
• Select few companies will receive fresh funding on attractive terms.
• A larger number of billing companies will get re-capped or find strategic partners.

Where Is the Software Industry Growing?

Which country has the fastest-growing software industry in the world? What about in Europe? What are their growth rates?

The answers to these questions (Australia, France, and 19.4% and 15.0%, respectively) and more are available in MGI’s new, interactive research note, Tech Trends: Mapping the Software Industry.

Hover over any country to see the compound annual growth rate (CAGR) of its software industry. You can scroll, sort, and compare growth leaders globally (or isolate Europe or APAC).

Key takeaways | Australia, France, and South Korea are global software growth leaders.

• The US has the largest software industry in the world, and the tenth-fastest growing globally.
• Germany has the largest software industry in Europe, also the tenth-fastest growing within that region.
• China has the largest software industry in the Asia/Pacific region, and the fifth-fastest growth rate in APAC.
• Keep an eye on the rapidly expanding software markets in New Zealand, Thailand, Canada, and Spain.

Explore the software growth map here. (This research note is complimentary – you don’t need to be an MGI client to use it!)