ZoomInfo IPO and Its Connection with Zoom Video
ZoomInfo Technologies went public on June 4. The company followed in Warner Music Group’s footsteps, which went public on June 3.
June 5 2020, Published 9:26 a.m. ET
ZoomInfo Technologies went public on June 4. The company followed in Warner Music Group’s footsteps, which went public on June 3. The ZoomInfo IPO raised nearly $1.0 billion after the company sold 44.5 million shares at $21 per share.
ZoomInfo IPO drew strong investor interest despite the COVID-19 fallout. The shares nearly doubled on the debut after rising to $42 during the session. The shares closed with a 62% gain at $34. Warner shares rose more than 20% after it priced them at $25 per share for the listing.
Chinese technology conglomerate Tencent wanted a stake of $200 million in Warner ahead of the listing. Notably, Tencent has a successful track record of investing in technology startups. For example, the company backed Spotify (NYSE:SPOT) and nurtured Tencent Music Entertainment Group (NYSE:TME) before their listings in 2018.
ZoomInfo is the technology sector’s biggest IPO in 2020
So far, ZoomInfo IPO is the technology sector’s biggest IPO in 2020. ZoomInfo’s successful listing goes shows the strong investment appetite for promising technology stocks despite COVID-19.
ZoomInfo serves corporate clients, particularly sales and marketing departments. Also, the company sells cloud database subscriptions. Corporates turn to ZoomInfo’s database to support their customer acquisition.
The company said it has over 15,000 customers across various industries. In ZoomInfo’s IPO prospectus, management said it identified over 800,000 potential customers globally. The company estimates its market opportunity at $24 billion. With $293 million in revenue in 2019, ZoomInfo has barely scratched the surface of the available opportunity.
Zoom Video one of the clients
Notably, video conferencing provider Zoom Video is one of ZoomInfo’s customers.
ZoomInfo’s IPO prospectus said, “Within the first year that Zoom Video deployed ZoomInfo, Zoom Video’s revenue grew by 300%. ZoomInfo has become an essential tool for Zoom Video’s sales representatives…today 90% of the Zoom Video sales team uses the ZoomInfo platform.”
COVID-19 has boosted the demand for Zoom Video’s service. The company delivered 169% year-over-year revenue growth to $328.2 million in the first quarter. Zoom Video stock has jumped more than 200% year-to-date.
Notably, ZoomInfo IPO has increased the number of public companies with the word “Zoom” as part of their name. The names might confuse investors. For example, the SEC suspended trading in shares of Zoom Technologies in March after investors confused it with Zoom Video.