Zoom, the Santa Clara-based cloud video conferencing startup that last raised $6 million in January, has raised another $6.5 million in a Series B round of funding that has just closed. The new round is led by Facebook, Waze and Siri investor Horizons Ventures Hong Kong, and included existing investors Patrick Soon-Shiong and former Yahoo! CEO and co-founder Jerry Yang.
Eric Yuan, the founder and CEO of Zoom, built his company using his experience as VP of Engineering at Cisco and WebEx, as well as a team of ex-employees from each company. The startup aims to disrupt the online video conferencing industry by providing truly multiplatform, multi-person video conferencing that’s simple to use and that works with extremely high quality video regardless of platform.
Back when Yuan and his team raised their Series A round, I wondered whether the company might become an acquisition target and take the easy way out by getting picked up by his former employer, or by competitors. This renewed investment, following so closely on the heels of the original $6 million Series A, seems to indicate both the company’s backers and its team are committed to truly building a world-class business, rather than just stumping up some impressive tech and making a quick exit.
Zoom is now just over two years old, and in that time it has managed to attract 4,500 business customers, and over 3 million participants. Compare that to just 1,000 businesses on board and 400,000 participants back in January, and you get a 650 percent increase in individuals, and 350 percent growth in businesses using the platform over less than a year.
Yuan ascribes Zoom’s considerable positive growth so far to the prevalent demand for a video conferencing solution that’s both affordable, available to use across a number of devices and that doesn’t sacrifice on quality. The big players in the space have been slow to address BYOD trends in enterprise, and that’s where something like Zoom, which is available on desktop, iOS and Android excels.
Zoom’s new funding will go towards international expansion, and trying to get more traction in key verticals including education and healthcare. Yuan believes the added liquidity is the best way for the company to capitalize quickly on new market opportunities, after seeing so much success at home so far.
It’s not all great news for Zoom; back in January, the service was trying to provide video conferencing capabilities for up to 40 people at once, but has since scaled back its upper limit to 25, likely to deal with bandwidth demands. That’s still on par with industry-leading solutions, however, and its pricing and feature set is still highly competitive. Back in January I essentially called this company a success story in the making, and its updated progress suggests that’s still true.