Business Model¶
SaaS Subscription with Usage-Based Components¶
Carbon Connect operates a SaaS subscription model with four tiers designed to capture value across the full spectrum of users -- from individual SMEs exploring grants for the first time to enterprise organizations managing multi-company portfolios.
Subscription Tiers¶
| Tier | Monthly Price | Target Segment | Key Capabilities |
|---|---|---|---|
| Freemium | EUR 0 | Discovery, lead generation | Browse grants, basic search, limited matching results |
| Professional | EUR 199/month | Active funding seekers | Full matching, AI application drafts, carbon profile, deadline alerts |
| Enterprise | EUR 999/month | Multi-company portfolios | Multiple company profiles, team access, priority support, API access |
| Partner | Revenue share | Consultants, advisors | White-label capability, multi-client management, referral commission |
Freemium as a Growth Engine
The free tier is not charity -- it is a customer acquisition channel. Users experience the value of curated grant discovery, and the natural desire to access AI-powered matching and application drafting drives conversion to paid tiers.
Revenue Streams¶
1. Subscription Revenue (Primary)¶
Recurring monthly or annual subscriptions across Professional and Enterprise tiers. Annual plans offer a discount, improving cash flow predictability and reducing churn.
2. Partner Commission Program¶
A complete partner and referral system generates revenue through third-party distribution:
| Partner Tier | Commission | Typical Partner |
|---|---|---|
| Standard | 10% of referred customer revenue | Individual consultants |
| Silver | 15% of referred customer revenue | Small advisory firms |
| Gold | 20% of referred customer revenue | Large consultancies, industry associations |
Partners bring customers through tracked referral links. The platform handles all billing and pays commissions automatically.
3. Usage-Based AI Components (Future)¶
As usage scales, premium AI features may be offered on a per-use basis:
- Advanced application review and optimization
- Custom grant research reports
- Carbon reduction strategy recommendations
Unit Economics¶
Cost Per AI-Generated Application¶
One of Carbon Connect's most compelling economic advantages is the cost of AI-powered application generation:
| Cost Component | Amount |
|---|---|
| Claude API cost per application draft | ~$0.001 |
| Infrastructure cost per request | ~$0.0005 |
| Total cost per application | ~$0.0015 |
Compare this to the EUR 5,000-25,000 that traditional consultants charge per application. Even at modest scale, the margins are exceptional.
Customer Lifetime Value Model¶
| Metric | Conservative Estimate |
|---|---|
| Average monthly revenue per user | EUR 175 |
| Average customer lifetime | 24 months |
| Gross margin | ~85% |
| Customer Lifetime Value (LTV) | ~EUR 3,570 |
| Target Customer Acquisition Cost (CAC) | EUR 500-800 |
| LTV:CAC Ratio | 4.5x - 7x |
SaaS Benchmark
A LTV:CAC ratio above 3x is considered excellent in SaaS. Our target range of 4.5x to 7x reflects the efficiency of product-led growth through the freemium tier and partner channel.
Revenue Projections¶
| Year | Customers | Avg. Monthly Revenue | Annual Recurring Revenue |
|---|---|---|---|
| 2026 | 1,500 | EUR 133 | EUR 2.4M |
| 2027 | 4,200 | EUR 168 | EUR 8.5M |
| 2028 | 9,500 | EUR 193 | EUR 22.0M |
Revenue growth is driven by three levers:
- Customer acquisition -- growing the user base through freemium, partnerships, and marketing
- Average revenue per user (ARPU) expansion -- upgrading users from Freemium to Professional to Enterprise
- Partner channel scaling -- targeting 40% of revenue from partner-sourced customers by 2028
Multi-Tenant Architecture as a Business Enabler¶
The platform's multi-tenant architecture is not just a technical choice -- it is a business model enabler:
White-Label Capability¶
Enterprise partners (banks, industry associations, large consultancies) can offer Carbon Connect under their own brand. The multi-tenant design means each partner's clients are completely isolated, and the partner sees only their own customer data.
This creates a platform-within-a-platform model where partners become distribution channels with minimal marginal cost.
Scalability Economics¶
| Scale Factor | Benefit |
|---|---|
| Shared infrastructure | Adding customers does not require proportional infrastructure growth |
| Shared grant data | One data pipeline serves all tenants |
| AI cost structure | Claude API costs are per-use, not per-tenant |
| Matching improvements | More users generate better collaborative filtering signals for everyone |
Cost Structure¶
| Cost Category | Approximate Share | Notes |
|---|---|---|
| Cloud infrastructure (AWS) | 15-20% of revenue | Scales with usage, optimized with spot instances |
| AI/API costs (Claude, Climatiq) | 5-8% of revenue | Per-use pricing, extremely low per-transaction |
| Data pipeline (scraping, processing) | 3-5% of revenue | Batch processing, efficient resource usage |
| Personnel | 50-60% of revenue | Engineering, product, sales, support |
| Other (marketing, legal, admin) | 15-20% of revenue | Standard SaaS overhead |
Infrastructure Cost Optimization
The platform uses several strategies to minimize cloud costs:
- Spot instances for batch processing (70-90% savings over on-demand pricing)
- Reserved capacity for baseline workloads
- S3 lifecycle policies automatically moving older data to cheaper storage tiers
- Serverless components (AWS Lambda) for intermittent workloads
Go-to-Market Channels¶
| Channel | Strategy | Contribution Target |
|---|---|---|
| Product-led growth | Freemium tier, in-product upgrade prompts | 40% of revenue |
| Partner program | Consultants, banks, associations as distribution | 30% of revenue |
| Content marketing | Grant guides, carbon compliance resources, webinars | 15% of revenue |
| Direct sales | Enterprise outreach for large accounts | 15% of revenue |
The partner channel is strategically important because each partner has access to dozens or hundreds of SME clients, creating a multiplicative acquisition effect with minimal per-customer cost.