Investors recognize the transformative power of subscription billing to billion dollar industries; founding investor of Netflix joins Zuora board of directors
Redwood City, CA — November 9, 2010 — Zuora, the subscription billing leader, today announced that it has received $20 million in a Series C round of funding led by Redpoint Ventures. Zuora’s existing investors, Benchmark Capital, Marc Benioff, Shasta Ventures and Tenaya Capital, also participated. To date, the company has raised $41.5 million in funding.
Zuora has been cash flow positive since its 2010 fiscal Q1, and has grown in excess of 400% in 2009 and is on track to repeat that in 2010. As a result of its success, Zuora will use the funds to rapidly grow its operations in the U.S. and EMEA and to accelerate its entry into new geographies. Zuora will also use the funds to dramatically expand its portfolio of industry-specific solutions to meet the growing enterprise demand for subscription billing solutions.
Concurrent with the funding of Series C, Tim Haley, Founding Partner of Redpoint Ventures has joined the Zuora board of directors. Notably, Haley was the first investor at Netflix, one of the leading subscription-based business models. Haley joins Peter Fenton, partner at Benchmark Capital; Scott Thompson, president of PayPal; and Jason Pressman, partner at Shasta Ventures, as outside members of the board.
“Like so many companies, Netflix started on a shopping cart-based, product-focused business model, and it wasn’t until it discovered the power of subscriptions that Netflix really took off,” said Haley. “Many enterprises are having that same epiphany now which is why I think what Zuora is doing is so transformational. Zuora has the ability to power the Subscription Economy across a variety of industries, positioning itself as one of the most exciting enterprise software companies to watch.”
“Three years ago, we predicted that industry after industry would be shifting to subscriptions, and that has become a reality in industries as diverse as cloud computing and consumer services and with industry leaders like ZipCar, Pandora and of course Netflix,” said Zuora co-founder and CEO Tien Tzuo. “We’ve only witnessed the beginning, and it’s the time to step on the gas. Whole industries are starting to be transformed with subscription billing as the most important element of success. That’s why we partnered with investors who shared our vision, and would help us accelerate our aggressive efforts to grow and lead this market and enable the next phase of the Subscription Economy.”
The Subscription Economy is Disrupting Billion-Dollar Industries
Every day, more companies are joining the Subscription Economy as enterprises and consumers shift from buying outright to subscribing to broad libraries of products and solutions. New-comers like Netflix, ZipCar and Pandora have forced new and traditional enterprises to adjust to the unprecedented pace of transformation. Subscription billing is the catalyst behind this massive transformation occurring in several multi-billion dollar markets, positioning it as one of the most strategic enterprise application over the next decade.
Zuora’s customers are some of the leaders across these industries that are rethinking their core products and value propositions as services and investing rapidly in subscription revenue models, including:
- Cloud computing is disrupting the $3.4 trillion technology industry as enterprises move to elastic compute clouds that are enabled by subscription billing’s ability to meter, price, and bill cloud services. Zuora is the billing solution behind cloud leaders such as BlueLock, CloudCentral, EMC, Firehost, Stantive, Tata, and Zetta.
- App marketplaces, led by Microsoft, Google, saleforce.com, Apple, PayPal and others, are estimated at $1 billion today and projected to reach $4 billion by 2012, creating more opportunities for developers to offer software-as-a-service. Some of Zuora’s SaaS customers include Box.net, Coremetrics, LiveOffice, Marketo, and Xactly.
- The media industry recognizes it needs to monetize online content, and it requires billing to create promotions and bundles of digital and physical content that push out to multiple devices and platforms. Zuora is helping media companies like GigaOm, Primedia, Reed Business Information, and VNU Media transform their industry.
- Online consumer service providers are using subscriptions to innovate the pricing and packaging of freemium, try-before-you-buy, and cross-sell service models that best meet consumer demand. In the case of Ning, Zuora helped the company shift from a freemium to a premium model in under 45 days. Other Zuora consumer services customers include Citysquares, Quova, and ReputationDefender.
- Telecom and wireless technologies in WiMax, satellite, geo-location and 4G are creating a new wave of telecom services and service providers which are being enabled by subscription billing. Zuora customer Open Range, one of the nation’s hottest wireless broadband providers, deployed a fully scalable billing model in less than 100 days. Other Zuora telecom customers include BI, Bandwidth.com, and ShoreTel.
Zuora is Leading the Shift to the Subscription Economy
Zuora was founded in 2007 by executives from salesforce.com and WebEx to define and lead the subscription billing market. Since that time, Zuora has rapidly grown into the clear market leader across key metrics, including:
- the most consistent customer success with some of the most innovative companies in the Subscription Economy;
- the fastest product innovation with monthly — instead of quarterly or semi-annual — product releases;
- the largest company in the market with the strongest management team including executives from IBM, NetSuite, eBay, Obopay, and Savvion;
- the fastest SaaS company to get to cash flow positive, in just over two years;
- the widest industry recognition including IDC’s Innovative Companies under $100M to Watch list, AlwaysOn’s Global 250, DreamSimplicity’s Top 10 Fastest Growing SaaS Companies, Lead411’s Hottest Silicon Valley Companies Award – 2010, and Beagle Research’s Think Forward Award;
- the first to sign over $1 Billion in contracted subscription revenue in a quarter;
- the best customer buzz and evangelism; and
- the broadest product line for subscription billing including Z-Billing, Z-Payments, Z-Force, Z-Commerce, Z-Commerce for Media, Z-Commerce for the Cloud, and Z-Commerce for the Cloud VMware Edition.
About Zuora, Inc.
Zuora’s subscription billing and commerce platform changes the way subscription businesses manage and sell to customers, allowing them to bring new products to market in less time, with more flexibility and less hassle. Zuora customers are up and running within 90 days and often recognize 200% ROI within weeks. Zuora is built from the ground up by SaaS industry visionaries and veterans from salesforce.com, WebEx, Accenture, Google, eBay, Oracle and Vitria. Zuora customers include Reed Business Information, Coremetrics, InsideView, Marketo, Ricoh, Box.net, Xactly, Cloud Central and EMC.
To learn more about Zuora, please visit www.zuora.com.