US-based video conferencing technology provider Zoom Video Communications will go public today in a $751m initial public offering in which mobile chipmaker Qualcomm is selling $30.6m of shares.
The offering consists of approximately 9.9 million shares being issued by Zoom on the Nasdaq Global Select Market and almost 11 million shares being sold by its shareholders. It is floating at $36.00 per share, above the IPO’s $33 to $35 range, reportedly valuing the company at about $9bn.
Salesforce Ventures, the corporate venturing vehicle for enterprise software provider Salesforce, has agreed to buy a further $100m of shares through a private placement that will take place concurrently to the offering.
Zoom provides software that helps enterprise users communicate and collaborate with each other through video or voice chat. It more than doubled revenue to $330m in 2018 while improving a $3.8m net loss to a $7.6m net profit.
The company had raised roughly $160m in funding since being founded in 2011, with Qualcomm first investing in a $6m series A round in 2013, through its Qualcomm Ventures unit, alongside Jerry Yang, Subrah Iyar, Dan Scheinman and Bill Tai.
Horizons Ventures, Yang and Patrick Soon-Shiong added $6.5m for the company in 2013, and the first two returned for a $30m series C round two years later that was led by Emergence Capital and also backed by Qualcomm Ventures.
Qualcomm Ventures then took part in a series D round in early 2017 that was $115m in size according to Zoom’s IPO filing, and which reportedly valued it at $1bn. Sequoia Capital invested $100m to lead the round, which also featured Emergence Capital and AME Cloud Ventures.
Bin Yuan, a family member of Zoom CEO Eric Yuan, owned almost 89% of the company’s 6.7 million class A shares – the class being issued in the offering – prior to the IPO, and is selling $36m of shares. He will have 20.4% of the class A shares post-IPO.
Qualcomm owned 1.7% of the company’s 250 million class B shares, which will be reduced to 1.5% post-IPO. Zoom’s largest investor, Emergence Capital Partners, had 12.2% of its class B shares pre-IPO and is selling $32.8m of stock.
Other selling shareholders include Sequoia Capital, which held 11.1% of the class B shares, and which is selling $29.8m; Horizons Ventures vehicle Bucantini Enterprises (5.9%), which is selling $18.3m; and AME Cloud Ventures (2.1%), which is divesting $37.9m.
Charitable organisation National Philanthropic Trust is selling all 300,000 of its class A shares and will make a return of $10.8m.
Morgan Stanley, JP Morgan, Goldman Sachs and Credit Suisse are lead book-running managers for the IPO while BofA Merrill Lynch, RBC Capital Markets and Wells Fargo Securities are book-running managers and JMP Securities, KeyBanc Capital Markets, Piper Jaffray, Stifel and William Blair co-managers.
The underwriters have the 30-day option to buy up to 3.13 million additional shares, which would potentially lift the size of the offering to $864m.
