Zoom, the video conferencing company files to go public, possibly a profitable IPO

3 min read

It seems filing an Initial Public Offering(IPO) is in trend since quite some time now. Major companies like Lyft, Uber, Spotify, and Airbnb have already filed an IPO, with Pinterest’s recent addition to the list. Last week, Zoom, the video conferencing company filed on the Nasdaq Stock Market to go public by next month.

But it seems Zoom is on the brighter side with respect to its revenue as the company has raised around $145 million from the previous year and this year the company holds $330 million in revenue. There is a year on year increase with respect to the increase in the company’s revenue. Zoom marked more than doubled revenues from 2017 to 2018 as it was $60.8 million in 2017 and it became $151.5 million, last year. Even the losses have shrunk from $14 million in 2017, $8.2 million last year and just $7.5 million this year in January 2019.

Eric S. Yuan, the CEO, and founder at Zoom will hold  22% of the company share. Li Ka-shing, a Chinese billionaire holds 6.1% while the current directors and executives own 36.7%.

Emergence Capital who owns 12.5% (pre-IPO stake) has been backing Zoom, according to the IPO filing. The investors’ list involved in Zoom includes Sequoia Capital who holds 11.4% (pre-IPO stake) and Digital Mobile Venture holding 9.8%.

Eric Yuan who previously was the Vice President of engineering at Cisco, had sold Cisco for $3.2 billion in 2007. In a statement to TechCrunch, last month, he said that “he would never sell another company again.” This clearly indicates that he preferred opting for an IPO for Zoom instead of selling it.

Few users are appreciating the effort taken by Eric Yuan. A user commented on HackerNews, “The founder from Cisco is Eric Yuan. He’s been working this thing for a long time and it’s awesome to see them get to this.” Another user commented, “I’m impressed by their financials. $330m total revenues and $7m profit. Rarely do we hear these days about a tech company IPO who’s profitable”

Some others think that Zoom is not good software and their experience with Zoom has been bad. A comment reads, “The whole experience has been bad enough that I get actively annoyed at seeing giant Zoom ads plastered all over 101, on buses, at T5 at JFK, etc. and think about what those cost compared to allocating some engineering time to fixing really basic bugs. Maybe it’s a cheaper solution than the other options, I don’t really know. But if the decision was up to me, Zoom would be basically last on my list if any significant portion of the company was using Linux.”

Though the figures show that the company is on the profit side, but it would be interesting to know how a company remains profitable while going public.

To know more about this news, check out Zoom’s official statement.

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