Paddle Billing
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Billed as the next generation of workflow automation, Relay.app is an automation tool that combines one-click AI assistance and human oversight to save you time on repeated tasks.
The team behind the start-up is based across the US, Canada, and Europe and wants to make our working lives easier by automating the mundane and streamlining workflows across a wide variety of tools.
Keen to continually innovate, the founders – who include product, design, and engineering leaders from Google – have recently added AI features to their app, leveraging Chat GPT, for example, to suggest content for emails or to summarize notes – all of which can be approved by a human before being used.
Not surprisingly, Relay.app has been quick to gain traction. Its early customers include fast-growing companies like Ramp, Skyflow, Warp, Motion, Lumos, and Tavus. It has also raised $8.2 million in funding, led by Andreessen Horowitz and Khosla Ventures.
The challenge
The company’s goal is to reach a global audience.
“We have an ambition to build an automation tool that every single person in the world can benefit from daily,” says Jacob Bank, Relay.app’s CEO.
“The goal is to take Zapier and make it even more accessible to non-technical users, and even easier to use. So for us, having access to a global audience is critical.”
But growing at pace comes with challenges.
We were initially using Stripe for our payment infrastructure. But, we quite quickly realized that, as soon as we started getting international customers, we got into quite a bit of pain with international VAT and dealing with tax. Nobody told us before that we would end up in this whole messy situation.
Thijs van As, Head of Product, Relay.app
And this tax pain was only going to get bigger as Relay.app began attracting customers from all over the world.
"We just got our first customer in Mexico and I got this automated, scary email that said we owe tax in Mexico now. So I asked our bookkeeper what we’d need to do to be squeaky clean and follow the letter of the law in every country to set us up for success. And he said we would need to register for sales tax in every country we sold to.”
This was a daunting proposition for a lean startup with no internal finance team.
“Adding a tax registration for every country seemed totally crazy for the scale of our business. We had to either find a way of offloading the tax burden or seriously consider restricting the number of countries we could sell to.
Jacob Bank, CEO, Relay.app
The solution
Following extensive research, the Relay.app team discovered that the best approach was to leverage a Merchant of Record (MoR) – a legal entity responsible for selling goods or services to end customers. This would allow them to hand off international VAT and tax compliance and keep their focus on improving the product.
It quickly became clear to us that a merchant of record was worth it because it saves us the time and cost of trying to figure out how to file with every single tax authority in the world.
Jacob Bank, CEO, Relay.app
Thijs began researching MoR solution providers and found various independent reviews comparing the options available to him.
“Paddle really stood out,” he says.
“I wanted to move fast so I got on a call with them right away. A week later, we had a sandbox set up to understand the integration process. It was super easy, and we got great support. We got access to the Node.js SDK and, following a smooth trial, we migrated. We were fully live within a month.”
The team then set about migrating existing customers from Stripe to Paddle.
“It was much easier than we expected,” says Jacob. “And the key thing was all the work was stuff that could happen on our side and on Paddle’s side, not stuff that we had to ask any of our customers to do, like update their credit card details, which would have made it much more daunting.”
The relationship with Paddle doesn’t end here. Recognizing the value that can come from connecting a payments platform with an automation tool, Relay.app has now built an integration with Paddle that allows users to leverage Relay.app to trigger actions across their apps based on Paddle events.
“Our goal is to integrate with as many apps as possible,” Jacob says. “We prioritize the ones that we need ourselves, as well as those that our customers are asking for. As soon as we discovered Paddle, we knew we could unlock functionality by integrating with it.”
We got access to the Node.js SDK and, following a smooth trial, we migrated. We were fully live within a month.
Thijs van As, Head of Product, Relay.app
The results
Reduced risk
Thijs, Jacob, and the rest of the team are now confident that they are set up properly for international SaaS growth before they encounter any growing pains.
Now Relay.app has no restrictions on where or how it can sell and has the peace of mind that tax compliance is taken care of.
Increased revenue opportunities
By freeing itself of the tax liability burden, Relay.app has opened the door to new opportunities. “We’ve had a huge reduction in operational internal friction,” Jacob says. “Moreover, being able to sell globally has opened our eyes to use cases that could be really important to the business, but might have otherwise been missed.”
Moving forward, the company will continue to pursue its mission of building an automation tool that every single person in the world can benefit from daily. “Having access to a global audience is critical to us doing that – and that’s exactly what Paddle gives us,” Jacob says.
Set up to scale
With this in mind, Jacob and the team at Relay.app wouldn’t hesitate to recommend Paddle to other similar startups.
For other businesses that, like us, are product-led, self-serve, and globally applicable, you’ve got to go with a product like Paddle. It's the only way to achieve the business goals that'll unlock the next stage, whether it's a funding milestone, a growth milestone, or becoming cash flow positive.
Jacob Bank, CEO, Relay.app
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