Apr
13
2018
--

Zuora’s IPO is another step in golden age of enterprise SaaS

Zuroa’s founder and CEO Tien Tzuo had a vision of a subscription economy long before most people ever considered the notion. He knew that for companies to succeed with subscriptions, they needed a bookkeeping system that understood how they collected and reported money. The company went public yesterday, another clear sign post on the road to SaaS maturation.

Tzuo was an early employee at Salesforce and their first CMO. He worked there in the early days in the late 90s when Salesforce’s Marc Benioff famously rented an apartment to launch the company. Tzuo was at Salesforce 9 years, and it helped him understand the nature of subscription-based businesses like Salesforce.

“We created a great environment for building, marketing and delivering software. We rewrote the rules, the way it was built, marketed and sold,” Tzuo told me in an interview in 2016.

He saw a fundamental problem with traditional accounting methods, which were designed for selling a widget and declaring the revenue. A subscription was an entirely different model and it required a new way to track revenue and communicate with customers. Tzuo took the long view when he started his company in early 2007, leaving a secure job at a growing company like Salesforce.

He did it because he had the vision, long before anyone else, that SaaS companies would require a subscription bookkeeping system, but before long, so would other unrelated businesses.

Building a subscription system

As he put it in that 2016 interview, if you commit to pay me $1 for 10 years, you know that $1 was coming in come hell or high water, that’s $10 I know I’m getting, but I can’t declare the money until I get it. That recurring revenue still has value though because my investors know that I’m secure for 10 years, even though it’s not on the books yet. That’s where Zuora came in. It could account for that recurring revenue when nobody else could. What’s more, it could track the billing over time, and send out reminders, help the companies stay engaged with their customers.

Photo: Lukas Kurka/Getty Images

As Ray Wang, founder and principal analyst at Constellation Research put it, they pioneered the whole idea of a subscription economy, and not just for SaaS companies. Over the last several years, we’ve heard companies talking about selling services and SLAs (service/uptime agreements) instead of a one-time sale of an item, but not that long ago it wasn’t something a lot of companies were thinking about.

“They pioneered how companies can think about monetization,” Wang said. “So large companies like a GE could go from selling a wind turbine one time to selling a subscription to deliver a certain number of Kw/hr of green energy at peak hours from 1 to 5 pm with 98 percent uptime.” There wasn’t any way to do this before Zuora came along.

Jason Lemkin, founder at SaaStr, a firm that invests in SaaS startups, says Tzuo was a genuine visionary and helped create the underlying system for SaaS subscriptions to work. “The most interesting part of Zuora is that it is a “second” order SaaS play. It could only thrive once SaaS became mainstream, and could only scale on top of other recurring revenue businesses. Zuora started off as a niche player helping SaaS companies do billing, and it dramatically expanded and thrived as SaaS became … Software.”

Market catches up with idea

When he launched the company in 2007, perhaps he saw that extension of his idea out on the distant horizon. He certainly saw companies like Salesforce needing a service like the one he had decided to create. The early investors must have recognized that his vision was early and it would take a slow, steady climb on the way to exiting. It took 11 years and $242 million in venture capital before they saw the payoff. The revenue after 11 years was a reported $167 million. There is plenty of room to grow.

But yesterday the company had its initial public offering, and it was by any measure a huge success. According TechCrunch’s Katie Roof, “After pricing its IPO at $14 and raising $154 million, the company closed at $20, valuing the company around $2 billion.” Today it was up a bit more as of this writing.

When you consider the Tzuo’s former company has become a $10 billion company, that companies like Box, Zendesk, Workday and Dropbox have all gone public, and others like DocuSign and Smartsheets are not far behind, it’s pretty clear that we are in a golden age of SaaS — and chances are it’s only going to get better.

Apr
09
2018
--

Juro grabs $2M to take the hassle out of contracts

UK startup Juro, which is applying a “design centric approach” and machine learning tech to help businesses speed up the authoring and management of sales contracts, has closed $2m in seed funding led by Point Nine Capital.

Prior investor Seedcamp also contributed to the round. Juro is announcing Taavet Hinrikus (TransferWise’s co-founder) as an investor now too, as well as Michael Pennington (Gumtree co-founder) and the family office of Paul Forster (co-founder of Indeed.com).

Back in January 2017 the London-based startup closed a $750,000 (£615k) seed round, though CEO and co-founder Richard Mabey tells us that was really better classed as an angel round — with Point Nine Capital only joining “late” in the day.

“We actually could have strung it out to Series A,” he says of the funding that’s being announced now. “But we had multiple offers come in and there is so much of an explosion in demand for the [machine learning] that it made sense to do a round now rather than wait for the A. The whole legal industry is undergoing radical change and we want to be leading it.”

Juro’s SaaS product is an integrated contracts workflow that combines contract creation, e-signing and commenting capabilities with AI-powered contract analytics.

Its general focus is on customers that have to manage a high volume of contacts — such as marketplaces.

The 2016-founded startup is not breaking out any customer numbers yet but says its client list includes the likes of Estee Lauder, Deliveroo and Nested. And Mabey adds that “most” of its demand is coming from enterprise at this point, noting it has “several tech unicorns and Fortune 500 companies in trial”.

While design is clearly a major focus — with the startup deploying clean-looking templates and visual cues to offer a user-friendly ‘upgrade’ on traditional legal processes — the machine learning component is its scalable, value-added differentiator to serve the target b2b users by helping them identify recurring sticking points in contract negotiations and keep on top of contract renewals.

Mabey tells TechCrunch the new funding will be used to double down on development of the machine learning component of the product.

“We’re not the first to market in contract management by about 25 years,” he says with a smilie. “So we have always needed to prove out our vision of why the incumbents are failing. One part of this is clunky UX and we’ve succeeded so far in replacing legacy providers through better design (e.g. we replace DocuSign at 80% of our customers).

“But the thing we and our investors are really excited about is not just helping businesses with contract workflow but helping them understand their contract data, auto-tag contracts, see pattens in negotiations and red flag unusual contract terms.”

While this machine learning element is where he sees Juro cutting out a competitive edge in an existing and established market, Mabey concedes it takes “quite a lot of capital to do well”. Hence taking more funding now.

“We need a level of predictive accuracy in our models that risk averse lawyers can get comfortable with and that’s a big ask!” he says.

Specifically, Juro will be using the funding to hire data scientists and machine learning engineers — building out the team at both its London and Riga offices. “We’re doing it like crazy,” adds Mabey. “For example, we just hired from the UK government Digital Service the data scientist who delivered the first ML model used by the UK government (on the gov.uk website).

“There is a huge opportunity here but great execution is key and we’re building a world class team to do it. It’s a big bet to grow revenue as quickly as we are and do this kind of R&D but that’s just what the market is demanding.”

Juro’s HQ remains in London for now, though Mabey notes its entire engineering team is based in the EU — between Riga, Amsterdam and Barcelona — “in part to avoid ‘Brexit risk’”.

“Only 27% of the team is British and we have customers operating in 12 countries — something I’m quite proud of — but it does leave us rather exposed. We’re very open minded about where we will be based in the future and are waiting to hear from the government on the final terms of Brexit,” he says when asked whether the startup has any plans to Brexit to Berlin.

“We always look beyond the UK for talent: if the government cannot provide certainty to our Romanian product designer (ex Kalo, Entrepreneur First) that she can stay in the UK post Brexit without risking a visa application, tbh it makes me less bullish on London!”

Jan
30
2018
--

SAP snags CallidusCloud for $2.4 billion

 SAP, the German enterprise software giant, announced it acquired CallidusCloud last night for $2.4 billion or $36 per share. Callidus provides configure price quote (CPQ) and sales performance management tools delivered as a cloud service. The share price is a nice bump for shareholders, representing a 21 percent premium over the 30-day volume weighted average share price, according to SAP.… Read More

Jan
25
2018
--

Snowflake lands massive $263 million investment on unicorn valuation

 Snowflake, the cloud-based data warehouse service, announced an enormous investment round today, pulling in a whopping $263 million on a unicorn valuation of $1.5 billion. The round was led by a trio of big-name Silicon Valley VC firms including existing investors Iconiq Capital and Altimeter Capital and new investor Sequoia Capital. Today’s announcement comes on top of the $100… Read More

Oct
04
2017
--

Cloud computing has demanded a kinder, gentler Oracle

 Oracle has always had a swagger that reflects the public persona of its bombastic leader, Larry Ellison, but over the last several years, as the company has transitioned to the cloud, it has required a transformation to one that is softer and more customer-centric. Mind you, this was a company that was the poster child for vendor lock-in the 90s and early 2000s. They knew you were looking for… Read More

Sep
19
2017
--

Salesforce Einstein celebrates its first birthday with several new features

 Salesforce launched Einstein, its artificial intelligence platform just one year ago this week. As it celebrates its first birthday, it’s worth taking a look back at the first year and looking at a couple of enhancements they’re adding as a birthday surprise. It’s easy to lose sight of the fact that Einstein isn’t actually a product at all, even though Salesforce markets… Read More

Jul
20
2017
--

Freshdesk owner Freshworks acquires Joe Hukum as it plans a move into chatbots

 After raising $55 million last year to build its business beyond its existing help desk services, today Freshworks (the parent company of Freshdesk) has made an acquisition to help it fill out that strategy. The company has acquired Joe Hukum, a startup out of India that offers a platform for businesses to build their own chatbots. I’ve asked, but the companies are not revealing any terms… Read More

Jun
28
2017
--

As Egnyte turns 10, it moves into data protection

 Egnyte had a big milestone last week. It turned 10 years old, which is a pretty big deal for a startup. The company has survived and even thrived, but as it moves into its second decade, it recognizes that it can’t live on file sync and share alone, and today it announced the general availability of a new product called Egnyte Protect. The product was introduced in Beta last year, but… Read More

Jun
08
2017
--

Algolia raises $53 million for its search engine API

 French startup Algolia just raised a $53 million Series B round led by Accel, a couple of years after raising $18.3 million with… Accel also leading the round. So it looks like it’s a love story between the VC firm and the software-as-a-service startup. Read More

Apr
20
2017
--

Swingvy raises $1.1M to give HR staff in Southeast Asia a break from paperwork

 Human resources paperwork is never fun to take care of—especially if it’s literally on paper. Swingvy co-founder Jin Choeh says that in Southeast Asia, many small businesses are still stuck with physical spreadsheets and piles of forms. Swingvy wants to help them with affordable cloud-based software. The South Korea and Malaysia-based startup just raised $1.1 million in seed funding… Read More

Powered by WordPress | Theme: Aeros 2.0 by TheBuckmaker.com