Zuora, a SaaS startup that offers online services to manage and automate customer subscriptions and payments, has raised $36 million in new funding from Index Ventures, Greylock Partners, Workday CEO and founder Dave Duffield, Benchmark Capital, Redpoint Ventures, Shasta Ventures, Tenaya Capital and Salesforce CEO Marc Benioff. This brings the company’s total funding to over $80 million. We hear that Zuora’s valuation is above $300 million but below $500 million.
Launched in 2008, Zuora’s cloud-based billings platform aims to alleviate the need for online businesses to develop their own billing systems, especially to handle recurring payments like those associated with subscriptions.
The startup offers a number of tailored products for companies including a billing service for cloud providers, which automates metering, pricing and billing for products, bundles, and configurations. Zuora has alsoextended its platform to Facebook apps, app developers charge recurring monthly subscriptions for their apps or premium features.
And over the past four years, the company has seen more than 100% annual growth in bookings, 10 deals over $1 million in the last 18 months with largest at $4.3 million, and doubling the company size in 2011 to nearly 200 employees.
Customers include Dell, Concur, IBM Coremetrics, Informatica, News International, Reed Business Information, Qualcomm, Ricoh, Tata Communications, Touring Club Suisse, TripAdvisor, VNU Media, Vocus, Box, Branchout, Cloud9, DocuSign, Marketo, Ning, Ooyala, salesforce.com’s Radian6, Ustream, Xactly, Yammer and ZenDesk.
Zuora has also announced it is expanding its European presence across the Netherlands, Germany, France and Ireland with new offices, staff and strategic partnerships. Zuora has already signed over $2.7 billion in contracted subscription revenue with customers across Europe. That’s compared to $1 billion total subscription revenue in Q1 of 2010. In fact, 20 percent of Zuora’s business is outside of North America.
Similar to the way that Benioff marketed Salesforce as the anti-software option for business, Zuora is portraying itself as the anti-legacy system for billings and payments.
Zuora co-founder and CEO Tien Tzuo tells me that clients are finding that existing ERP systems from SAP, Oracle and others are outdated in subscription business models. Businesses like Radian6 and Dell need a scalable, cloud-based model that can easily be deployed, he explains. ““The product-focused, industrial economy and the systems that support it are part of the past. It’s time for a new system of record for the Subscription Economy.”
Tzuo says that the company is on track to double or triple revenue this year (but declined to give us exact revenue numbers). And the company still has $20 million in the bank from its previous funding rounds.
So why did Zuora raise money? Tzuo says he is going to continue to be aggressive with the international expansion. Additionally, the new funding will be used to invest in core research and product development.