Zoom IPO: Tip of the Iceberg
There are various hotly anticipated potential IPOs expected during 2019. Modern tech based disruptors are reaching the point where public investment forms the next stage of their development. Slack, Lyft and Uber were all expected to hit the trading floor this year, and some have already with limited success, but so far it is Zoom Video Communications that has stolen the show.
Zoom shares began trading, on The Nasdaq Global Select Market, on the 18th of April under the market abbreviation “ZM”. The video conferencing unicorn had priced its shares in advance of the launch at $36 each, but they began trading at around $61 dollars, nearly double their initial anticipated value. After some fluctuation the current price has exceed $65 dollars a share, vastly exceeding virtually all expectations. The original market cap was expected to be around $9 billion, this grew to $11 billion and now the current share price puts Zoom’s market cap at around $16 billion, valuing the giant as one of the world’s most valuable cloud companies.
So why was there so much interest in Zoom’s launch?
With other tech companies launching with much less success, and fanfare, it is interesting to note the key difference which made the Zoom offering standout. The main factor is the bottom line, profit. Unlike many other tech businesses which have launched IPOs, Zoom has already reached profitability. It made a profit of around $7.5 million in its financial year 2019, which represented approximately 2% margin, of its $330 million plus overall revenue. This combined with impressive growth, more than doubling revenue year on year from 2018, was a combination too good for traders to overlook.
In fact the interest was so high that a case of mistaken identity saw the value of ZOOM Technologies, whose abbreviation is “ZOOM”, jump of a massive 53,900%. Completely unrelated to the Zoom Video IPO this error by investors reflected the huge market buzz surrounding the launch.
Zoom also represents a great story behind the numbers. The company’s’ CEO and Founder, Eric Yuan, emigrated to the US from China in the late 90s and joined the development team at Webex. Webex, one of the pioneers in the conferencing market, was then sold to Cisco in 2007. After apparently becoming frustrated with the development of the platform under Cisco’s direction, Yuan left to found Zoom in 2011 and the rest is history. Now with the current valuation Yuan’s 20% stake in Zoom makes him a multi billionaire at just 49 years old.
What does this mean for the industry?
It is only encouraging. The hottest IPO of 2019 so far belongs to the communication and collaboration industry. Gal explained to us that despite the success that Zoom have witnessed there is still a huge open sector of the market for them to target.
With Zoom continuing to capture the already existing market share, from perennial competitors like Cisco, the scope for garnering further growth in uncharted territory is certainly a tantalising one. Other industry players and analysts have recognised the significance of this milestone. Solving interoperability challenges between potential video rivals is something Pexip relish as their CEO, Odd Sverre Østlie, explains.
“The Zoom IPO is a huge milestone for the collaboration market and signals a shift in how people connect. Video conferencing is a key part of the modern workplace today. Customers want a simple, easy way to meet with anyone and are moving to the likes of Zoom, Microsoft Teams, Google Hangouts Meet, Cisco Webex Teams, and Pexip to do so. In this new world of collaboration, the most successful companies realize that interoperability between video conferencing solutions is key.”
Other industry stalwarts have welcomed the success of Zoom’s public launch as a general indicator of the industry’s good health. Mark Strassman, Senior Vice President and General Manager, UCC at LogMeIn told us more:
“The fact that some of the most highly anticipated IPOs this year are in the collaboration space is a proof point that improving the way we communicate and collaborate at work remains a top priority. As our market continues to mature, all companies need to innovate, push the boundaries of what is possible and simplify their product offerings to work for business leaders and the end-users.”
What next for Zoom?
Perhaps most ominous sign for its competitors is an intent from Zoom that this IPO represents just the beginning. Gal told us that as the market grows Zoom will too, and now it has the added incentive of rewarding their investors.
“We feel that we still have a long way to go, we see this as just the beginning. Now we have reached this stage there is a lot to do to give back to the investors, we feel we have a duty now.”
Zoom have already disrupted the video conferencing market and they now show intent to target other areas of the communication and collaboration industries. Zoom Phone, their cloud based business phone system, is only a recent addition to the portfolio. Already they are adding features, such as contact centre integrations, and preparing to disrupt another area sector of the market. This extremely successful IPO appears to represent just another stage in what may prove to be an extremely exciting future.
Industry: Unified Communications News
- SailPoint Integration Consultant
- Upto £75000 plus benefits
SailPoint Integration Consultant. SailPoint Integration Consultant is needed for this expanding service business to help them with complex deployment with their FTSE focused customer base. They are looking for experienced SailPoint Integration Consultants who have: • Strong solution designing experience with in depth understanding of IAM concepts and thorough understanding of Sailpoint domain. • Thorough understanding of Identity and Access Governance concepts • Leading and creating Identity & Access Management (IAM) technical architecture • Secure by Design principles in Identify Access management, Privilege Access management • Familiar with cloud architectures, data management and source control from a security perspective. This is a great opportunity to join a business that is growing and looking for individuals who want to grow and develop and work on some of the most complex Sailpoint deployments.
- CyberArk Integration Consultant
- Greater London
- upto 75,000 plus benefits
CyberArk Integration Consultant. CyberArk Integration Consultant is needed for this expanding service business to help them with complex deployment with their FTSE focused customer base. They are looking for experienced CyberArk Integration Consultants who have: • Strong solution designing experience with in depth understanding of IAM concepts and thorough understanding of CyberArk domain. • Thorough understanding of Identity and Access Governance concepts • Leading and creating Identity & Access Management (IAM) technical architecture • Secure by Design principles in Identify Access management, Privilege Access management • Familiar with cloud architectures, data management and source control from a security perspective. This is a great opportunity to join a business that is growing and looking for individuals who want to grow and develop and work on some of the most complex CyberArk deployments.
- Penetration Tester, UK based. Ability to achieve SC clearance
- United Kingdom
Experienced Penetration tester- UK based with the ability to achieve SC clearance. On-going training and development and paid certifications / renewals. Interested to hear from all areas of penetration testing, web app, infrastructure, mobile, etc. MUST have current hands on experience delivering penetration testing. Ideally from a consultancy background with experience working with multiple clients. OSCP / CREST / CHECK / Tigerscheme penetration testing experience / certifications desirable. Apply today for more details. All information kept in the strictest of confidence.
- Senior Data Privacy Specialist, London. CIPT
REF CH7875 £60,000 Senior Data Privacy Specialist, London. CIPT Senior Data Privacy Specialist needed to help advise client on project and programmes relating to Data Privacy and compliance. UK based role. Ideally looking for someone that has a strong appreciation of technology and Data Privacy that can work with clients to develop or enhance their strategies, policies, processes and techniques to manage cybersecurity risks while enabling business driven data. Certified Information Privacy Technologists (CIPT), Certified Information Privacy Professional/Europe CIPP/E experience and or certification highly desirable. Specific experience within the healthcare industry is of particular interest. All details kept in confidence Apply today for more information