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Building the operating system for cloud quote-to-cash: Why we invested in Zenskar

By Anant Vidur Puri, Mohammad Ibrahim Faruqi 10.4.22

We’ve been investing in cloud software for more than two decades and recurring billing has been at the heart of this model. However, there is inherent friction: all cloud businesses want to bill their customers on a recurring basis and get optimum value for their product, while cloud buyers want to maximize ROI and only pay commensurate to the value they get from the software. In reality, most recurring billing models fall short of both objectives, leaving both the cloud vendor and the buyer less than satisfied with the outcome.

We believe Zenskar will be a defining solution that shifts recurring billing to usage-based pricing.

In today’s macroeconomic backdrop, every cloud company CFO – be it a buyer or a seller – is spending more time and effort optimizing their billing. In the midst of complex consumption-based pricing, billing is emerging as the common approach to minimize friction for all stakeholders. While certain sub-categories of companies (e.g. developer tools like Twilio, SendGrid, Courier) have been early adopters, more companies today want to introduce variations of usage-based pricing (UBP). UBP aligns incentives with customers, reduces the upfront cost of adoption, allows better upselling and cross-selling, and aligns revenues with costs. It also enables true product-led growth (PLG).

However, facilitating UBP is hard: from defining the right consumption metric, setting up the metering, enabling the data pipelines for metering, invoice frequency, collections, price negotiations, and slabs – the list of challenges are endless. Today, companies with more than $100 million of annual recurring revenue (ARR) maintain double-digit teams of engineers and finance professionals to manage this while still experiencing errors and slip-ups in billing. This leads to as much as a 10% loss of revenue value.

When we met co-founders Apurv and Saurabh and heard their vision of a no-code, fully customizable billing platform, we knew they were solving a common pain point for SaaS companies. Zenskar provides a multi-variable and customizable consumption based contracting, pricing, and billing engine. The product integrates into a company’s product, allowing unlimited flexibility on pricing with multiple vectors of customizations. Companies can use a combination of usage and subscription billing, tailor the variables for each customer, modify the billing logic with scale and size, and create real-time invoices with reconciliation. While consumption based billing is an initial wedge, the vision is to build an end-to-end quote-to-cash engine.

We believe all software businesses will get to some form of consumption or UBP to align incentives with customers. Zenskar, has the potential to emerge as a product that every cloud business will want to use to optimize and simplify their quote-to-cash cycles. We’re delighted to partner with Apurv and Saurabh on day zero of this journey and build with them what will become the quote-to-cash operating system for the cloud software world.