Zephr Raises Funding as Subscription-Based Economy Takes Off

By Thomas Price Tuesday, December 29, 2020

As the internet has continued to become more accessible and larger in scope, the ability to get free content has also expanded. Especially for media, entertainment, and news, the transition away from cable and print has changed the industries significantly. Now, many major news and content companies have moved away from print purchases being a driving source of revenue, instead relying on online subscriptions to their content. However, especially with free news and so much content available online, it has become increasingly difficult to build a larger base of subscribers. As the advertisement model of revenue becomes less lucrative, the need for a more diverse set of revenue streams is necessary. London-based startup Zephr has aimed to change the traditional approach to securing subscribers. After a solid funding round and an impressive list of clients, the company looks primed for continued growth.

How Does Zephr Work?

Zephr is a startup focused on driving up subscriptions for news and content publishers. The startup was founded in 2017 with just a handful of people, and now has 30 high level workers as a part of the team.

The startup achieves the boost in subscriptions for the companies who use them by analyzing that publisher’s first-party data on its readers. This, in combination with contextual data such as time of day or consumption patterns, allows Zephr to then pore over the needs of the publisher and help them formulate a plan using the startup’s impressive software tools. The many different features offered by Zephr allow for a variety of different uses, including revenue diversification, data capture, subscription personalization, churn management, and feature management. These tools have been used quite successfully by an impressive list of clients.

In fact, Zephr’s client base includes names such as McClatchy, News Corp Australia, Dennis Publishing, Conde Nast, and more recently, The New York Post. These publishers are all giants of the industry to some regard and should garner attention on their own; however, another major point for Zephr is the results they have seen so far. The enlisting of Zephr to help with revenue and subscriptions has resulted in an average increase in conversion rates over the first six months of 150%. Adding to this is the average spike in subscription revenue being 25% over the same period of time. Zephr has services that not only have attracted major names in content and news publishing but also have proven themselves to be wickedly effective as well.

Zephr’s Funding and Plans for the Future

The outcome of the factors mentioned above is that many investors have noticed Zephr, which has resulted in solid funding for the startup. The company’s most recent funding round helped them raise $8 million, bringing the total funding up to $11 million. The funding round was led by Bertelsmann Digital Media Investments with further participation from Silicon Valley Bank UK Branch. Knight Capital and Nauta Capital had also invested in previous rounds.

Zephr plans to use its new funding toward product development, especially features relating to personalization. Additionally, they plan on expanding the company into the United States, Europe, and Asia. Considering how much Zephyr’s move into Europe and the United States at its current level netted them companies like Conde Nast and the New York Post, further expansion could lead to additional well-known publishing names. The advantage being a boost to Zephyr’s own credibility and the creation of another revenue stream. Zephr’s product appears to be working based on the data that they’ve provided, and works extremely well. Its quick subscription model is being adopted for nearly all content and the need for startups that focus on building subscribers is only going to continue to grow.

Final Conclusions

Zephr is proving itself to be an effective company despite its more conservative funding rounds. The new infusion of $8 million will continue to help the startup grow as further expansion could easily lead to an extensive client base. The main point to consider is how subscription models of revenue look to be a major path for many different industries. If Zephr can expand its scope further and continue to improve upon current services, there will be a major wave in demand that will not slow down anytime soon.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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