Tien Tzuo’s Zuora Set To Capitalize On Subscription Economy It Helped Build – Forbes Reports


Here’s a Forbes article on Zuora.

How does Dollar Shave Club go from start-up to $150 million in annual revenue and get scooped up for $1 billion by Unilever in only four years? Certainly part of the answer lies in the magic of recurring revenue from a subscription business model. Subscription-based purchasing models are transforming virtually every business category, from retail to industrial electronics and avionics.  And the primary software powering this model is itself a subscription-based, SaaS platform from “unicorn” start-up, Zuora.

The company provides an end-to-end subscription management platform helping businesses in automating recurring billing and collections, configuring, pricing as well as quoting for recurring revenue businesses. (Forbes previously wrote about it here.)

It’s co-founding CEO, Tien Tzuo, famously coined the phrase “the subscription economy” to both contextualize the service he offers and to evangelize for a new category of business software that enables it. Today the Foster City, California-based Zuora is a juggernaut.  The company has over 600 employees, an annual run rate north of $100 million and a gaudy $1 billion valuation based on $242 million in venture funding over 6 rounds from 17 Investors (most notably BlackRock, Wellington Management, Next World Capital, Northgate Capital, Vulcan Capital, Greylock Partners, Index Ventures, Redpoint, Shasta Ventures and Benchmark) plus additional undisclosed financing through the secondary market.

“What inspired us to start the company is that there’s a big shift in business models taking place, from a product centric view of business to a service people subscribe to.  Whether you look at transportation – why buy a car if you can go from point A to point B just by pulling up one of these services on your phone, or walking to the closest Zipcar? Why buy movies and songs when you can get the whole library? We’re seeing that model really permeate all aspects of our lives,” says Tzuo.

Tzuo and his co-founders K.V. Rao and Cheng Zou, both formerly of Webex, founded Zuora to provide the software backbone to make it easy for businesses to adopt a subscription model and not have to worry about developing their own back-end system to manage an otherwise complicated finance and customer relationship process.  In fact, Tzuo began working on the idea that would become Zuora to solve the problem when he was working at Salesforce (he was employee number 11).

Go read the entire article here.  It’s important!

And here’s an article on how Zuora lets customers mix and match revenue models.