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.
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.
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:
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
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 zuorainternprd.wpengine.com.
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/
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
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.
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