Zoom increases IPO price range ahead of Thursday listing
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.