When we last checked in on SnapBill, the cloud-based Swiss Army knife of recurring billing systems, it was yet to execute on its international ambitions. Today, SnapBill supports 34 currencies and claims the type of flexibility that allows it to handle just about any tax configuration.
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SnapBill endeavours to be a complete billing solution. Its users can bill their clients as well as add recurring products and services to their clients’ accounts to automate the entire invoicing and payment collection process.
A stealth South African success story, co-founder Jaco van Wyk tells us that the company is currently seeing revenue in the millions of Rands and that SnapBill experienced year-on-year growth of 180% in 2012. Since its international launch in 2011 the startup has experienced exponential growth in its international customer base — SnapBill currently has 5 000 registered users globally.
SnapBill is used by startups — 22Seven, 10Layer, Everlytic — and publishing houses like the Daily Maverick. It’s used by gyms, IT businesses, ISPs and insurance companies, who use SnapBill to automate premium collections via credit card or debit order. SnapBill’s customer base is diverse. Anyone from condom vending machine agents to businesses delivering milk on a weekly basis use SnapBill, van Wyk tells us.
Despite local and international interest from angels and VCs, SnapBill has chosen to remain self-funded.
“We decided to bootstrap the business from the start and have to date taken no external investment. We have been profitable since day one. We chose to grow organically and this has ensured we retain profitability,” says van Wyk.
SnapBill’s ascent hasn’t been without peril, however.
“When we started hiring we struggled to find the right people. Those who had an understanding of what it took to work on a startup. Through much trial and error and an incredible amount of money down the drain we seem to have finally cracked it,” says van Wyk.
“We realised that things do go wrong, no matter how well planned,” he added. Facilitating millions of Rands in collections, SnapBill had numerous close calls and even lost a considerable amount of money due to an initial lack of stability when dealing with businesses and collections larger than it had expected.
SnapBill’s business model was also under threat. Its free package was becoming too costly to support and the decision was made to cut it.
“We changed our pricing from R50 per month for Startup to R175 per month, R350 per month for Premium to R450 and changed our Enterprise account from only having a per client fee to also having a minimum fee of R950 per month. Our pricing changes came to be as we revisited the sustainability of our original pricing model. We realised it was not feasible to continue with our current model and had to make the change in order to ensure the best possible solution for our users,” says van Wyk.
SnapBill faced a familiar problem. It’s difficult to price a product or service as a startup, especially with no direct competitors or benchmark to parallel.
“The only real way is trial and error, but you need to be extremely careful to not alienate or lose your users trust in the process,” advises van Wyk.
Then there was the international expansion. SnapBill considered opening a branch in the US, but being a bootstrapped startup, the exercise proved to be challenging.
“We spent much of our startup budget on attending TechCrunch Disrupt in New York, seeing businesses (including PayPal) in San Francisco and ended up having nothing to show for it,” says van Wyk.
If funding could help SnapBill enter the US market, why has it continued to refuse it? For one thing, SnapBill is reluctant to give up ownership, but more importantly, international expansion just isn’t a priority currently.
“Our main office is in Cape Town and its an awesome place to be. We won’t easily consider moving. We are all really passionate about South Africa and building a world-class business from here. If we looked at opening international offices or wanted to increase our growth rate we would certainly need an investment,” says van Wyk.
Despite the challenges, SnapBill found international success, by first, building a flexible recurring billing system, but more importantly, using South Africa as a year-long testing platform. It also moved to Amazon Web Services — SnapBill has multiple servers in almost all the Amazon zones globally — improved its API, beefed up its statistics and reporting with attrition graphs, cohort analysis and customer age analysis, and improved data import and export facilities.
By using existing payment gateways such as PayPal, SnapBill managed to expand internationally without getting caught up in red tape.
SnapBill automates business invoicing, facilitates payment collections from clients via existing payment gateways, bank or bureau and the funds collected end up directly in the client’s own account. SnapBill reads in the reconciliation results and ensures the billing system is updated accordingly. SnapBill doesn’t touch any money in the process.
Where to from here? Ventureburn recently took a look at entrepreneurship in the enterprise — SnapBill has similar ambitions. Although lucrative, we spent some time talking to van Wyk about the challenges.
“The cost and time required to acquire an enterprise client is definitely a major hurdle especially for a self-funded startup. Enterprise have specific requirements which must be met and in order to satisfy these you end up wasting time on compliance and the development of features that may not even be of interest or use to the majority of your target and user base,” he says.
In order to better compete with the likes of Recurly, Chargify, Fusebill and Chargebee, SnapBill is taking a step back to make its setup and billing processes easier. The startup also is working on increasing its enterprise uptake, particularly in South Africa, Australia the United Kingdom and the Americas.
