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.
The media and publishing industry is thriving as companies continuously roll out and monetize new digital service offerings in response to evolving subscriber demands, the company added. Zuora's customers include Bloomberg, DAZN, Guardian News & Media, and Penske Media Corporation (PMC). With the addition of Zephr, the combined solution will create an expanded opportunity.
According to the company, Zephr’s platform powers nearly eight billion requests a month, with capabilities including identity management, intelligent trials, dynamic paywalls, entitlements management, and a decision engine that helps deliver experiences that are personalized for every subscriber. When combined with data from Zuora’s Billing, Collect, and Revenue systems the resulting solution will empower companies across industries to nurture and monetize their subscriber relationships by better understanding their behaviours, experimenting with the right digital offerings, and optimizing their digital experiences, says Zuora.
For companies in the subscription economy, the company continued, the ability to quickly launch and experiment with new digital services is critical. According to research by Zuora’s Subscribed Institute, the fastest-growing media companies iterate their pricing and packaging twice as often as their industry peers. But most companies are bogged down by static, outdated systems that slow down their ability to respond to changing subscriber expectations.
“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,” said Tien Tzuo, CEO and Founder at Zuora. “This is what combining Zuora and Zephr is about. We’re thrilled to welcome our fellow ZEOs into the family.”
“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,” said James Henderson, CEO at Zephr. “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.”
Zephr was founded in 2018 by James Henderson and Chris Scott, and launched as a subscription experience platform focused on accelerating revenue growth, with customers including News Corp, McClatchy, and Bauer. Upon closing, Zephr will become a part of Zuora's existing product suite, alongside Zuora Billing, Zuora Revenue, and Zuora Collect.
The acquisition details have been outlined by the company as follows:
Under the terms of the acquisition agreement, Zuora will acquire Zephr for $44 million in cash payable at close, plus an earnout consideration of up to $6 million, subject to certain financial objectives. At closing, Zuora expects the acquisition to contribute approximately $5 million to Zuora’s annual recurring revenue (ARR). The acquisition is subject to customary approvals and closing conditions, and is expected to close in early September. Foros is acting as financial advisor and Fenwick & West as legal advisor to Zuora. Stifel is acting as financial advisor and Cooley as legal advisor to Zephr.
For its fiscal year 2023 ending January 31, 2023, Zuora anticipates the acquisition will add approximately $2 million of subscription revenue and expects to absorb incremental operating expenses with no impact to the non-GAAP operating loss.
You can find out more about Zephr in our Publishing Services Directory.Keep up-to-date with publishing news: sign up here for InPubWeekly, our free weekly e-newsletter.
