Zuora Receives $115 Million Investment as Subscription Economy Goes Mainstream

March 11, 2015

– Latest Round Comes as Company Sees Triple-Digit Growth –

– Blackrock, Passport Capital, Marc Benioff Among Lead Investors –

Foster City, Calif. – March 11, 2015 Today’s $115 million funding announcement from Zuora underscores the significant shift all companies are making toward subscription business models. The latest funding round brings the total amount of capital raised by Zuora to $250 million. New investors include public market investors Wellington Management Company LLP and Blackrock Inc, as well as Premji and Passport Capital. They join existing investors Benchmark Capital, Greylock, Redpoint, Index, Shasta, Vulcan, Next World Capital, Dave Duffield, co-founder and chairman of the board of Workday; and Marc Benioff, chairman and CEO of salesforce.com—all of whom participated in this latest funding round.

Zuora is one of the world’s fastest-growing software-as-a-service (SaaS) companies. Its relationship business management (RBM) platform allows companies to manage the entire lifecycle of the subscriber, including customer acquisition, recurring billing and payments, revenue recognition, and subscription metrics. With this new investment, Zuora will continue its global expansion into new geographies and vertical markets, expand its team with world-class sales, engineering and marketing personnel, and fuel continued research and development activities.

“The Subscription Economy is permeating every industry—entertainment, technology, healthcare, manufacturing with IoT, consumer products, everything,” said Tien Tzuo, Zuora co-founder and CEO. “Customers are now subscribers, and the new way to acquire, bill, and nurture customers is through monetizing subscriber relationships.”

Tzuo continued, “Our funding partners understand that this shift is creating a multibillion dollar opportunity for a new category of software that sits between traditional CRM and ERP. The lead investors, including Blackrock and Passport Capital, bring strategic experience to help Zuora meet the enormous opportunity in front of us.”

Mainstream Market Traction

Since its founding in 2007, Zuora has correctly predicted the shift toward subscription-based business models and a transformation in the way business is transacted: from buying products to subscribing to services. Companies like Salesforce.com, Amazon, Netflix, and Box were the vanguard of the subscription economy, but the story is now far broader and deeper, and relevant to nearly every industry.

Energy, retail, healthcare, education, consumer goods, financial services and telecom companies are seeking new approaches to commerce, billing and finance that will power these disruptive models and usher in the required business-process changes in line with a new era of customer engagement. Product professionals, sellers, marketers and finance professionals use Zuora to rethink how they engage, acquire, and nurture subscribers anywhere on the globe.

Customer Validation

“Technology and digitization are helping Schneider Electric build deeper, more valuable customer relationships,” said Hervé Coureil, CIO of Schneider Electric. “Zuora is helping us design and implement new go-to-market models that will fuel growth and long-term market advantage.”

“Zuora has been our partner since day one, helping us scale—from an early-stage startup to IPO—and disrupt the content management and collaboration market,” Aaron Levie, CEO of Box.

“At HubSpot, we believe there is a fundamental mismatch between how organizations market and sell, and the way people actually shop and buy,” said Jim O’Neill, CIO of HubSpot. “Subscription-based models help businesses grow, but also hold companies accountable for long-term value to their customers, which is something we care deeply about. Zuora helps make this possible.”

“At Fairfax Media, we are shifting from a media company to a subscription company, this will allow us to focus on building meaningful relationships with our subscriber base,” said Marc Thompson, GM of product solutions of Fairfax Media. “In subscriptions it’s all about speed, agility and acquiring customers, Zuora and Salesforce helped us achieve our 12-month growth goals in just three months.”

Significant Growth in 2014

Calendar 2014 marked a year of significant growth and expansion for Zuora. The company experienced a 109 percent increase year-over-year in invoice volume running through its systems; growth in contracted invoice volume to approximately $42 billion USD; strong international expansion with 106 percent year-over-year revenue growth internationally; opening of eight new offices worldwide; and an expansion of its total global workforce to 500 employees.

“Companies are embracing the shift to subscription because they understand they must innovate or risk obsolescence,” said R. ‘Ray’ Wang, principal analyst and CEO, Constellation Research. “While SaaS companies showed the way, this is just the beginning as every company now faces business model disruption. In a post-sales economy, the focus is not on selling products or services but on managing relationships and keeping the brand promise.”

“Across many industries, the business of enabling experiences and nurturing relationships is augmenting or replacing product catalogs, shopping carts, and ownership,” said Amy Konary, research vice president at IDC. “Success in this new world requires monetizing relationships instead of simply selling units. Zuora is playing a key role in enabling the shift to relationship business models.”

Additional Resources

“The Subscription Economy: A Business Transformation” by Tien Tzuo, CEO of Zuora

SlideShare: “Drivers of Success in the Subscription Economy

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About Zuora Inc.

Zuora’s solution allows any business in any industry to launch or shift products to subscription, implement new pay-as-you-go pricing and packaging models, gain new insights into subscriber behavior, open new revenue streams, and disrupt market segments to gain competitive advantage. Headquartered in Silicon Valley, Zuora also operates offices in Atlanta, London, Paris, Munich, Beijing, Amsterdam, Vienna, Sydney, Copenhagen and Stockholm. Zuora clients come from a wide range of industries, including media, travel services, consumer packaged goods, cloud services, and telecommunications. Clients include Financial Times, Schneider Electric, Box, Honeywell, NCR, RTL, lynda.com, The Guardian, YP.com, BlueJeans, Shutterfly, TripAdvisor, Vivint and Trulia. To learn more about Zuora, please visit zuorainternprd.wpengine.com.