Lago: Open-Source Billing Done Right
Lago is the rare open-source project that takes an unglamorous infrastructure problem — billing — and executes it at production quality. Founded in 2022 by former Qonto engineers, Lago raised $22M from Balderton Capital and has become the go-to choice for engineering teams who want full control of their billing infrastructure without building it from scratch.
What It Is
Lago is an open-source billing API that handles metered billing, subscriptions, invoicing, credit notes, and usage-based pricing. It ships as a Docker container that runs in your own infrastructure, or as a fully managed cloud offering (Lago Cloud). The core product is MIT-licensed — you can deploy it, customize it, and run it without paying Lago a cent. The business model is managed hosting plus enterprise support contracts.
The architecture is event-driven: you emit usage events to Lago's API, define billing rules (charge models, aggregation types, pricing tiers), and Lago handles the rest — aggregation, invoice generation, and webhooks for your downstream systems. Support for standard subscription models, graduated pricing, per-unit, package pricing, and percentage-based charges is first-class.
Who It's For
Lago's ideal customer is an engineering-heavy company that has outgrown Stripe Billing's usage-based capabilities but doesn't want to pay Metronome or Orb prices — and has the engineering capacity to deploy and maintain a self-hosted billing platform. Infrastructure companies, developer tools, and fintech companies with complex billing requirements and strong engineering teams are the core constituency. It's also a strong fit for companies in data-sensitive industries (financial services, healthcare) where hosting billing data outside your own infrastructure creates compliance issues.
Pricing Model
Lago Community Edition is free and open-source — deploy it yourself, no cost, no usage limits, no license fees. Lago Cloud (managed hosting) starts at $200/month for the Starter tier, with Enterprise pricing via sales for advanced features like priority support, SAML SSO, and dedicated infrastructure. The total cost of ownership for self-hosted Lago includes engineering time for deployment and maintenance — budget 1-2 engineer-weeks to deploy initially, and a few hours per month to maintain. For most teams, this is still significantly cheaper than Metronome or Orb at equivalent usage volumes.
Key Strengths
- No percentage-based pricing — Unlike Stripe (0.5% of revenue), Lago doesn't take a cut. For high-revenue companies, this alone justifies the operational overhead of self-hosting.
- Full data ownership — All billing data lives in your infrastructure. No third-party data sharing, which matters for enterprise contracts with data residency requirements.
- Open source transparency — You can read the code. No billing black box. Enterprise buyers increasingly ask "how does billing work" and Lago lets you answer with a GitHub URL.
- Strong usage-based support — Lago handles complex aggregation types (sum, count, max, unique count) and all common charge models. Better UBB support than Stripe Billing out of the box.
- Active development — The Lago team ships frequently. The GitHub activity is healthy, the roadmap is public, and the community is responsive.
Key Weaknesses
- Operational overhead — Self-hosted billing is real infrastructure. You own the database, the backups, the monitoring, the upgrades. If you don't have ops capacity, Lago Cloud is available but removes the cost advantage.
- Less mature than Stripe/Chargebee for subscriptions — For pure subscription billing without complex usage, Lago has more configuration overhead and less turnkey convenience than Stripe Billing or Chargebee. The tradeoff is worth it if you need usage complexity.
- No native payment processing — Lago handles billing logic and invoicing but doesn't process payments. You still need Stripe, Adyen, or another payment processor. This means two integrations instead of one, though Lago has documented Stripe + Lago as a standard pattern.
Best-Fit Use Cases
Lago is the right call when: your billing complexity has outgrown Stripe Billing, you have a small-to-mid engineering team that can own the infrastructure, you need data residency controls, or you want to avoid percentage-based SaaS billing fees at scale. Avoid it if you need billing live in 48 hours or if you have no engineering capacity to maintain self-hosted infrastructure.
Sources
- Lago — Pricing Page
- Lago Documentation
- Lago on GitHub — MIT-licensed source, activity, issues
- Hacker News — Lago Show HN thread — community reception, use case discussion