Our presentation during the Venture Capital Case Competition at Stanford University on why Zuora was a strong investment opportunity in 2009. No slide on IRR.

1. Title
Builds, Manages, and Grows your Subscription Business
Santa Clara University
Sophia Boettcher | Sol Tran | Endalk Yitref | Dennis Ding

2. MarketComputing
Cloud Opportunities
Allows Companies to focus on the Product, not the
Infrastructure
End
Infrastructure Users
Web Server
The Cloud manages
Business developer’s Infrastructure
Web Server Local
Model on-demand: Balancing
Web Server
Router
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

3. Trend Toward SaaS
Growth of Cloud Computing
...worldwide spending
26.5% on Cloud services will
grow from $16 billion by
Projected Market 2008 to $42 billion in
Annual Growth 2012.
Rate* IDC Research
*Source: Gartner Inc.
More Demand for On-Demand
Developers’ Shift towards SaaS Confirms Trend
~100,000 ~150,000 ~400,000 Millions of .NET
developers developers developers developers
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

4. The Four Waves of E-Commerce
1st Wave: 1995 2nd Wave: 1999 3rd Wave: 2002
Simplified Online Commerce Automated Online Payments Monetized Eyeballs
payments
The 4th Wave: 2009
1. Builds, manages, and grows
subscription businesses online
2. Generic billing system for the SaaS
and apps market
3. Growing market due to a huge need
to monetize the burgeoning business
Cloud
Zuora is uniquely positioned to dominate the market
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

5. Customer Needs
App Developer Small/Mid-sized Large Enterprises
Types of Companies
Customers
Wants to monetize Wants a billing Wants a billing
Customer Pain their application, but subscription service system that can be
Point can’t afford to create that adapts to complex set up fast for their
a billing system customer needs Sun Cloud Initiative
Manual Systems Standalone Gateways Tradition ERP Systems
Cannot be scaled to Does not support Not flexible enough for
different sizes of complex billing & the dynamic e-commerce
business invoicing environment. And does
not support subscription
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

6. Products
Optimizes Every Step of Your Subscription Business
Launched with Launched with
On-demand Billing & Integrated Payment 100% Native Force.com
Subscription Management Solutions for Subscriptions
1. Generates sales quotes
1. “Salesforce.com of billing” 1. Manages recurring and create orders in Z-
payments Billing
2. One efficient system that
records all billing 2. Allows subscription 2. Synchronizes invoices,
information, subscription, business to get paid payments, & subscriptions
and invoices 3. Automates payments and 3. 360 degree visibility to
allows business to focus on sales reps and customer
their products service
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

7. Products
With Zuora, Billing is as Easy as 1,2,3
1 2 3
Create your pricing Automate your
and packaging billing and payment
Take orders from your
strategy operations
web site
Supports any type of billing need you have
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

8. Business Model
Wide Range of Potential Customers + Wide applicability $$$
Take 2% of sales Take 1% of sales Enhances the performance
Increases Sales
100+ Companies
More Value More Revenue
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

9. Market Opportunities
Large Enterprise Software
A total market size of $47.5B in fees and services
SaaS
1. The global market is expected to grow to near $20B
by 2011
2. 26.5% long-term annual growth rate
Potential Future Markets
PayPal Financial Newspaper Online Online Utility Facebook
Transactions Institutions Magazines Entertainment Education Subscription Apps
Facebook Application Market -> Each user pay $1 a month for one app
$72 Million
200+ Million Users $1/Month $2.4 billion a year a year
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

10. Management Team
Highly Talented and Experienced Team
• Built Salesforce's original billing system
Tien Tzuo • Former CMO and Chief Strategy Officer at Salesforce
CEO • Handled integration with billing systems at Crossworlds
K.V. Rao • Headed strategic marketing and business development while
President working at WebEx Communications for 5 years
• U.S. patent in computing technology
Cheng Zuo • Launched the order-to-cash OSS system at WebEx
CTO • Designed and built software products at WebEx
• Co-Founder and CTO of BeyondWork
Gary • Managed G&A functions as CFO of KnowHow
Hagmueller • VP of finance and operations for Vinfolio
CFO • Senior Director of Finance for RouteScience Technologies
Investors: Salesforce CEO Marc Benioff, Benchmark Capital, Shasta Ventures, Lehman Bros.
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

11. Competition
Start-ups Payment Traditional
In House Gateways ERP
Systems
Completeness
of Features
Scalability
Flexibility
Total Cost of
Ownership
Poor Excellent
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

12. Financials
Projected Incomes (in Thousands)
Assume each customer earns 2009 2010 2011 2012 2013
$2.5M in Revenue No. Customers 100 450 1,035 1,915 2,776
Revenue / Customer 50 50 50 50 50
Sales Revenue $5,000 $22,500 $51,750 $95,738 $138,819
... And a 26.5% growth rate
COGS $750 $3,375 $7,763 $14,361 $20,823
for the business cloud Gross Margin $4,250 $19,125 $43,988 $81,377 $117,996
Operating Expenses $8,500 $12,500 $27,500 $42,500 $62,500
Zuora takes 2% of total sales EBIT -$4,250 $6,625 $16,488 $38,877 $55,496
in subscription business
Revenue & Profit Growth
$160,000
$140,000
Break-Even by 2010 $120,000
$100,000
$80,000
$60,000
Revenue
Hit $100M in revenue by $40,000
2013 $20,000 EBIT
$0
-$20,0002009 2010 2011 2012 2013
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

13. Risks
Risks/Concerns for Zuora
Large enterprises reluctant to Already has cost-effective billing
switch over to Zuora system
Cloud giant, like
Has happened in the past like
Amazon, building up their own
Google outcompeting Accenture
billing service
Other Start-ups enter the With a big market, other start-
market ups are going to join
Risk/Concern for Investors
Already have a lot of money in
Late-Stage Investment
the bank
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

14. Exit Strategy
SaaS Software Traditional Other Potential
Enterprise Software
E-Commerce
Companies Acquirers
Financial Institutions
•To provide •Further enables •Allows eCommerce
billing system for entry into Cloud vendors to further
apps on their Computing control the
platform payments value
chain
Expand existing market base and produce services in
IPO order to obtain financial and strategic position as excellent
investment opportunity for public market investors.
Background | Product | Business Model | Market | Team | Competition | Financials | Risks | Exit

15. Q&A
Index Appendix
Cloud Computing
SaaS Trend Board of Directors
Partners
The Next Wave
Solving the Problem
Customer Needs Historical Example
Products Salesforce Financials
3-Step Process Market Risks
Business Model Revenue Calculations
Market Expense Calculations
Management Team Return on Investment
Competition
Financials
Risks
Exit Strategy

16. Board of Directors
Strategic Board of Directors
Scott Thompson • Brings extensive knowledge of online payments to the board
President, PayPa • Key partner in integration of PayPal into Zuora
l
Jason • Build Walmart.com into one of the leading commerce sites
Pressman on the web
Shasta Ventures • Savvy in software and tech-enabled services sectors
Peter Fenton • Software, digital media, and technology-enabled services guru
Benchmark • Has experience as an entrepreneur and strategy consultant
Capital
Also on the Board: Zuora CEO Tien Tzuo and Zuora President K.V. Rao
Advisory Board: Elizabeth Tse (eBay), Dan Halabe (Accenture),
Michael Everett (Cisco), David Welsh (Adams Street Partners)

17. Partners
Key Partners Added Value
Easy Integration with the CRM Leader
Pre-integrated to deal with PayPal
payments
Helps integrate Zuora’s products with SMB
accounting software like QuickBooks and
Financial Offerings like NetSuite
Partnerships with hosting providers, cloud players, other
Future: payment gateways and more accounting software providers.

18. Solving the Problem
Application Small/Mid-sized Large Enterprises
Developer Companies
Wants to monetize Wants a billing Wants a billing
their application, but subscription service system for their
Customer Pain can’t afford to create that adapts quickly to Sun Cloud Initiative
Point a billing system customer needs
Application Zuora offers Right model, right
How Zuora Developer can solutions for every team, and right
Satisfies this integrate with aspect of the billing capability to fit
Need Zuora’s billing process their needs
platform

19. Historical Examples
Similar Space with Similar Growth Trajectories
• Pioneer in CRM nine years ago
• Now has a Market Capitalization of $4.5 Billion
• 55,400 Corporate Customers and 1.5 million
individual subscribers
• Over $1 billion in revenue last year
• At the forefront of the 2nd wave (automated online
payments)
• Grew rapidly, Q1 of 2002 totaled $48.8 M, 248%
growth from Q1 of 2001.
• Sold out to Ebay for $1.5 Billion

20. Salesforce Growth Rate
Salesforce Revenue and Net Income
Revenue & Profit Growth From 02-09
$1,200
$1,000
$800
$600
$400
$200
$0
2002 2003 2004 2005 2006 2007 2008 2009
-$200

21. Market Risks
Risks/Concerns Mitigations
Could be in the future, large
Not cost-effective for large
enterprises still exploring it as an
enterprises
option
The technology is constantly
Reliability improving, so the Cloud will be
more and more reliable
The cost savings aspect
Security outweighs the downside of
losing control

22. Revenue Calculation
Assume on
Given 100
Around $5M in Revenue by average, Zuora
customers at the
end of Year 1 earns $50k a year
end of year 1
from each customer
2009 2010 2011 2012 2013
Market Growth Rate 25% 25% 25% 25% 25%
Customer Growth Rate N/A 350% 130% 85% 45%
Total Customers 100 450 1035 1915 2776
Average Customer $2,500,000 $2,500,000 $2,500,000 $2,500,000 $2,500,000
Subscription Sales
Zuora Fee 2% 2% 2% 2% 2%
Zuora Revenue $5,000,000 $22,500,000 $51,750,000 $95,737,500 $138,819,375

23. Expense Calculation
Salary # Total
Employees $110,000 25 $2,750,000
Upper Management $150,000 7 $1,050,000
Misc. $80,000 10 $800,000
Total Salary $4,600,000
Server Cost $ 800,000
Other Costs $ 600,000
Total Operating Expenses $6,000,000
*Note: Salary expenses are expected to grow with revenue and EBIT, considering
bonus, pay raises, and new recruitments

24. Return on Investment
2009 2010 2011 2012 2013
EBIT -4250 6625 16487.5 38876.88 55496.47
Amount Invested 21500 21500 21500 21500 21500
Return on Investment -19.77% 30.81% 76.69% 180.82% 258.12%
Return On Investment
300.00%
250.00%
200.00%
Average Return on
150.00%
Investment:
100.00%
50.00%
105%
0.00%
-50.00%
2009 2010 2011 2012 2013
ROI -19.77% 30.81% 76.69% 180.82% 258.12%

25. Special Thanks and Sources
Aria Systems Other Sources:
Chris Fowler www.crunchbase.com
www.zuora.com
www.ariasystems.com
Zuora www.undertheradarblog.com
Kelly Jane Rosenblatt www.google.com/finance
Amy Pruitt www.451group.com
The McKinsey Report on
Gary Hagmueller Cloud Computing
Box.net
Aaron Levie
Sebastien LeMenager
Canaan Partners
Bryan Chao