Recharge Acquires Subscription Platform Skio for $105 Million Cash After Startup Raised $8 Million

Recharge has completed the acquisition of subscription management platform Skio in a deal valued at $105 million in cash.

Credit: Oisin O'Connor / LinkedIn

The exit represents a significant multiple for the Y Combinator alum, which had secured only $8 million in venture capital since its founding in 2020.

Skio founder Kennan Frost announced the sale on Thursday and provided details of the company's rapid growth from a niche Shopify app into a major market player processing billions of dollars in annual transactions.

According to a post by Frost on social media platform X, the company had reached $32 million in annual recurring revenue and processed approximately $4 billion in payments before the sale.

On the other hand, Recharge CEO Oisin O'Connor posted a heartfelt acquisition message starting with:

"Recharge just acquired Skio for $105M, the largest private acquisition in ecom tech. 5 years ago, I thought Recharge was dead..."

The startup emerged from the Winter 2021 batch of Y Combinator and established itself as a direct competitor to Recharge by focusing on a streamlined user experience for e-commerce brands.

Frost, a former software engineer at Pinterest and a college dropout, started the venture after leaving his previous role during the early months of the pandemic following a period of personal difficulty.

"Skio just sold for $105M cash at close on $8M raised," Frost stated in his announcement.

The founder credited the success of the company to a lean operational model and a move toward profitability early in its lifecycle.

Frost stepped away from day-to-day management about two years ago to allow a professional leadership team to scale the business while he explored other projects.

The sale effectively merges two of the largest providers of recurring billing tools in the Shopify ecosystem.

The transaction comes as the e-commerce sector sees increased consolidation among software providers that assist direct-to-consumer brands with retention and revenue growth.

Skio differentiated itself by offering faster site speeds and a customer portal that merchants found more intuitive than older systems. By acquiring its most prominent rival, Recharge gains a substantial base of merchants and the modern infrastructure that helped Skio gain market share quickly.

The merger allows Recharge to integrate Skio’s features into its broader suite of tools for online merchants.

The two companies were once fierce rivals and the deal now aligns their resources to better compete with a growing number of smaller subscription apps entering the market.

Frost is now focusing his efforts on a new company called Icon, which utilizes artificial intelligence to generate advertising content, and the Skio staff will work with Recharge to ensure a transition for existing users.