|
|
|
š¦ Unicorner Startup of the Week: Butter
|
|
|
|
|
|
|
|
|
|
āļø Notes From The Editors
|
|
Unicorner event alert! Founders and investors: join us and the Wefunder team in SF on Friday, February 3 for a great happy hour with great people. Letās have a good time, food and drinks included. š„
Highly recommend signing up if youāre thinking about raising (or investing) some new capital soon. Sign up link is here. Space is limitedāyouāll hear back from us a few days before the event with confirmation. See you there!
|
|
|
|
|
|
|
|
|
Recovering lost subscription revenue
|
|
|
|
|
|
|
|
Butter is helping companies reverse and reduce accidental payment churnāin other words, itās recovering customers whose subscriptions have been accidentally canceled for a variety of reasons. The company uses patented machine learning models to analyze factors surrounding an individualās subscription and cancellation, such as the payment method, geography, and the error that caused a payment failure. From there, Butterās technology can determine how to recover the payment and retry the subscription charge.
|
|
|
|
|
|
|
|
|
|
|
š° Business Model
Butter runs on a revenue share model, where the company takes a percentage, usually 10%, of revenue that would have otherwise been lost without its services.
š Traction and Fundraising
- Raised $22 million Series A from Norwest Venture Partners, Atomic, Spring Tide Capital, and Transpose Platform
- Reported $6 million in revenue in 2022
- Per website, estimates $20 million to $30 million recovery in subscription fees is possible for a company making $500 million in revenue
š« Founders
- Vijay Menon, CEO: Previously Product @ Scribd, Product @ Dropbox, Product @ Microsoft, Economics and Statistics @ Duke
š¼ Opportunities
š® Our Analysis
According to Butterās website, over 3 billion people worldwide have lost access to services they wanted to use due to accidental subscription cancellations. It amounts to more than $443 billion in lost revenue a year. Butterās CEO Vijay Menon first began to recognize this problem through his roles at Microsoft, Dropbox, and Scribd. A lot of his time was spent working to eliminate accidental cancellations, like ones that occur due to payment failures and incorrectly configured cancellation flows. It doesnāt sound like it should be a big problem, but when a companyās revenue scales, so does the likelihood of these cancellations. The impact on revenue can mean losing millions of dollars from otherwise satisfied customers. While some customers might take initiative to try and resubscribe, this isnāt always the case, and frustration can drive users to competitors. Butter is designed to fit seamlessly into a companyās payment flow. It offers a number of no-code integrations with payment providers, and it does its payment analysis quietly in the background. If a payment fails, it checks a variety of factors around the failure before deciding how to handle it best. On average, Butter claims to increase ARR by 5% through its payment fixes. It may seem simple, but the numbers are promising.
š Further Reading
|
|
|
|
|
|
|
If you enjoyed today's article, forward this email to a friend!
If you're just seeing this email now, subscribe here.
Made with š by the Unicorner Team š¦
|
|
|
|
|
|
|
|
|
This email was sent to
You received this email because you signed up with Unicorner.
|
|
|
|
|