Zoom is the king of social connection in this crazy, new world
If there’s one company that’s made a huge splash during the coronavirus epidemic, it’s Zoom.
In the last week, the video-conferencing software company has been the subject of several profiles in Forbes and The New York Times. Coworkers are using it for meetings, kids are hosting remote birthday parties, and students are completing their schoolwork on the platform. Someone even suggested to me that I don’t postpone my wedding in April but just live-stream it through Zoom…
And Zoom is capitalizing on this opportunity. Zoom went public last April, and since then, its shares have soared about 200%, giving it a market cap of more than $31 billion.
But when Zoom first launched, it wasn’t an obvious success story.
When the company debuted 10 years ago, the market was already crowded. There was Microsoft’s Skype, Cisco’s Webex, and Apple’s FaceTime. It seemed like there was no room for yet another player. But Zoom still took off. Why?
My colleague Michal Lev-Ram dug into this question and reached out to several investors to find out. From the story:
“Previous to Zoom, I felt like the debate around videoconference apps was ‘Which do you feel is least terrible? Let’s use that one,’” says Hunter Walk, another Silicon Valley–based seed-stage investor. (Walk did not invest in Zoom, but he is a longtime user.) “Zoom had an intersection of stable, high-quality performance plus ease-of-use, and the network effect started snowballing from there.”
Ask other avid users, and they bring up that same theme: While there were plenty of other options out there, Zoom just provided a better one.
“They built a system with a super simple, modern UX [user experience] and very few clicks to get working,” says Aileen Lee, founder of venture capital firm Cowboy Ventures (again, Lee is not an investor but a regular user of Zoom). “You’d think big tech companies with more resources would have been able to offer something as good, but they never did.”
But, Michal notes, it’s unclear yet just how many of its current influx of new users will convert to paying customers. One thing is for certain: The Zoom boom is far from over.
STARTUPS VS. CORONAVIRUS: EverlyWell, an Austin-based home diagnostics startup, announced it will offer a COVID-19 sample collection kit for home use on Monday. Founder Julia Cheek tweeted that the company will begin with a supply of 30,000 at-home kits and ramp up to 250,000 tests weekly. One kit will cost $135, which Everlywell says it sees no profit from, but Cheek is seeking government and public health partners to see if she can offer the kits for free.
Nurx, a telemedicine platform that offers birth control, PrEP, and STI test delivery, is also working on an at-home coronavirus test that will launch “within the week,” according to the company. The test will be available to people who have had direct exposure to COVID-19 and/or are experiencing symptoms.
PS: Make sure you tune in tomorrow for my last Term Sheet (😢) and for more details about the future of the newsletter!
- Scopely, a Culver City, Calif.-based developer of mobile and tablet touch-screen games, raised $200 million in Series D funding from Advance and The Chernin Group.
- UserTesting, a Mountain View, Calif.-based provider for on-demand human insights, raised $100 million in funding. Insight Partners led the round, and was joined by investors including Accel, OpenView, and Greenspring.
- Robin Games, a developer and publisher of free-to-play mobile Lifestyle Gaming, raised $7 million in seed funding. LVP led the round, and was joined by investors including 1Up Ventures, Alpha Edison, Everblue Management, firstminute Capital, Greycroft Tracker Fund, Hearst Ventures and Third Kind Venture Capital.
- Around, a video calling workplace platform, raised $5.2 million in funding. Floodgate and Initialized Capital co-led the round, and were joined by investors including Credo Ventures and Naval Ravikant.
PRIVATE EQUITY DEALS
- Blue Moon, a Chinese detergent maker backed Hillhouse Capital Group, has picked banks for a Hong Kong-based IPO raising up to $1 billion this year, Reuters reports citing sources. Read more.
- Social Capital Hedosophia, a Palo Alto-based partnership co-founded by the team that brought Virgin Galactic public, postponed plans to raise $300 million and $600 million for its second and third blank check companies respectively. The latter fund is seeking a tech acquisition likely outside the U.S. Read more about II and III.
- Lindsay Goldberg sold VDM Metals, a Germany-based developer of high-performance materials, to Acerinox, S.A. for €532 million ($572 million).
- Tuesday Capital promoted Prashant Fonseka to partner and David Jee to associate.