Chargify, the subscription billing platform, announced today that it has acquired event streaming company, Keen for an undisclosed amount. One interesting aspect of this deal is that both companies are part of the Scaleworks private equity firm's stable of companies.
Keen gives Chargify an event streaming business, and it has taken advantage of that by adding an event-based billing component to the platform.
Chargify CEO Paul Lynch believes that event-based billing is the next step in subscription pricing. Just as serverless architecture provides a way to pay for only the infrastructure resources you use and no more, event billing provides a way to pay for the software services you use and no more.
"It's a unit-based kind of billing model where you're paying down to the very last unit of what you're consuming," he said. That means that you are no longer paying a fixed monthly or yearly price for services you may or may not use. Instead, you only pay when you open the service and actually use it.
It sounds logical, but he says it's actually a hard problem to solve without the kind of technology Keen provides. "No one is delivering event-based billing. So I asked myself why, and it's because the Keen component, the event data management component is so difficult to build and to manage," Lynch explained.
He says that having Keen in the same building, and part of the same family of companies certainly helped make the deal happen. "The fact that it was owned by Scaleworks is obviously an enormous benefit. Going out and buying a business, finding that business to acquire is super hard. The fact that Keen was sitting down the hall was an unbelievably surreptitious kind of benefit," he explained.
That said, the acquisition still involved all the kinds of steps, hurdles and due diligence that would be required in any similar exercise. "You're still going to the board. You're still putting together board pricing projections. You're still looking for Board approval," he said.
While Keen's technology becomes an integral part of the Chargify platform with the acquisition, Lynch said that the company will continue to operate as before servicing its 800 customers and building on its product set.
The event-based billing feature is available starting today.