Startups

Zoom video conferencing service raises $100 million from Sequoia on billion-dollar valuation

Comment

Business people having teleconference in meeting
Image Credits: John Fedele (opens in a new window) / Getty Images

Zoom, the cloud video conferencing service, announced a $100 million Series D round, entirely funded by Sequoia. The company now boasts a $1 billion valuation, putting it in the vaunted unicorn club.

It also announced a significant update to the product that includes the ability for customers and third parties to build applications on top of the Zoom platform.

The company, which was cash-flow positive last quarter, had previously raised $45.5 million. It actually wasn’t even looking for funding, according CEO Eric S. Yuan, when Sequoia came knocking. Sequoia had been looking for a company in the video conferencing space when it heard about Zoom from its portfolio clients.

“We had been watching the video conferencing space for many years because we were convinced that it was a huge market primed for innovation. But we couldn’t find a product that customers loved to use. That changed when our portfolio companies started raving to us about Zoom,” a Sequoia spokesperson told TechCrunch.

As for Yuan, he said when Sequoia approached him, he decided to go for a large sum as a proactive measure. Instead of coming up with an idea, and trying to get budget, he wanted cash on hand — and he found a willing partner in Sequoia. In fact as part of the deal, Sequoia partner Carl Eschenbach, who led the investment, will be joining the Zoom board.

What Sequoia saw in Zoom, was an experienced founder, who helped launch WebEx before selling the company to Cisco for an impressive $3.2 billion in 2007. Yuan candidly states that he made a mistake when he sold it to Cisco, in spite of the huge acquisition price.

That’s because back in 2007, Cisco was purely a networking hardware company. He says the Cisco team never understood his company or SaaS for that matter, and eventually tried to fold it into a social networking product. It’s worth noting that since that time, Cisco has moved hard into software via an aggressive acquisition strategy, but those were early days in that approach, and he said that he struggled with the company to make changes to the software.

He decided to start his own company in 2011 to address some of the issues he was hearing about from customers. He says part of the problem was with WebEx’s core code, which he had written 1998. He wanted to create a new video service on top of a modern cloud architecture. WebEx remains a big rival for Zoom with a huge installed base.

As for the update, it’s a classic cloud platform play. The dream of most cloud providers is to offer more than a service. It’s to become a platform on top of which companies build products. Salesforce was the first company to try this approach when it launched Force.com in 2008, and pretty much every SaaS company since has wanted to become a platform. The trouble is getting to sufficient scale, but with 450,000 businesses, including 5800 educational institutions, Zoom certainly has that scale.

Zoom, which has over 400 employees, will likely expand with the massive new investment, but Yuan wasn’t going to commit to anything just yet. He describes himself as “a conservative entrepreneur” and he will bank the money and invest in the parts of the company that require it, as the time is right.

More TechCrunch

Featured Article

DEI backlash: Stay up-to-date on the latest legal and corporate challenges

It’s clear that this year will be a turning point for DEI.

7 hours ago
DEI backlash: Stay up-to-date on the latest legal and corporate challenges

The keynote will be focused on Apple’s software offerings and the developers that power them, including the latest versions of iOS, iPadOS, macOS, tvOS, visionOS and watchOS.

Watch Apple kick off WWDC 2024 right here

Hello and welcome back to TechCrunch Space. Unfortunately, Boeing’s Starliner launch was delayed yet again, this time due to issues with one of the three redundant computers used by United…

TechCrunch Space: China’s victory

The court ruling said that Fearless Fund’s Strivers Grant likely violates the Civil Rights Act of 1866, which bans the use of race in contracts.

An appeals court rules that VC Fearless Fund cannot issue grants to Black women, but the fight continues

Instagram Threads is rolling out the ability for users to signal which sort of posts they wanted to see more or less of by swiping.

You can now customize your For You feed on Threads using swipes

The Japanese billionaire who commissioned SpaceX for a private mission around the moon on a Starship rocket has abruptly canceled the project, citing ongoing uncertainties around when the launch vehicle…

Japanese billionaire pulls plug on private ‘dearMoon’ lunar Starship mission

Malicious actors are abusing generative AI music tools to create homophobic, racist, and propagandic songs — and publishing guides instructing others how to do so. According to ActiveFence, a service…

People are using AI music generators to create hateful songs

As WWDC 2024 nears, all sorts of rumors and leaks have emerged about what iOS 18 and its AI-powered apps and features have in store.

What to expect from Apple’s AI-powered iOS 18 at WWDC

Dallas is the second city that Cruise is easing its way back into after pulling its entire U.S. fleet late last year.

GM’s Cruise is testing robotaxis in Dallas again

Featured Article

After raising $100M, AI fintech LoanSnap is being sued, fined, evicted

The company has been sued by at least seven creditors, including Wells Fargo.

12 hours ago
After raising $100M, AI fintech LoanSnap is being sued, fined, evicted

Featured Article

Sonos Ace review: A high-priced contender

The Ace are a contender in a crowded market, but they’re still in search of that magic bullet to truly let them stand out from the pack.

12 hours ago
Sonos Ace review: A high-priced contender

The change would see Instagram becoming more like the free version of YouTube, which requires users to view ads before and in the middle of watching videos.

Instagram confirms test of ‘unskippable’ ads

Commerce platform Shopify has acquired Checkout Blocks, allowing Shopify Plus merchants to make no-code customizations in their checkout to enhance customer experience and potentially boost sales.  Checkout Blocks, which debuted…

Shopify acquires Checkout Blocks, a checkout customization app

After the Digital Markets Act (DMA) forced Apple to allow third-party app stores for iOS in Europe, several developers have launched alternative stores, like the AltStore and MacPaw’s Setapp (currently…

Aptoide launches its alternative iOS game store in the EU

Time is relentless and, right now, it’s no friend to procrastination-prone early-stage startup founders. The application window for Startup Battlefield 200 (SB 200) at TechCrunch Disrupt 2024 slams shut in…

One week left: Apply to TC Disrupt Startup Battlefield 200

Cloudera, the once high-flying Hadoop startup, raised $1 billion and went public in 2018 before being acquired by private equity for $5.3 billion in 2021. Today, the company announced that…

Cloudera acquires Verta to bring some AI chops to its data platform

The global spend management sector is experiencing a tailwind of sorts. North America is arguably the biggest market in this space, but spend management companies have seen demand rise across…

Spend management startup SiFi raises $10M to grow further in Saudi Arabia

Neural Concept lets designers model how components will perform before they can be manufactured.

Swiss startup Neural Concept raises $27M to cut EV design time to 18 months

The StrictlyVC roadtrip continues! Coming off of sold-out events in London, Los Angeles, and San Francisco, we’re heading to Washington, D.C. for a cozy-vc-packed, evening at the Woolly Mammoth Theatre…

Don’t miss StrictlyVC in DC next week

X will now allow users to post consensually produced NSFW content as long as it is prominently labeled as such.

X tweaks rules to formally allow adult content

Ashby consolidates existing talent acquisition tools and leans heavily on AI to automate the more repetitive steps in the recruitment pipeline.

Ashby injects recruiting with a dose of AI

Spotify has announced it’s hiking subscriptions for customers in the U.S., the second such price increase in the space of a year. The music-streaming giant reports that premium pricing will…

Spotify to increase premium pricing in the US to $11.99 per month

Monzo has announced its 2024 financial results, revealing its first full-year pre-tax profit. The company also confirmed that it’s in the early stages of expanding into the broader European market…

UK neobank Monzo reports first full (pre-tax) profit, prepares for EU expansion with Dublin hub

Featured Article

Inside Apple’s efforts to build a better recycling robot

Last week, TechCrunch paid a visit to Apple’s Austin, Texas, manufacturing facilities. Since 2013, the company has built its Mac Pro desktop about 20 minutes north of downtown. The 400,000-square-foot facility sits in a maze of industry parks, a quick trip south from the company’s in-progress corporate campus. In recent years, the capital city has…

21 hours ago
Inside Apple’s efforts to build a better recycling robot

Early attempts at making dedicated hardware to house artificial intelligence smarts have been criticized as, well, a bit rubbish. But here’s an AI gadget-in-the-making that’s all about rubbish, literally: Finnish…

Binit is bringing AI to trash

Temasek has previously invested in Lenskart, and this new funding follows a $500 million investment by the Abu Dhabi Investment Authority last year.

Temasek, Fidelity buy $200M stake in Lenskart at $5B valuation

Less than one year after its iOS launch, French startup ten ten has gone viral with a walkie talkie app that allows teens to send voice messages to their close…

French startup ten ten reinvents the walkie-talkie

Featured Article

Unicorn-rich VC Wesley Chan owes his success to a Craigslist job washing lab beakers

While all of Wesley Chan’s success has been well-documented over the years, his personal journey…not so much. Chan spoke to TechCrunch about the ways his life impacts how he invests in startups.

2 days ago
Unicorn-rich VC Wesley Chan owes his success to a Craigslist job washing lab beakers

Presumptive Republican presidential nominee Donald Trump now has an account on the short-form video app that he once tried to ban. Trump’s TikTok account, which launched on Saturday night, features…

Trump takes off on TikTok

With fewer than 400,000 inhabitants, Iceland receives more than its fair share of tourists — and of venture capital.

Iceland’s startup scene is all about making the most of the country’s resources