The emergence of the software-as-a-service business model was genuinely revolutionary. As well as spawning many other “as-a-services” – often rolled out whenever a business is looking to disrupt a particular industry – it allowed SaaS companies to far more quickly and easily offer products to anyone, anywhere in the world.
The model has been around for some time now, and as it’s developed, an increasing number of startups and new businesses have opted to operate as SaaS companies.
And these companies have, like many other parts of the digital and technology industry, seen a boom thanks to the covid-19 pandemic. Despite a downturn in many parts of the economy, enforced homeworking and a fast-forwarding of eCommerce and digital services means that many consumer-facing technology companies and the business-to-business operations that support them have enjoyed a major uptick in demand.
Other businesses further down the chain have got a corresponding boost. Paddle, a London-based technology company, exists to serve SaaS companies and is doing very well out of it.
Paddle recently received £52 million in series C funding, led by FTV Capital, alongside Kindred Capital, Notion Capital, and 83 North. The funding comes after four years of big growth, recording average annual revenue growth of more than 175% and doubling in the last year alone, according to the company.
Those enviable figures are clearly driven by significant demand, suggesting SaaS companies are themselves growing fast – growth that is only accelerating with the business, social and economic changes driven by the covid-19 pandemic. According to the Sunday Times, it has more than 2000 software companies on its books.
Even before the series C funding, the company was doing well. It had already received £24 million in previous funding rounds, and its latest financial figures saw sales of nearly £8 million.
What does Paddle do?
The company’s main aim is to smooth out the complex administrative and operational problems that cause a hassle for SaaS businesses, making it easier for them to focus on things like building products and selling them, rather than admin.
According to the company’s founder, Christian Owens, doing things like “dealing with payments, managing subscriptions, localizing checkouts in multiple languages, and handling tax and compliance across dozens of markets is hugely complex and each of these challenges makes it harder for businesses to scale quickly.”
Paddle’s main product, the Revenue Delivery Platform, is designed to help smooth out those problems for B2B SaaS companies. “This modern approach to revenue delivery empowers CEOs to make informed business decisions quickly and confidently, and frees up teams to focus on the core business rather than operational headaches,” Owens said.
According to TechCrunch, the covid-19 pandemic has forced businesses that might have been considering moving to the cloud to find tools that will speed the process up. Companies like Zoom, Box, Slack, Okta and Salesforce have seen a spike, TechCrunch said – and Paddle will no doubt have in turn benefitted.
What’s more, the Sunday Times reported that Paddle has advised on the implementation of flexible payment plans for customers, whose support requests have increased by 20% during the crisis.
This latest funding round illustrates how the complex ecosystem of technology companies, and those that support them, has proven extremely resilient in the face of pandemics and recessions.