The concept of capturing recurring revenue through subscriptions always clicked for
Now Fattmerchant is capitalizing again on the subscription concept by taking a majority stake in Canadian billing software firm Fusebill, which competes with Chargebee and Chargify in the fast-growing arena of managing subscription revenue for merchants.
Fattmerchant did not disclose financial terms of the deal, in which the Florida-based acquirer and Ottawa-based Fusebill will combine similar-sized staffs for a total headcount of about 270.
“Fusebill’s software is very robust for recurring-style invoices and subscription billing, which is where most businesses seem to be going,” said Madhani.
Fattmerchant’s core business is still selling payment processing services directly to businesses, but recently the company has signed up dozens of independent software vendors whose revenue model is based on subscriptions, according to Madhani.
“Our platform is fairly horizontal, and on the recurring-payments side it wasn’t that deep,” Madhani said.
Ten-year-old Fusebill has 12,000 customers using its services for a wide range of use cases, from media companies like Business Insider and horse racing publisher Churchill Downs to commercial operators getting into internet-of-things payments, said Fusebill’s CEO Tyler Eyamie.
Companies whose revenue is mostly based on subscriptions tend to have very specific requirements, which can include any combination of online and in-store services, the delivery of digital or physical goods and metering of services via the internet of things, according to Eyamie.
“The IoT is a growing area for us as increasingly these services need to have revenue recognized," he said, noting that Fusebill manages billing for thousands of connected devices.
Fattmerchant's deal will also generate fresh payment-processing revenue for both companies, with Fusebill planning to point its customers toward Fattmerchant's services, Eyamie said.
“We didn’t have a payments processing partner before and we'll capture that revenue now with Fattmerchant," Eyamie said.
Both Fattmerchant and Fusebill operate platforms with an API-first approach, which helped to cement the match, Madhani noted.
“We feel like the combination lets any kind of customer or partner work with both brands, giving us both a deeper toolset,” she said.
With a base in Canada, Fattmerchant is now looking for its next international market.
“This is our first step in crossing borders, and because international payments are becoming important to global independent software vendors, we see a lot of potential for expansion,” Madhani said.
