Zoom: Redefining Video Conferencing
Zoom, the cloud video conferencing service, announced a $100M investment from Sequoia Capital this morning. This colossal financing simply represents another seminal milestone for Zoom — far from its humble office abode in Santa Clara where we first met the company. Sachin Deshpande, my colleague whom co-led the investment, recounts the early days in his blog post.
We invested in Zoom back in 2012 from our Early Stage Fund — well before the hype and the company’s incredible growth trajectory. At the time, we simply encountered a passionate founder, Eric Yuan, whom was driven by a maniacal obsession to build a video conferencing product that was superior to anything on the market.
Eric definitely had street cred in this category to build the optimal product from the ground-up. He left Cisco in 2011 out of frustration, fully aware that the WebEx online conferencing product was inferior since it failed to address the needs of today’s savvy mobile road warrior. Eric’s intent was simple: build a robust and intuitive video conferencing product which worked seamlessly across desktop, mobile, tablets and even many existing conference room products. Basically tap into the latent demand for cloud-based video conferencing, a massive hole not addressed by legacy providers. The Zoom vision was straightforward: build the best product on the market or alternatively expressed in more crude fashion: build “Video Conferencing That Doesn’t Suck” — the company’s endearing tagline which you will see plastered on the 101, SF muni buses and the Warriors jumbotron.
Zoom also resonated with our team since we felt the pain first-hand. My investing team is a globally distributed one — partners across Brazil, China, India, Israel, Korea, U.K. and across the U.S. For years, we struggled with our global conference calls. Pure audio calls encouraged aloof participation and existing video solutions exposed all the classic issues with the space. Zoom’s product not only worked seamlessly but also provided us with all the relevant and real-time collaborative tools at our fingertips. We emerged as vocal evangelists of Zoom and leveraged it for weekly meetings, prospective investment candidates and portfolio board meetings. Increased global productivity and information sharing were directly correlated to our Zoom usage.
But the more powerful data-point was when we witnessed first-hand the grassroots Zoom usage among start-ups and our portfolio companies. For years, we loved the possibilities of video conferencing space but just could not identify a new player whom cracked the code. Finally Zoom had effectively built a collaborative video platform which worked across all platforms and customers simply loved. Time and time again we heard anecdotes about Zoom as the video glue that connected distributed working teams across time zones and transcended device compatibility constraints. After our initial investment, we watched this growth from the sidelines as Zoom flew under the radar.
The Zoom metrics speak for themselves. As noted in much of today’s press, the company has 450K business customers, achieved cash flow profitability and reached $1 billion valuation in only 6 years. But what is more impressive is Eric’s relentless drive and pursuit of the next stage. He only looks ahead and now maniacally focused on creating the world’s best enterprise communication platform. Even now Eric remains both humble and hungry. As a basketball fanatic, Eric has compared Zoom to a player climbing the ranks from high school ball, to early college hoops to Division I, finally to the NBA and ultimately an All-Star at the highest level. Even at this point he still admits that Zoom hasn’t made the NBA.