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April 18, 2019, 7:27 a.m. EDT

Zoom Video IPO: 5 things to know about the videoconferencing company

IPO prices at $36, above already raised range for a market cap of more than $9 billion

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By Wallace Witkowski, MarketWatch

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Zoom is all about happiness, really

In the S-1, the word “happy” occurs 17 times, “unhappy” occurs twice, while the word “happiness” occurs 34 times. Eric Yuan, Zoom’s president, chief executive and chairman, said in a letter filed with the S-1 that keeping both customers and employees happy was Zoom’s mission.

“Delivering happiness is what we do at Zoom,” he noted in the filing.

See also: 5 things to know about Greenlane, the closest thing to a U.S. cannabis company to go public on the Nasdaq

“Ten years ago, I was an engineering leader at a major technology company. I would visit customers, and they would tell me how unhappy they were with the technology in the videoconferencing market,” said Yuan. “This made me unhappy. There had to be something better — something designed for modern video communications, something that would deliver happiness. I knew that we would have to start from scratch to do it right,” Yuan said.

Executives and early investors hold all the power

Zoom is offering 9.9 million class A shares in the IPO to raise up to $346.9 million, down from previous plans to offer 10.9 million class A shares to raise $348.1 million. Selling stockholders are offering about 11 million class A shares, up from previous plans to offer 10 million class A shares.

Atlassian already owns 5.1% of class A shares. So far, the company has raised $160.5 million in five funding rounds with Emergence Capital Partners, Sequoia Capital and Emergence as lead investors, according to Crunchbase.

After the IPO, the company will have 24.7 million class A shares outstanding, which will entitle holders to one vote, and 233.2 million class B shares outstanding, which will have 10 votes and will be convertible to class A shares. The class B shares, the ones not available in the IPO, hold 98.9% of the votes.

Read: 5 things to know from Pinterest’s IPO filing

Of the class B holders, Emergence Capital Partners, represented by partner and Zoom board member Santiago Subotovsky owns 30.4 million shares Class B, or 12.2% of the voting power. That’s only topped by Zoom’s CEO Yuan with 47.3 million shares, or 18.9% of the voting power.

Other Class B holders include Sequoia Capital with 27.6 million shares, or 11.1% of the votes. Sequoia invested $100 million in Zoom back in January 2017. Digital Mobile Venture Ltd. with 21.3 million shares, or 8.5% of votes, and Bucatini Enterprises Ltd. with 14.7 million shares, or 5.9% of votes.

Additionally, Salesforce Ventures LLC, the VC arm of Salesforce.com Inc. /zigman2/quotes/200515854/composite CRM +0.03% , agreed to buy $100 million of Class A stock in a private placement at the IPO price, Zoom said.

/zigman2/quotes/200515854/composite
US : U.S.: NYSE
$ 244.04
+0.08 +0.03%
Volume: 3.27M
July 29, 2021 4:00p
P/E Ratio
51.04
Dividend Yield
N/A
Market Cap
$237.01 billion
Rev. per Employee
$375,437
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Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski.

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