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September 5, 2013 04:05 pm GMT

Zuora Lands $50M From Next World, Paul Allen, Marc Benioff & More To Help Fuel The Rise Of The Subscription Economy

icon-zuora2-Over the last few years, Startup Land has played home to the dramatic re-emergence of a tried-and-true, familiar model: Subscription commerce. The rise of smartphones, tablets, “The Cloud,” Big Data and the steady maturation of digital marketplaces and distribution channels has fundamentally changed the way we shop, socialize and do business. As a result, businesses are increasingly shifting their focus from the old model of selling “product units” to the comfort and stability of subscription-based, recurring revenu streams. Companies like Netflix, Spotify and Birchbox collectively tipped the first domino, and today have assumed the role as the poster children for a new generation of subscription-based businesses that are flooding the market. Tien Tzuo, the founder and CEO of Zuora — a platform that aims to help tech companies shift to a subscription-based model and automate and manage payments — has spent years extolling the virtues of this new “Subscription Economy,” using businesses like Netflix to illustrate this transformation. Fast forward to today, and Tzuo’s evangelism — while undeniably self-interested — has also begun to look prescient. For good reason: As the number of converts to subscription-based models continues to grow, Zuora finds itself at the center of a fast-growing new economy. And investors have taken notice. Today, the five-year-old company announced that it has raised a new, $50 million round of Series E financing that it will use to help those embracing the Subscription Economy convert their business (and customers) to new models and manage the challenges that come with adapting to these new monetization structures. Tzuo is quick to remind us of how difficult that transition can be for companies that have long been weaned on the old way of doing things. Traditionally, businesses have turned to SAP and Oracle for enterprise-grade ERP services that help them manage core business metrics and operations, from warehousing to managing inventory and fleet. But for companies like Dropbox, Salesforce and Netflix that are building businesses amidst the emergence of the subscription economy, these platforms no longer fit their needs. These new models require new ways of looking at customer relationship practices, pricing, invoicing and order management, and it’s not simply about moving HR to the cloud, he says. It has to go deeper than that and reflect the fundamental shift in how the average consumer shops, works and interacts with digital marketplaces. Strategically, since launching in 2007, Zuora has basically been on

Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/STxQaG_oAe0/

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