# Lago Series A Financial Model Open-source billing and metering infrastructure for B2B software companies, sold via an open-core SaaS model. - Canonical: https://finamodel.com/startups/lago-series-a - Excel download: https://finamodel.com/startup-models/lago-series-a.xlsx - Category: Dev Tools - Model type: SaaS ARR / Valuation - Funding round: Series A - Funding: $15M - Founded: 2024 - Geography: Global; EU 31% of revenue, US 27% of revenue at time of deck [DECK slide 11/12] - Customer: B2B ## About the company Lago turns event streams into billable data for finance and engineering teams, covering metering, pricing, invoicing, payments, and analytics at up to 100,000 events per second. It supports subscriptions, usage, graduated, percentage, weighted, prorated, and prepaid-credit pricing through a business UI and REST or gRPC APIs. Its open-core model offers free self-hosted software plus paid Self-hosted Premium and Cloud Premium subscriptions. Engineers can inspect the codebase or self-host before buying, and Lago grew through inbound developer communities without a dedicated sales team. Mistral AI replaced Stripe Billing and Swan.io displaced Chargebee. Lago had 4,800-plus GitHub stars, 1,000-plus Slack members, and Product Hunt Product of the Month status, with recurring revenue growing in beta. The model should forecast OSS adoption, premium conversion, cloud versus self-hosted ARR, annual minimums, sales hiring, expansion, churn, infrastructure cost, and retention. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - Lago processes raw event streams (up to 100K events/sec) into billable data - metering, pricing, invoicing, payments, and analytics - Two surfaces: intuitive UI for finance/business users; REST + gRPC API for engineers - Supports diverse pricing models: subscription, usage-based, graduated, percentage, weighted aggregation, prorated, prepaid credits - Open-source codebase on GitHub (getlago/lago); engineers can self-inspect and self-host before buying - Positioned as "The Open Revenue Hub" - starting with metering and billing, expanding to full revenue stack ## Revenue model - Open-core model: three tiers: 1. **Lago Open Source** - self-hosted, free (community edition) 2. **Lago Self-hosted Premium** - self-hosted + premium features, paying 3. **Lago Cloud Premium** - hosted (cloud) + premium features, paying - Deck deliberately redacts the ACV floor: "ACV = $XX K / year of minimum spend (only software, no service)" - 100% inbound lead generation; no sales or marketing team at time of deck - GTM transition planned: hiring SDR/BDR, AEs, Solution Engineers, Business Ops, Content, SEO, Product Marketing in EU and NYC - No usage-based / transaction-fee revenue model described; pure software subscription ## Traction & metrics - 4,800+ GitHub stars - GitHub star growth: ~0 in July 2022 → ~4k by October 2023 (approximately 16 months) - Slack community: 1,000+ members - Product Hunt: #1 Product of the Month - Loved by 1,200+ Product Managers - Recurring revenue chart shows exponential growth from November 2022 to October 2023; no absolute revenue values visible on y-axis - EU = 31% of revenue; US = 27% of revenue - ACV = $XX K/year minimum spend (value redacted in deck) - Product still in Beta; no dedicated sales or marketing team - HackerNews posts: "Billing systems are a nightmare for engineers" (777 points, 359 comments); "Why doesn't Stripe use Stripe Billing?" (336 points); "Stripe's real pricing: a primer" (417 points); "Open Source does not win by being cheaper" (425 points) - Named customers / wins: Mistral AI (displaced Stripe Billing), Swan.io (displaced Chargebee) - Team: 10 FTEs, fully founder-led GTM ## Unit economics - CAC: 100% inbound, no paid acquisition, effectively $0 outbound CAC at time of deck - ACV minimum: $XX K/year (exact value redacted) ## Competition / moat - Direct competitors named: Stripe Billing (won against at Mistral AI), Chargebee (won against at Swan.io) - Broader competitive framing: home-grown billing systems and legacy incumbents - Moat sources identified in deck: 1. Open-source trust / developer inspection - shortens sales cycle 2. Extensibility - competes against home-grown builds by being more customisable 3. Connectivity / land-and-expand - integrates with existing back-office and finance stacks 4. Community flywheel - HN content, GitHub stars, Slack community drive inbound - Team moat: built Qonto's billing system (Qonto = European B2B neobank, $100M+ ARR, 150K+ customers, $5B valuation Series D) ## Team & funding ask / use of funds - Team: 10 FTEs; 8 were early Qonto employees - CEO: Anh-Tho; rest of team is product/engineering - YC S21; pivoted to billing in 2022 - Existing investors: SignalFire, Lee Fixel's Addition, Y Combinator (US); New Wave (EU) - Angels: Hugging Face CEO, MongoDB 1st GTM hire, OpenAI Head of DevRel - "Haven't touched a cent from the latest raise; N years of runway at current burn" - exact runway and raise size are redacted - Use of funds: Implied by GTM slide - hiring sales (SDR/BDR, AEs, SEs, BizOps) and marketing (content, SEO, product marketing, community) in EU and NYC --- ## Recommended financial model - **Archetype + why:** Open-core SaaS ARR model. Revenue is pure software subscription with ACV-based contracts; open-core funnel (OSS installs → cloud/self-hosted premium conversions) is the defining mechanic. Standard SaaS ARR waterfall applies with an OSS-to-paid conversion layer on top. - **Forecast horizon & granularity:** 3 years (Year 1–3), monthly granularity for Year 1, quarterly for Years 2–3. Rationale: early-stage with exponential revenue curve visible but no absolute revenue base disclosed; monthly detail needed to model the GTM hiring ramp. - **Key drivers & assumptions:** | Driver | Value / Rationale | | -- | -- | | Starting ARR (Month 0) | $0.5M–$1M; consistent with Beta-stage, redacted ACV, exponential curve starting near zero in late 2022 | | ACV per customer (minimum) | $XX K/year - exact value redacted; model should parameterise as a variable (suggest $20K–$60K range) | | OSS installs / new leads per month | Grows with GitHub star velocity; ~300 stars/month at deck date implies ~50–80 qualified inbound leads/month | | OSS → paid conversion rate | 2–5%; standard open-core benchmark for developer-infra tools | | Average sales cycle | 1–3 months; inbound-led, no outbound friction, product already tested by engineers | | Net Revenue Retention (NRR) | 110–130%; usage-based metering enables expansion as customers grow event volumes | | Gross Revenue Retention (GRR) | 85–90%; infrastructure switching cost is high once integrated | | Gross margin | 75–85%; cloud-hosted product has infrastructure cost; self-hosted premium has near-zero COGS | | Headcount ramp | 10 FTEs today; Series A proceeds fund sales + marketing hires in EU and NYC [slide 19] | | Revenue mix: EU vs US | EU 31%, US 27% at deck date; model currency split accordingly | | Blended ACV growth over time | Increases as GTM matures and enterprise deals close; start at minimum, grow toward $50K–$150K range | | Self-hosted premium vs cloud mix | ~50/50 split initially; cloud share grows as Lago Cloud matures | - **Scenarios (Base / Bull / Bear - which variables flex):** - **Base:** OSS→paid conversion 3%, NRR 115%, ACV grows modestly, headcount hired on plan - **Bull:** Conversion 5%, NRR 130% (strong usage-based expansion), faster enterprise ACV ramp, US market accelerates - **Bear:** Conversion 1.5%, NRR 105%, ACV stays at floor, GTM hiring delayed or under-performs - **Required sheets / outputs:** 1. **Assumptions** - all drivers as named inputs; ACV range, conversion rate, NRR, headcount plan 2. **OSS Funnel** - GitHub star growth → inbound leads → trials → paid conversions 3. **ARR Waterfall** - new ARR, expansion ARR, churned ARR, net new ARR, ending ARR (monthly) 4. **P&L** - revenue, COGS (infrastructure), gross profit, S&M, R&D, G&A, EBITDA 5. **Headcount Plan** - by function (Eng, Sales, Marketing, BizOps, G&A), timing, fully-loaded cost 6. **Cash & Runway** - opening cash, monthly burn, runway months (parameterise raise amount) 7. **Cohort / NRR** - customer cohorts, expansion and churn rates, LTV build 8. **Dashboard / KPIs** - ARR, MRR, customers, ACV, NRR, CAC payback, runway ## Frequently asked questions ### Is the Lago Series A financial model free? Yes. The Lago Series A model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.