In this case study…
Stedi is a developer-focused platform for building business system integrations. In 2021, Stedi needed to develop usage-based pricing (UBP) capabilities for their APIs, but struggled to find a solution with the metered billing features they required.
After discovering m3ter, the Stedi team was excited to see they were a developer-focused data company that could effectively solve the metering and billing challenges they were facing. Working with m3ter has enabled Stedi to seamlessly implement usage-based pricing and gain insight into their metering and rating data.
Founded in 2017 by Zack Kanter, Stedi’s goal is to automate every B2B transaction on the planet, which they work toward by providing a flexible platform for building powerful EDI systems at low prices.
To date, Stedi has raised $71 million from Addition, Stripe, Union Square Ventures, First Round Capital, Bloomberg Beta, and other top investors.
In 2021, Stedi had built a number of high-volume EDI implementations and wanted to break them down into small APIs that could be offered to customers on a self-service basis. To do this, they needed to move toward metered pricing, but struggled to find a solution that would fit their needs.
At this point, Stedi had evaluated and decided they would have to go the “build” route – but then they were introduced to m3ter.
According to Zack, there were three key points that led to Stedi choosing to work with m3ter:
m3ter framed the challenges of usage-based pricing not as a pricing or a billing problem, but as a data problem. Zack says he sees most of the companies in this space as billing companies, while m3ter is a developer-focused data company.
Stedi had spoken with other early-stage usage-based pricing providers who could articulate the challenges inherent in the pricing strategy, but none of them could articulate how exactly they would go about building a product to solve it. When Zack saw m3ter’s architecture and how they chose to build their platform, it bore an uncanny resemblance to the hypothetical system that Stedi’s engineers had designed to solve billing itself – and it was cloud-native and fully-serverless to boot, just like Stedi would build it.
Zack knew that m3ter’s founders, Griffin Parry and John Griffin, along with many other members of the m3ter team, had the experience of seeing an exceptional metered billing system from inside AWS. They had seen it in action, understood how it would work, and were setting out to offer a metering and pricing engine as a SaaS product.
According to Zack, Stedi has been very satisfied since their first usage-based product went live with m3ter. “When you watch a rocket launch, you hear the engineers in Mission Control saying ‘Nominal, nominal’ over and over again – it means there’s nothing to report and everything is going according to plan. That's what you want out of your billing system. You just want it to do the things that it says it's going to do. The results have been that it calculates the customer's bills – and that's exactly what you want.”
m3ter’s functionality has enabled Stedi to roll out new pricing tiers almost instantaneously. After concluding that they needed to expand their “free” tier, Stedi was essentially able to achieve this change in less than five minutes and backdate it to the first of the month.
While other metering tools may have required roll-ups or summary information from the customer side, m3ter simply takes all Stedi’s data and does the calculations for them.
The company is also able to manage their entire billing team with just three people: two engineers and one business operations person.
Zack says that without m3ter, Stedi’s speed to market would have taken a big hit, as they would have needed to build a solution in-house. They also may have had to sacrifice the way in which they were able to price their products for customers. “You don't want your business to have to change to meet the systems that you're able to use,” he said. “You hopefully are getting systems that can allow you to achieve the business goals that you want to achieve in the way that you want to achieve them.”
In fact, Zack had so much conviction about the impact m3ter brings for companies that he introduced his Series A lead investor (Union Square Ventures) and invested alongside them.
On Stedi’s experience as a customer working with the m3ter team, Zack said this: “The highest praise that you can give a software company is that they are responsive and they do what they say they're going to do, by the time they say they're going to do it. That’s m3ter.”
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