How Mistral committed to Lago in 17 days and went to prod in 52 days

Introduction

You’ve probably heard from Mistral because they shipped 14 frontier models in just 18 months. But Mistral doesn’t view itself as yet another AI model maker. Their mission is to “externalize what [they] build for science to the developer community”.

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Anyone who believes that AI will transform how we all live and work, then anyone should be able to access the models that enable us to do this.

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But while Mistral builds for science, they’re still a company that needs to bill its customers—which is why they started working with us.

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Challenges

Mistral reached out to Lago in October 2023, before they launched their paid product. They had heard of Lago through Hacker News and especially felt that our anti lock-in and pro open-source approach resonated with their ethos.

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Mistral’s engineering resources were focused on building LLMs that power their products, which is what they do best. So instead of building a billing system from scratch (which can be a nightmare), Mistral reached out to us to power the billing for their paid products.

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But billing is complex, especially if you’re building for a new product. Here are a few needs Mistral asked us to solve:

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• Implementing token-based pricing

• Being able to meter usage in real-time, in a granular way, and at scale
• Defining a prepaid wallet system and optimize for cash collection
• Being agnostic to their payment processors: the team wanted to have the ability to potentially use several payment processors
• Managing taxes and specifically VAT
• Data and security requirements (GDPR, SOC 2, among others)

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Here is an overview of their pricing page as of December 9, 2024 (Source: Mistral):

Solutions and impact

After signing, Mistral launched with Lago in 52 days. Here’s how we were able to go live with them quickly:

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Lago’s out-of-the box approach: faster “time to launch”

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Here are the main steps used to implement their pricing structure:

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1. Aggregating usage using filters
   
   

Lago monitors usage by converting events into billable metrics. Using our “filter” feature, the Mistral team can aggregate usage by choosing dimensions such as “input or output”, or “model type”. This enables them to set prices per model, monitor consumption and create ‘usage buckets’ based on their product dimensions.

This enables them to charge for new products differently and to get detailed insights on where their revenue comes from.

2. Set up per-token pricing
   
   

AI APIs charge for tokens (fractions of a word), which Mistral is able to charge for. It’s important for us that every customer can bill their customers for the usage they want to bill in instead of being stuck with conventional usage metrics.

3. Prepayment of usage
   
   

One of the risks of usage-based pricing is that users consume the product without paying. To mitigate this without tarnishing UX, Mistral used our native feature of using a prepaid wallet.

They opted for a prepaid wallet credit system that is regularly and automatically topped up. When the balance of the wallet runs low, the wallet is topped up automatically.

4. Automatic payment collection
   
   

Lago is an open system. We avoid lock-in so we natively integrate with Stripe Payments. Mistral has several Stripe Payments accounts and we helped them connect to them seamlessly.

5. Tax management
   
   

Lago offers built-in European tax management which productizes the decision tree below, read more here. This area is often overlooked by non-European SaaS. But as a team with deep roots in Europe, we know this is important.

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These 5 steps are all complex topics in their own right, but in collaboration with the Mistral team, we were able to go live in under two months. Mistral’s engineering team was able to ship them via the API in a few weeks. Mistral was able to have a robust billing system up and running within a month. After a little under a year, Mistral has already sent more than 32,000 invoices with Lago.

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Pricing flexibility for new products and new plans

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The implementation was led by Mistral’s engineering team, but the system can also be customized via Lago’s no-code User Interface.

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This is handy in organizations where a Business Operations team configures custom/negotiated contracts. For instance, invoices are issued automatically for standard contracts (the self-serve customers) and for larger/custom customers, the Mistral team uses Lago’s user interface. Lago is also connected to Mistral’s CRM Salesforce.

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This means Mistral’s engineering team can focus on what they do best: Build great LLMs that benefit developers everywhere.

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This flexibility means that Mistral will have a billing system that scales with it—whether that’s via enterprise contracts or new models they release with their paid API.

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How Lago grows with Mistral

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A partnership doesn’t stop when you go to prod. The best companies never stop growing and experimenting, so we believe their billing system shouldn’t either.

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Beyond the initial implementation, we continue to partner with Mistral to support their evolving needs: from managing taxes worldwide, supporting the Finance team and fine-tuning the wallet’s workflows and use cases.

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Over the past year, we've expanded our solution to include more features that Mistral needed—and that will also serve our other customers.

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• Build an integrated and end-to-end single source of truth for revenue: Lago interfaces with Tax, ERP, CRM, and payments functions to provide a unified view of revenue data and drive the monetization roadmap across Mistral’s services.
• Support the Finance Team with customized billing for enterprise users: Enabling Mistral’s transition to a dual growth strategy, Lago supports both product-led and sales-led approaches with manual quoting and billing for custom needs, alongside automated workflows through Salesforce to empower the Finance team.
• Drive international expansion through Tax Management: Our tax solution now supports operations in 200+ countries, as well as multi-entity billing, aligning with Mistral’s global footprint.
• Provide decision-making insights with Reporting & Analytics: We worked closely with Mistral’s teams on revenue analytics and dashboards, bringing visibility into revenue growth and enabling profitability monitoring by product and usage.