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

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Zoom Video Communications Inc. in the coming week plans to join an already active season of initial public offerings as the videoconferencing company and is...

Zoom Video Communications Inc. plans to join an already active season of initial public offerings, and the videoconferencing company is looking for a high valuation as it seeks to gain more share from legacy-based video communications vendors.

The valuation is high, and could still zoom higher Should Zoom price at the top of its range, it’s looking at an $8.3 billion market cap. With its most recently reported sales, that puts Zoom at an enterprise value of 25 times its annual revenue. That’s in the ballpark of Okta Inc. OKTA, +0.23% Atlassian Corp. TEAM, -1.54% Twilio Inc. TWLO, +0.02% and the most recent tech company to IPO, PagerDuty Inc. PD, +3.27% according to FactSet data.

“Our approach to video has been substantially different from that taken by others who have attempted to add video to an aging, pre-existing conference call or chat tool,” the company said in its S-1 filing. “We developed a proprietary multimedia router optimized for the cloud that separates content processing from the transporting and mixing of streams.”

Executives and early investors hold all the power Zoom is offering 10.9 million class A shares in the IPO to raise $348.1 million, while selling stockholders are offering 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.

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