IPO

Zuora Closes Debut With $2B Valuation

Zuora

Subscription biller Zuora has seen its value soar after its public debut — pricing its IPO at $14 and closing at $20.

The company also raised $154 million, bringing its new value to around $2 billion. Its investors include Benchmark Capital, Wellington Capital Management and Shasta Ventures.

In 2013, the company raised $50 million in Series E fundraising. First-time participants in that round included Next World Capital, Northgate and Vulcan Capital.

Founder and CEO Tien Tzuo told TechCrunch that “a bet on us is really a bet on an entire shift to a new business model, to a subscription economy.” He believes subscriptions are the “business model of the future.”

Founded in 2007, San Mateo, California-based Zuora is an end-to-end subscription business management platform that provides insights for businesses looking to grow a robust subscription service and build customer loyalty.

“Zuora’s core platform is a SaaS solution that includes billing, commerce, finance and revenue recognition, which solves the complexities of subscription billing that cannot be addressed by legacy financial systems,” David Gee, the former CMO of Zuora, said. “[The company] also adapts dynamically to changes that legacy systems, like ERP, were not designed to address, as these systems were built for a product-based world of ‘one-time’ sales transactions.”

The company boasts 15 of the Fortune 100 businesses as clients.

Zuora’s revenue for its fiscal 2018 year was $167.9 million, an increase from $113 million in 2017 and $92.2 million in 2016. Losses have remained constant, from $48.2 million in 2016 to $47.2 million in 2018.

“We have a history of net losses, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability,” said the requisite risk factors section of the IPO filing.

Zuora listed on the New York Stock Exchange under the ticker “ZUO.” Goldman Sachs and Morgan Stanley worked as lead underwriters on the deal, while Fenwick & West and Wilson Sonsini served as counsel.

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