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The company
Aithor is a fast-growing AI-writing assistant launched in 2023. The product was initially built to serve working professionals seeking to enhance their career prospects through master’s degrees, PhDs, MBAs, and professional certifications.
Today, Aithor has evolved into a multi-purpose tool to handle various routine writing tasks for students, professionals, and content creators.
Since launching in May 2023, Aithor has achieved rapid success, reaching $1M in monthly revenue. With a global user base spanning over 150 countries, Aithor aims to support time-strapped professionals looking to increase their market value.
The challenge
Just as Aithor’s growth began to take off, it encountered a significant challenge with its payment provider, Stripe.
Due to the seasonal nature of its business – peaking when students returned for new semesters and slowing down during holidays – the platform saw elevated dispute rates as users often forgot about subscriptions, leading to chargebacks.
Despite the disputes only making up about 5% of its revenue, Stripe held 50% of Aithor’s revenue for 45 days as a safeguard to cover any disputes or chargebacks.
We tried to say they wouldn’t need more than 5% of our revenue to cover disputes, but they were adamant they needed to hold 50%. Even though we’d made over a million dollars in revenue, the feeling was that they didn’t care about businesses of our size”
Dmitry Afonov, Co-founder and CEO, Aithor
Frustrated by this lack of flexibility and the impact on Aithor’s cash flow, Dmitry shared his experience on LinkedIn, where the post went viral, attracting significant attention:
“I posted about the situation on LinkedIn, and many companies reached out to offer help. That’s when we started evaluating our options”.
In addition to this, Dmitry and the team were being burdened with the complexities of managing sales tax globally themselves and wanted a solution that they could offload this to.
We have sales in more than 150 countries and it's just too difficult to take care of taxes ourselves. We're still a small startup. We don't have a big finance team. That's what brought us to start looking for a different payment provider.”
Dmitry Afonov, Co-founder and CEO, Aithor
The solution
Dmitry’s LinkedIn post attracted the attention of 40 payment solutions. Dmitry and his team cut this down to a list of 25 with Paddle coming out on top.
Paddle’s Merchant of Record (MoR) model was essential for Aithor, as it handled both sales taxes and disputes across their vast global user base.
As a Merchant of Record, Paddle takes on all the risks and responsibilities associated with managing payments, honoring refunds and chargebacks, fraud protection, and sales tax.
Additionally, Paddle’s payment solution allowed Aithor to automatically leverage multiple payment providers based on geography, ensuring optimized payments across regions.
Paddle came out on top of our list because it takes care of taxes, and disputes and chargebacks. So being a merchant of record, Paddle is a great solution for that.
And the second reason is payment orchestration. So under the hood, Paddle switches between different payment providers depending on circumstances like country and bank and that was a major selling point for me.”
Dmitry Afonov, Co-founder and CEO, Aithor
Alongside searching for a solution for its payment needs, Aithor was also evaluating tools to help improve customer retention. Paddle’s Retain product was yet another tick for this checkbox and ensured Aithor could leverage an all-in-one solution rather than integrate several different tools.
This dunning tool would help Aithor retain customers without needing to dedicate resources to fixing and retrying payment failures manually.
“I also wanted to find a solution to help with customer retention. Paddle has the functionality to retain customers out of the box – and that's all included in the price. So that was another tick for me.”
Beyond its technical advantages, Paddle stood out for its personalized support.
With its previous provider, Aithor didn’t have an account manager or point of contact and this was an important factor for it moving forward.
“On top of that, I would say that I was really pleased with the people at Paddle and how they approached me and how friendly they were. It was a feeling that you want to help.”
The Implementation
Having previously been a CTO at another company, Dmitry knew that implementing and launching Paddle quickly would be critical to ensuring a seamless switch from Stripe. He was immediately impressed with Paddle’s developer docs which clearly outlined how to get up and running.
There was a high level of expectation and Paddle just met that expectation. The developer documentation just made sense. We didn't need any extra calls. You open the documentation and you know how to integrate it. We almost didn't need any advice out of the box on how to integrate with it.”
Dmitry Afonov, Co-founder and CEO, Aithor
Aithor also needed to migrate customers from Stripe to Paddle and this process was remarkably smooth, involving minimal effort from Aithor’s team and without disrupting existing subscribers.
“Paddle made it easy to migrate tens of thousands of existing subscriptions from Stripe with minimal effort. That was really helpful.”
The Results
9% uplift in revenue compared to Stripe
Before Dmitry made them move to Paddle, he and the team wanted to conduct an A/B test comparing its performance against Stripe: the results showed a clear winner.
We did a 50-50 split of new customers purchasing through Stripe and Paddle over a week and Paddle delivered 9% more revenue in total. I didn’t expect that to be honest, I only wanted it to be at least not worse, so I was very surprised by that, and that was like a cherry on top of the cake.”
Dmitry Afonov, Co-founder and CEO, Aithor
The 9% increase was the average globally with Aithor’s key markets outperforming this figure.
Revenue uplift using Paddle:
- Global: 9%
- US: 14%
- UK: 13.3%
- MX: 12%
The key factor behind this was Paddle’s smart payment solution which automatically detects the best routes (payment service providers) to send payments to.
This is especially important with a global customer base like Aithor’s as transactions can be routed to Paddle’s Merchant Accounts in regions nearer to the end customer. This means payments are more likely to be accepted and it also reduces false declines.
Our primary market is the US, second is the UK, then LATAM, so we sell a lot in Brazil, Argentina, Mexico, Peru, and all those countries. MENA as well is a big region for us and Paddle covers them all. It all happens under the hood for us.”
Dmitry Afonov, Co-founder and CEO, Aithor
The Future
Looking ahead, Aithor is already putting plans in motion to expand into key markets like India, China, and Indonesia and serve an even bigger audience all over the world.
In 2023, we were only serving the English-speaking market, which is about 500 million people. Now, we’re looking to expand into India, China and Indonesia which will bring us closer to our goal of serving 5 billion people globally.”
Dmitry Afonov, Co-founder and CEO, Aithor
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