Zoom increases IPO price range ahead of Thursday listing

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Zoom, the developer of video conferencing software, plans to list its shares on the Nasdaq under the ticker symbol “ZM” at between $33 and $35 apiece, per an updated S-1 filing. The company has also announced plans to sell $100 million in Class A shares to Salesforce Ventures at the initial public offering price.

The latest price range is a step up from Zoom’s earlier plans to charge between $28 and $32 per share.

Zoom plans to sell 9,911,434 shares of Class A common stock in the listing, expected Thursday. A midpoint price would secure Zoom about $337 million in new capital. If Zoom prices its shares at the top of the planned range, it’s poised to see an initial market cap of $9 billion, or a 9x increase to the $1 billion valuation it garnered with its latest private funding round.

The company, however, has been valued much higher on the secondary market since its $115 million Series D in 2017.

Zoom is backed by Emergence Capital, which owns a 12.2 percent pre-IPO stake; Sequoia Capital  (11.1 percent); Digital Mobile Venture, a fund affiliated with former Zoom board member Samuel Chen (8.5 percent),; and Bucantini Enterprises Limited (5.9 percent), a fund owned by Chinese billionaire Li Ka-shing.

The company is a rare breed of unicorn: A profitable one. That characteristic has likely fueled demand for its IPO, especially as several other unprofitable unicorns transition to the public markets.

Zoom, which has raised a total of $145 million to date, posted $330 million in revenue in the year ending January 31, 2019, a remarkable 2x increase year-over-year, with a gross profit of $269.5 million. The company similarly more than doubled revenues from 2017 to 2018, wrapping fiscal year 2017 with $60.8 million in revenue and 2018 with $151.5 million.

The company’s losses are shrinking, from $14 million in 2017, to $8.2 million in 2018 and just $7.5 million in the year ending January 2019.

The company will list its shares on Thursday, the same day “PINS,” another high-profile stock, will begin trading.

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