Chargebee, a software firm focused on revenue management and customer retention, has bought Trainn, an AI-based customer tracking platform, as the SaaS industry transitions to an AI-dominated future.

"Teaming up with Trainn brings together a promising possibility for both Trainn and Chargebee to propel our combined mission of equipping customers for an ever-changing, innovation-ignited world using AI," said Krish Subramanian, CEO and co-founder of Chargebee, in a March 27 memo that was seen by Moneycontrol.

The Age of AI for SaaS

This takeover is at a time when the industry captains stress SaaS players need to adopt AI in order to keep pace.

"SaaS, as it stands today, is outdated—let's adapt, let's change, and let's compete. If your strategy doesn't include AI, toss away your roadmap," Freshworks founder and chairman Girish Mathrubootham told an industry gathering recently.

As a part of the deal, Trainn's 200 clients will now shift to Chargebee. "Trainn's strong concentration on AI-powered solutions opens up huge possibilities," Subramanian said.

The terms of the deal were not made public, but it cannot be massive. Trainn was launched in 2020 and had so far raised a $700,000 seed round from Speciale Invest and others, as per private market data provider Tracxn.

Chargebee's AI-Powered Growth

This is the second acquisition for Chargebee in a month, indicating the company's increased focus on AI. Recently, the Tiger Global-backed company acquired Inai, a payment management and tracking software firm, to incorporate AI into its products.

In another memo, Subramanian pointed out the changing payments environment, noting that Chargebee needs to accommodate new approaches like embedded payments, digital wallets, buy now, pay later (BNPL), real-time payments, and AI-based customer experience improvements. "Today, customers' infrastructure is burdened with keeping track of all these complexities," he added.

Although the integration specifics for Trainn and Inai are not known yet, Chargebee's strategic buys are an indication of a wider industry trend.

SaaS and AI: Competitive or Complementary?

Although some executives believe AI will displace conventional SaaS models, others view it as an additive, not a replacement.

Manikandan Vembu, the new CEO of software behemoth Zoho, recently said that AI is an optimizer for SaaS and not a replacement, as enterprise needs and challenges continue to exist.

In spite of differing views, one thing is certain AI is now an essential element for SaaS firms like Chargebee as they try to remain relevant in a fast-changing industry.