Next World Capital, Northgate Capital and Vulcan Capital Join Existing Investors in Series E Round
Foster City, CA – September 5, 2013 – Zuora, the subscription commerce, billing and finance leader, today announced that it has raised $50 million in additional capital to expand operations and help transform the quickly growing number of companies that are embracing the Subscription Economy.
- This Series E round includes new investors Next World Capital, Vulcan Capital, and Northgate Capital;
- Each existing major investor participated in this round, including: Benchmark Capital, Greylock Partners, Index Ventures, Redpoint Ventures, Shasta Ventures, Tenaya Capital, Workday founder and co-CEO Dave Duffield and Marc Benioff, chairman and CEO, salesforce.com;
- Abhishek Agrawal of Vulcan Capital and Craig Hanson of Next World Capital to join the board of directors;
- This brings the total amount of capital raised to-date to $132.5 million.
LIMITLESS OPPORTUNITIES IN A WORLD SUBSCRIBED
Since its founding in 2007, Zuora has emerged as one of the world’s fastest growing software-as-a-service (SaaS) companies – part of an ecosystem that has challenged Oracle, SAP and other legacy technology vendors. The recent shift in the industry to the cloud has created new opportunities for a range of innovative companies that have reinvented antiquated business functions and brought them into the 21st century. By one estimate from Canaccord Genuity, $100 billion of new value will be created over the next five years by disruptive companies that have yet to go IPO.
This move to the cloud has created new business models. Five years ago, Zuora predicted that a fundamental shift will take place – away from a product-based “buy once” economy to one based on recurring subscriptions – and created an entirely new approach to the core systems that optimize this business model. Subscriptions are becoming increasingly popular with end-users and the Subscription Economy has reached an inflection point, where billion-dollar industries as diverse as retail, technology, media, telecommunications, healthcare, education and financial services have each been disrupted by new subscription-based business models.
This investment demonstrates continued belief in the momentum of the Subscription Economy and the massive opportunity that lies ahead.
INNOVATION AND EXPANSION FOR THE SUBSCRIPTION ECONOMY
By inventing a simple and easy-to-use solution for subscription commerce, billing and finance, Zuora has given companies a way to implement new pay-as-you-go pricing models, open new revenue streams and gain competitive advantage. Zuora customers are looking beyond inefficient, manufacturing-centric ERP systems to more modern applications that deliver a broad set of commerce, billing and finance capabilities and are purpose-built for contemporary subscription business models.
For Zuora, the investment represents an opportunity to add to the company’s momentum and expand into new vertical markets and geographies. It will also contribute to additional investment in core research and development that will broaden and deepen its product line at an unparalleled pace.
In less than six years, Zuora has become one of the fastest growing enterprise software companies and the business continues to grow at a record-setting pace. This year alone, Zuora increased subscription revenue by approximately 90 percent year over year and grew its customer base by 55 percent in the last 18 months. In the past two years, Zuora has seen a seven times increase in invoice volume, and has signed over 20 contracts for $1 million plus to-date – including one of the world’s largest media companies and industry leaders in education, travel services, consumer packaged goods, cloud services, and telecommunications.
Zuora has signed up a host of customers across a wide range of industries in the past two years that have embraced subscription business models. Top names include: Appneta, Borderfree, BoxHop, Carfax, Dell, Docusign, Dyn, Gigya, Google Wildfire, HasOffers, Illumina, Informatica, Joyent, MLSListings, Okta, Rightscale, SendGrid, Symbility Solutions, SMTP.com, Timetrade, UniversityNow, Versature, and Zendesk.
Two new investment firms join the board, adding a broad set of industry experience:
- Next World Capital, an international, expansion-stage venture capital firm headquartered in San Francisco and with a strong presence in Europe. NWC brings strong expertise in the SaaS industry, and its investment portfolio includes other players in this fast-growing technology sector, such as GoodData and Host Analytics. In addition to the investment and board seat, Zuora can now tap NWC’s unique European Advisor Network, and NWC will provide strategic market guidance, from account targeting to go-to-market strategy, as the company expands into additional verticals and new European markets.
- Vulcan Capital is the private investment group that oversees Paul G. Allen’s multi-billion dollar portfolio. This investment was made from Vulcan’s new Silicon Valley based growth equity fund which is focused on investing behind the world’s brightest ideas and companies in the internet and technology space that are making a transformational change in the way that Zuora is pioneering the shift to subscriptions.
ZUORA HOSTS WORLD’S LARGEST CONFERENCE FOR THE SUBSCRIPTION ECONOMY
In response to the massive shift of companies to the Subscription Economy, Zuora will be hosting Subscribed 2013, the 2nd annual industry conference. Subscribed 2013 is the only global conference series designed specifically for the Subscription Economy and will feature keynotes and breakouts on best practices, business process and revenue growth strategies, and tips on how to use subscription metrics to drive better business decisions. Events will be held in San Francisco (September 19-20), London (October 1) and Sydney (October 24). To register for Subscribed, visit: https://www.subscribed.com
- “The world is subscribing like never before, forcing companies to react to changing business models or risk becoming obsolete. The systems and processes that supported traditional business models just can’t keep up with the demands of the Subscription Economy. That’s why more and more companies turn to Zuora to run their subscription businesses,” said Zuora co-founder and CEO Tien Tzuo.
- “Zuora has emerged as the clear leader in powering subscription-based business models worldwide; over the past 6 years the Company’s disruptive platform has become the industry standard for subscription billing, commerce and finance for both new high-growth companies as well as established companies that are launching new business lines based on the subscription model. Zuora has a tremendous opportunity to grow with its stellar set of clients who are themselves creating systemic change in various industries,” said Abhishek Agrawal, Managing Director of Vulcan Capital.
- “Next World Capital focuses on strategically identifying those leadership companies that are pioneering or transforming markets, and Zuora is clearly at the forefront of powering the massive, long-term shift toward subscription models as the best way to sell many products and services, ” said Craig Hanson, partner, NWC. “We’re looking forward to leveraging our deep experience in SaaS software and NWC’s unmatched international platform to help Zuora expand into new markets globally.”
- “Watching what Zuora and team have done over the past six years has been exciting and the opportunities that lie ahead massive. We believe in their mission and vision and look forward to supporting the company along its journey,” said Peter Fenton, General Partner, Benchmark Capital.
- “We were early believers in Zuora and continue to be impressed with the continued execution of innovation demonstrated by the team,” said Tim Haley, Partner, Redpoint Ventures. “It’s exciting to see people subscribe to Netflix rather than rent movies and take Zip Cars instead of taxi cabs. The world has changed, and it’s obvious that we’ve reached the tipping point of what Zuora has been talking about for more than half a decade.”
- “There is an undeniable shift in consumer buying behavior, where people want the option to subscribe to products and services, as opposed to physically owning things. This represents a massive opportunity for businesses to have the ability to build ongoing relationships with customers and easily offer additional services that will generate additional revenue streams. Zuora is the leader in subscription models and we are pleased to work with them to help transform the marketplace,” said Jason Pressman, Managing Director, Shasta Ventures.
- “We believe that subscription businesses are the wave of the future. We are delighted to further our investment in Zuora which has been enabling this new business model across industries and geographies,” said Mike Volpi, Partner at Index Ventures.
- “The shift toward subscription business models has driven many companies to adopt new pricing models and technology strategies in order to meet changing customer demands,” said Amy Konary, Research Vice President at IDC. “Zuora is helping to enable many industry-leading companies to support these models. The additional funding should enable Zuora to further capitalize on this massive shift and extend its leadership in bringing more innovation to the market that will accelerate its adoption.”
About Zuora, Inc.
Zuora is the global leader in subscription commerce and billing, helping companies in every industry transition to the Subscription Economy. Enterprise leaders and high-growth companies alike use Zuora’s multi-tenant cloud platform to launch, scale, and monetize their subscription services. Zuora’s applications work where traditional ERP applications fail: Subscription pricing, quoting, orders, billing, payments, and renewals. Built from the ground up by SaaS industry veterans from salesforce.com, PayPal, and Netsuite, Zuora services innovative customers like Informatica, Tata Communications, Box, Xplornet, Ustream and Reed Business Information. To learn more about Zuora, please visit www.zuora.com.
About Next World Capital
Next World Capital (NWC) is an international, expansion-stage venture capital firm that invests in leading software, mobile and Internet companies. With $200 million of assets under management, NWC is affiliated with the large global investment firm Next World Group, which provides an extraordinary international platform for its portfolio companies. The firm offers strategic insight and in-depth sector acumen to help its portfolio companies grow into market leaders. Furthermore, NWC uniquely operates a European Expansion Program with top executives across the continent to accelerate the growth of its portfolio companies through a large network of partners, channels and direct customers. NWC is headquartered in San Francisco with offices in Paris and Brussels. https://nextworldcap.com/
About Vulcan Capital
Vulcan Capital is the multi-billion dollar investment arm of Vulcan Inc., the company founded by Paul G. Allen to manage his philanthropic and business endeavors. The firm invests across all stages of corporate development including venture capital, growth equity and leveraged buyouts as well as investing in public equities and other liquid asset classes. Vulcan Capital’s current portfolio spans a range of industry sectors, including technology, internet, mobile, life sciences, energy and natural resources, media and communications, and financial and information services. This investment was made from Vulcan’s new Silicon Valley based growth equity fund which is focused on making investments ranging from $10-$100 million into leading internet and technology companies, including mid- to late-stage venture capital, recaps, growth buyouts and strategic public market block investments. For more information, visit capital.vulcan.com
About Northgate Capital
Northgate Capital, LLC is a premier provider of alternative asset investments through fund-of-funds vehicles and direct investment vehicles. With more than $3 billion in committed capital, Northgate’s foremost objective is to be an integral partner to institutions and families by helping them earn consistently top-quartile returns from their alternative asset investments. Northgate’s portfolio funds are often oversubscribed, making participation extremely limited. For more information, visit www.northgate.com.