According to Gartner, more than 80% of software providers will have migrated to a subscription-based business model by the year 2020. Another research estimates the global subscription economy for the SaaS industry to be a $100 billion market opportunity by 2020. But not all companies were set up with the complications of a subscription-based billing model in mind. Mountain View, California–based Zuora, a Billion Dollar Unicorn is helping companies migrate to this model.

Zuora’s Financials

Zuora was founded in 2007 by Webex and Salesforce.com veterans, K.V. Rao, Cheng Zou, and Tien Tzuo. The trio wanted to build an offering that could help businesses address the complications surrounding billing, upgrades, and pricing bundles for a subscription-based service. They built a platform that could offer an end-to-end subscription management service to cater to the business’ needs of automating recurring billing, collections, pricing, and quotes. It tracks subscription payments, invoices, pricing, product catalogs and taxation, and provides access to reporting and analytics, that can vary from customer demographics, to behavior, and to financial performance.

Zuora earns revenues in the form of a commission which is a percentage of the subscription revenues billed through its platform. It does not disclose its financials, but analysts estimate that it was managing nearly $42 billion in invoices in 2015. In a recent report, Zuora did mention that it had surpassed the milestone of a $100 million run rate for 2017. The company is expected to be cash-flow positive and it continues to invest in revenue growth.

Zuora has been venture funded so far with $242.5 million in venture funding from investors including BlackRock, Wellington Management, NextWorld Capital, Northgate Capital, Vulcan Capital, Benchmark Capital, Marc Benioff, Shasta Ventures, Lehman Brothers, Redpoint Ventures, Tenaya Capital, Index Ventures, Greylock Partners, and Dave Duffield. Last year, it had raised an undisclosed amount at an undisclosed valuation. Prior to that, Zuora had raised $115 million in 2015 at a valuation of $740 million. Analysts estimate that it is presently valued at more than $1 billion.

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