Recurly, a startup that makes it easy for other companies to manage their subscription billing, has closed a $1.6 million round of seed funding. The round is being led by Polaris Ventures, with participation from Harrison Metal (Michael Dearing), FreeStyle Capital (Dave Samuel and Josh Felser), Larry Mohr, Dave McClure’s recently-launched 500 Startups, Dharmesh Shah, Sherry Coutu, Nivi Babak, Naval Ravikant .
Recurly’s service allows businesses to quickly implement a subscription billing system, handling tasks like credit card number storage (it also supports integration with financial software like QuickBooks). Recurly recently changed its pricing structure to a hybrid fee/usage model, which President Dan Burkhart says this was a result of user feedback. Under the new system, which went into effect July 1, new members can start using Recurly for $29 a month, plus 20 cents per transaction; pricing scales up from there, with the price per transaction dropping as volume rises. With these fees Recurly obviously isn’t going to be ideal for a company dealing with microtransactions of only a few dollars, but it’s affordable enough for many businesses.
The service has over 1,300 companies signed up, though not all of those are paid; Burkhart declined to give exactly how many paying customers Recurly has, but says that they have “hundreds” of them so far. He also noted that Recurly is getting traction with more than just web services — he says that they’ve also seen some offline businesses, including yoga studios and a law firm, use the service as a virtual terminal to manage their recurring fees.