According to a recent MarketsandMarkets report, the global cloud billing market is expected to be worth $16.59 billion by the year 2021. The cloud billing market was estimated at $5.7 billion last year, thus translating to a 24% annual growth rate over the next five years. San Francisco-based Aria is a leading player in this industry.
Aria was founded in 2003 by co-founders Brendan O’Brien and Edward Sullivan to provide a simpler and more efficient way for online companies to bill for their products and services. The two wanted to build a solution that would meet the needs of companies relying on alternative billing models such as usage-based billing and subscription-based billing. They devised a billing platform to cater to these billing models. Billing solutions range from the classic subscription-based solution to the more modern usage-based solution with a high watermark threshhold, one-time charges, or a combination of any of these. Aria’s services are also used by companies that offer freemium services. In their cases, Aria’s services kick in immediately, even at the free stage and include billing services for the paid-for premium service.
Aria has also ensured that it is integrated well into its customer’s existing systems. It has partnerships with Netsuite, Oracle, SAP, and Salesforce to help integrate seamlessly with their ERP offerings.
It has also been developing its products with emerging industries in mind. Last year, it launched a suite of solutions for the connected vehicles. The cloud-based monetization platform is focused on the connected car, on-demand transportation, and telematics market. It enables these companies to charge their customers for services on usage basis, such as car sharing by Zipcar, or subscription basis, such as Wi-fi subscription charges. The offering helps the automotive industry target recurring revenue opportunities.
Other improvements in the product line-up include the launch of Aria Crescendo – a new monetization platform that enables multi-dimensional customer choice. Crescendo will allow Aria’s customers to provide services for both individual consumers and business entities. It offers highly tailored product offerings, user friendly configurations that include the ability to define attributes including: pricing, promotions, consumption options, payment methods, dunning processes, product and account hierarchies, and business terms such as payers, channels, business units, geographies and entities. The platform will also aggregate bills for multiple locations and make services portable for customers as they change location, device, or use case.
Aria’s services have helped it amass an impressive list of customers. Its customer list of more than 150 organizations includes names like AAA NCNU, Constant Contact, Falck, Hootsuite, Pitney Bowes, Audi, Adobe, Telekom Denmark, Philips, Roku, and VMware. Aria is estimated to have managed nearly $11 billion in billings for its customers in 2016.
Aria is privately held and does not disclose its financials. While Aria may cover the billing models of its customers, it keeps its own billing and monetization model under wraps. Reports suggest that the company charges an initial set-up fee followed by a flexible pricing model, which can be based on a revenue share or per customer basis.
Estimates of revenues and profitability are not known. It has been venture funded so far with $133 million in funding from investors including Bain Capital Ventures, HWVP, InterWest Partners, Tugboat Ventures, Venrock, and VMware. Its last round of funding was held in February 2016 when it raised $50 million at an undisclosed valuation.
Aria’s secrecy around its numbers makes it difficult to assess the company’s valuation. But to understand its standing, one could look at rival Zuora. Zuora managed $42 billion in billings back in 2015, has raised $250 million, was recently valued at $1 billion. Considering that Aria was nearly a quarter of Zuora’s size last year, its valuation is probably still significantly short of the Unicorn status. Zuora is planning to go public this year. It may be a little while longer before Aria decides to follow that route. Meanwhile, it does appear to be taking the right steps in terms of product innovation.