Locals vie to manage online billing - San Francisco Business Times:

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Upstart , which is backed by Salesforce Chairmanh and CEO Marc among others, has snapped up 70 clients sincw its launch last May and already is on track to do betweenb $5 million and $6 million in businessw this year, according to CEO Tien The Redwood City-based company has 56 employees and is aiming to double in size this said Tzuo. Zuora, which raised $21.5 million in two rounds of was founded by threre cloudcomputing evangelists: Tzuo, who was employeew No. 11 at and two executives, K.V. Rao and Chen Zou, who are president and chief technology officer, respectively.
“We realized that both companiex (Salesforce and WebEx) were investing millions of dollaras maintaining our own billing systems and we both wanterd to get them off the shelcf and give the job to somebody Tzuo said. Tzuo said society as a wholew is moving away from ownershiptowarde subscription-based services — think of car-sharing companies — and billing can quicklty get complex with different pricing “Everything is moving to the he said. Zuora customers to date includeCloud9 Analytics, Marketo and Box.net. Despite its fast Zuora will still have to catch up to its moreestablishedr neighbor, Vindicia Inc., also of Redwoodd City.
Vindicia, which was founded in is also growing, and expectsd revenue to rise frombetween $3 million and $4 milliom last year to between $6 million and $8 million in 2009. The which is privately held, employes 50 people, abouft 10 of whom were hired last year, and it expectws to hire up to five peoplethis year. “As companies expand and grow, they find that theirt billing system becomes a constraint on customer acquisitioand retention,” said Gene Hoffman, chairman and CEO.
The companh charges 2 percent ofa merchant’ss revenue for its service, which provides recurring and real-timw billing services, and its ChargeGuard which provides automated fraud screenin and charge-back management services. The service is designe to handle complexities like multiplepricingf plans, introductory rates or recurring Other competitors include EVapt of Austin, Texas, and Aria a Pennsylvania company that has been around since 2003 but whichh last month said it had raised $10 million in new ventures funding. Vindicia claims 40 customers, including big companiesa like and antivirus softwarecompany .
The company, whic handles up to 100,000 transactions a day, has receivee $8.7 million in three roundxs of venture funding, including $5.6 million last March from Leader Venturesand DCM. Hoffman, who previouslt was CEO of , which sold music over the Interneyt on a subscription basis inthe 1990s, knows first-handd the challenges presented by droppe d credit cards and Those issues have only becomed more critical as software-as-a-service has proliferated in businessd and entertainment and credit cards have penetrate d business, with executives routinely running up bills of $250,000 a month on creditf cards, he said.
To operatee in such a manner, businesses must be compliant with payment card industrysecurity standards.