Zuora Agrees to Be Acquired by Competitor in $1.7 Billion Deal

In a significant move in the subscription economy, Zuora, a leading provider of software solutions for managing subscription-based services, has agreed to be acquired by private equity firms GIC and Silver Lake for $1.7 billion.

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The Deal Details

The all-cash deal is expected to close in Q1 2025, subject to approvals and customary closing conditions. This will take Zuora, which is currently publicly traded, private. Tien Tzuo, Zuora’s CEO and chairman, will continue to lead the company.

Zuora’s Journey

Since its founding in 2007 by Tien Tzuo, K.V. Rao, and Cheng Zou, Zuora has been at the forefront of the subscription economy revolution. The Redwood City, California-based company began as a platform for orchestrating businesses’ various billing systems, with an emphasis on subscription management.

Over the past decade, Zuora has expanded its offerings through mergers and acquisitions, purchasing subscription invoicing and billing startup Frontleaf, subscription experience platform Zephr, and revenue recognition software provider Leeyo. Today, Zuora offers a range of tools to help companies manage their subscription payments, pricing, and accounting.

Recent Developments

In August 2024, the company’s market cap was hovering around $1.39 billion, with approximately 1,500 employees. In its most recent fiscal quarter (Q2 2025), Zuora reported adjusted earnings per share of 19 cents, up from seven cents in Q2 2024, on revenue of $115.4 million, up 7% year-over-year.

Private Equity Firms’ Interest

Choo Yong Cheen, chief investment officer of private equity at GIC, and Eric Wilmes, head of private equity, Americas at GIC, said in a joint statement: "Zuora’s best-in-class software powers the revenue engines for many of the largest and most exciting companies today. With rapid growth in the subscription economy, company requirements are becoming increasingly complex. Having established the category, Zuora’s products and experience position it for continued market leadership."

Industry Trends

The acquisition comes on the heels of another major take-private PE deal, with Permira completing its acquisition of Squarespace after upping its bid to $7.2 billion. Private equity mega-deals have surged this year, on track to challenge the 22-year record set in 2021.

In Q2, private equity firms announced 122 deals worth $196 billion, making it the strongest period for PE capital deployment since the downturn began in Q3 2022, according to EY. This trend is expected to continue, with more companies considering going private as a way to navigate the current economic landscape.

Conclusion

Zuora’s acquisition by GIC and Silver Lake marks an exciting new chapter in the company’s journey. With its established leadership position in the subscription economy and continued innovation, Zuora is poised for sustained growth and success. As the industry continues to evolve, it will be fascinating to see how private equity firms like GIC and Silver Lake contribute to the next phase of Zuora’s development.

Company Background

Zuora was founded in 2007 by Tien Tzuo, K.V. Rao, and Cheng Zou. The company began as a platform for orchestrating businesses’ various billing systems, with an emphasis on subscription management. Over the years, Zuora has expanded its offerings through mergers and acquisitions, purchasing several companies to enhance its portfolio of products.