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Here’s a Startup Microsoft’s Money Couldn’t Buy

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Zoom turned Microsoft down

According to data from Crunchbase, Microsoft (MSFT) has bought about a dozen companies since the beginning of 2018, and it recently announced its acquisition of IoT (Internet-of-Things) software maker Express Logic. But there’s one startup that has eluded Microsoft’s acquisition spree in recent years. That startup, video chat provider Zoom (ZM), went public recently at a valuation of more than $9.0 billion.

According to a Recode report, Microsoft made repeated attempts to acquire Zoom before it went public this month, but the startup turned down the offers. Microsoft’s latest attempt to purchase Zoom came as recently as a few months ago.

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Zoom is profitable

Zoom provides a cloud video conferencing service that caters to business customers. Microsoft is also in the video conferencing business through its Skype and Microsoft Teams brands. If Microsoft had succeeded in its purchase of Zoom, it could have used the startup’s technology and customer base to accelerate growth in its video conferencing businesses. Zoom, a rare breed of Silicon Valley startup, made a profit of $7.6 million on revenue of $330.5 million last year.

The market for workplace collaboration software and services such as video conferencing was valued at $8.2 billion in 2017 and is poised to reach $16.6 billion by 2025, according to estimates by Grand View Research.

Startups that rejected big tech’s takeover bids

Microsoft is far from being the only major technology powerhouse that has failed to convince a Silicon Valley startup to sell to it. Twitter (TWTR) turned down acquisition attempts by Google (GOOGL) three years before it went public, according to a Business Insider report. Facebook (FB) also sought to acquire Snapchat (SNAP) for ~$3.0 billion, but the startup rejected the offer, instead choosing to go public at a valuation of $24 billion.

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