Zephr Raises $8 Million to Help Publishers Drive Subscription Revenue

In Series A round led by BDMI

Zephr has had a busy year, and it will end on a high note. Last week, the technology platform for media companies announced it raised $8 million in a Series A funding round led by Bertelsmann Digital Media Investments (BDMI). Other investors include Knight Capital and Nauta Capital, who had invested in Zephr’s seed round, with financing provided by Silicon Valley Bank UK Branch (SVB). Including this funding round, the London-based Zephr has raised $11 million since the middle of 2019.

Zephr helps publishers like McClatchy, Conde Nast and News Corp increase subscription revenue using first-party reader data, no-code monetization tools and a drag-and-drop user interface. Zephr will invest the additional capital in product development, focusing on technology that tailors individual customer journeys. The new funding will also help the organization expand further into the United States, Europe and Asia. Additional development and expansion are particularly important to publishers in a time when the pandemic is driving readers to online publishers for the latest news.

Zephr CEO James Henderson commented on the news.

“We want to create a world where every subscription product is tailored to each individual customer; where everyone gets exactly what they want, at the right price, at the right time. It’s this laser-focus on the personal journey that sets us apart from anyone else – and is what has enabled our clients to gain customers for life,” Henderson said in the company’s December 3 announcement. “We’re thrilled to have backing from BDMI, along with our other investors. This Series A funding allows us to invest in further product development, continue to build a world-class team and further expand.”

In the last 12 months, Zephr has doubled the size of its staff, opened an office in New York City, and expanded its customers across Asia and Eastern and Central Europe. The company expects to triple revenue by the end of 2020. Zephr said that it has helped its clients see a 150% increase in conversions and more than 25% increases in subscription revenue in less than six months, by tailoring the reader experience based on their location, interests, device and engagement.

Urs Cete, Managing Director at BDMI, shared his thoughts on the firm’s investment in Zephr.

“The recent weakness in the advertising market increased pressure for media companies to diversify revenue streams and aim to introduce or optimize subscription models. We recognize Zephr’s excellent technology that empowers publishers to galvanize the online subscription opportunity and create customer journeys that are truly unique. We are impressed with Zephr’s traction in the media and publishing sector and look forward to supporting the business as it moves into 2021,” said Cete.

Knight Capital joined this funding round to support Zephr’s expansion.

“We are excited to back James and the team and support them on their journey. Zephr delivers tremendous value to its customers in the Media domain and we believe that the product will be a critical infrastructure element to the maturing subscription economy. As marketing software has personalized communication, we believe that Zephr will personalize the product offering and enable companies to optimize their revenue streams,” said Arthur Nobel, principal at Knight Capital.

What’s next?

In a blog post, Henderson talks about what’s next for the company.

“We see a future where every subscription product is tailored to the precise needs of each individual customer. Every customer gets exactly what they want, at the right price, at the right time and our clients gain customers for life. This funding will provide us the opportunity to realize that future by investing in our product, our technology and actually adding value to our customers in unique ways,” Henderson said.

“Our global growth has afforded us a stellar team from across the globe. We will continue to drive investments in our people and further expand our footprint in the US, Europe and Asia. Providing the best-in-breed technology, service and support to our customers. I speak for everyone at Zephr when I say, we can’t wait for the next year to uncover new opportunities and challenges as we shift the paradigm,” added Henderson.

Insider Take

This is a relatively new company, but their flexible options, approach to technology, and ability to support and scale subscriptions for publishers are impressive. With a code-free, drag-and-drop interface, their product and monetization tools seem easy to use and very versatile. They can adapt to different business models, erect paywalls, handle free trials, renewals, and more with minimal time and effort. It is easy to see why they’ve attracted $12 million in capital funding to date. It will be exciting to watch them grow and support publishers who need to be able to adapt quickly to the changing media marketplace.