Zuora, Inc., the leading cloud-based subscription management platform provider, today announced its planned acquisition of Zephr, a leading subscription experience platform used by global digital publishing and media companies. As an existing Zuora® partner, Zephr’s pre-integrated solution is in use today by joint customers, and will immediately expand Zuora’s product suite.

As businesses regularly roll out and monetize new digital service offerings in response to changing subscriber expectations, the media and publishing sector is booming. Customers of Zuora include Bloomberg, DAZN, Guardian News & Media, and Penske Media Corporation, solidifying its position as a market leader (PMC). Zephr’s inclusion will increase the combined solution’s potential in the media and beyond.

With capabilities like identity management, intelligent trials, dynamic paywalls, entitlements management, and a decision engine that helps deliver experiences that are individualized for every subscriber, Zephr’s platform supports close to eight billion queries each month. The solution will enable businesses across industries to nurture and monetize their subscriber relationships by better understanding their behavior, experimenting with the right digital offerings, and optimizing their digital experiences. Zuora’s Billing, Collect, and Revenue systems generate tens of billions of dollars in transaction volume each quarter.

It’s crucial for businesses operating in the Subscription Economy® to be able to quickly introduce and test out new digital offerings. The fastest-growing media firms modify their price and packaging twice as frequently as their contemporaries in the industry, according to research by Zuora’s Subscribed Institute. However, most businesses are hampered by static, antiquated systems that limit their capacity to adapt to shifting subscriber expectations. Companies will have the flexibility they need to address these constantly shifting expectations when Zephr is added to Zuora’s product lineup, ultimately resulting in subscriber conversion, retention, and growth.

“The winners in the media industry are those continuously innovating around new services, bundles, and offers. And where the media industry goes, other industries will follow,”

“This is what combining Zuora and Zephr is about. We’re thrilled to welcome our fellow ZEOs into the family.”

                                                                               Tien Tzuo, CEO and Founder at Zuora.

“Our focus has been on giving our customers the agility they need to deliver the experiences that modern customers expect – it starts from the first digital interaction to conversion, to renewal,”

“It was a clear decision to join Zuora to accelerate where our platform is headed, and empower all of our customers to nurture and monetize their subscriber relationships.”

                                                                                          James Henderson, CEO at Zephr.

Zephr, a subscription experience platform with an emphasis on increasing revenue development, was founded in 2018 by James Henderson and Chris Scott. Customers include News Corp, McClatchy, and Bauer. Zephr will eventually join Zuora’s current product lineup, which already includes Zuora Billing, Zuora Revenue, and Zuora Collect. To continue promoting innovation and the success of the combined customer base, Zephr personnel will join Zuora.

According to the acquisition deal, Zuora will buy Zephr for $44 million in cash due at closing plus an earnout payment of up to $6 million, contingent upon reaching specific financial goals. Last but not least, Zuora anticipates that the acquisition will increase its yearly recurring income by about $5 million (ARR). The transaction is scheduled to close in early September, subject to usual clearances and closing conditions. Zuora is receiving legal and financial advice from Fenwick & West and Foros respectively. Zephr is being advised financially by Stifel and legally by Cooley.

Zuora expects the acquisition to bring about $2 million in subscription revenue to its fiscal year 2023, which ends on January 31, 2023, and expects to absorb additional operational costs without having an effect on the non-GAAP operating loss. At 2:00 p.m. PT (5:00 p.m. ET) today, Zuora will have a conference call for investors to go through its financial second-quarter results and its outlook for the fiscal third quarter ending October 31, 2022, as well as the fiscal year concluding January 31, 2023. The Investor Relations section of Zuora’s website will host both the live webcast and a webcast replay.