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Subscription management platform Zuora to acquire Zephr for $44M

Kerry Flynn
Aug 25, 2022
Illustration of a labrador carrying a giant newspaper in its mouth.  
Illustration: Aïda Amer/Axios

Zuora CEO Tien Tzuo said Wednesday that its Zephr news is the "first step" in pursuing more acquisitions, thanks in part to the $400 million investment from Silver Lake in March.

Driving the news: Tzuo's statement on his company's earnings call followed the announcement that Zuora, a Redwood City, California-based subscription management platform, has agreed to acquire London-based Zephr.

Why it matters: These software tools have become increasingly valuable as more publishers invest in subscription products as a crucial revenue source and seek to grow subscriber engagement.

Details: The companies said the all-cash deal is for $44 million, plus $6 million in earnout consideration.

  • The newly combined company's headcount is 1,500, and Zuora plans to fully integrate Zephr by early next year, per Adweek.
  • Zephr's clients include News Corp., McClatchy and Bauer.

What they're saying: "The early days of digital subscription technology treated paywalls as a blunt instrument, typically limiting the number of articles a reader could consume based on volume. As the subscription economy has matured, so has the technology powering it," Adweek's Mark Stenberg writes.

What's next: When asked about future acquisitions on Wednesday's earnings call, Tzuo said they "still have a lot of dry powder" from the Silver Lake investment.

  • "We want to make sure that we optimize this acquisition and the benefits that we see from it. We're pretty excited about it. But we do have an M&A machine that is spun up that's making sure we've got our ear on the ground looking for future opportunities as well," he said.
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