Subscription Platform Zuora Goes Private in $1.7 Billion Silver Lake Deal

Subscription management platform Zuora is set to be acquired by tech investor Silver Lake.

The $1.7 billion deal is happening in partnership with an affiliate of GIC and will make Zuora a privately held company upon completion, according to a Thursday (Oct. 17) press release.

“This investment underscores our confidence in Zuora as the clear leader of monetization solutions for modern recurring revenue businesses,” Joe Osnoss, managing partner at Silver Lake, and Mike Widmann, managing director at Silver Lake, said in a news release. “Building upon our long-term partnership with GIC, we look forward to collectively supporting management as they continue to deliver solutions that enable their more than 1,000 customers to unlock and grow customer-centric business models.”

Zuora founder and CEO Tien Tzuo told PYMNTS last month that the key to succeeding in the subscription economy is creating an “essential” relationship with customers.

“Don’t focus on the sale, focus on the ongoing relationship,” he said. “Earn the right to establish an ongoing relationship slowly over time.”

This shift in mindset means companies need to think beyond traditional transactional models. Tzuo used the example of a coffee subscription service that’s considering ways to better understand customer habits.

“They’re asking questions like, ‘Do we sell you a coffee maker? Do we sell you a grinder?’” he said. “Are there other things that we can do to help understand what your coffee habits are and deliver you actually what you need where you don’t have to think about it anymore?”

In June, Zuora acquired Sub(x), an artificial intelligence solution for media/publishing firms. The deal lets Zuora turn its paywall offering into an AI-powered paywall solution to garner better insights into subscriber behavior.

“Today’s competitive media landscape and changing market dynamics have increased pressure to effectively monetize and accelerate revenue growth,” the company said at the time. “This requires more dynamic systems and technology that can continuously adapt pricing and packaging strategies at scale. A legacy method, such as propensity scoring, is static and does not update unless rerun with new data, which can hinder agility.”