Zoom’s IPO Highlights Rapid Growth In The Videoconferencing Space

Perhaps remote work isn’t a fad.

Last week, following in the wake of the strong-numbered Zoom S-1 IPO filing, two smaller video conferencing-focused startups also dropped financial updates. 1

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Both BlueJeans and Lifesize announced nine-figure milestones this week, perhaps hoping to catch a piece of the Zoom wave that its public financial disclosure is having. Zoom, in case you missed our coverage, sports strong recurring revenue growth coupled to GAAP net income making it a real unicorn in that it’s actually a rare beast.

Let’s explore what these companies do, and what they announced.

Two Companies

Lifesize, an Austin company that sells video conference software and hardware, has $98 million in funding to-date. Notably, they haven’t raised since January 2016, which in venture terms, is patient. Even more interesting is that Lehman Brothers (yes, that one) led the company’s $25 million Series D in 2006, according to Crunchbase data.

But what matters more is that a grip of names pertinent to our coverage put money into the firm’s 2003 Series A: Austin Ventures, Norwest Venture Partners, and Redpoint.

The firm offers bundled services for $16 to $23 per user, per month, its website says. Put that together for an office worth of people and buy some hardware and we can see that Lifesize probably has a healthy sticker price.

BlueJeans Network is another video conferencing company, this time with a focus on web conferencing and hardware. It is in the same range as LifeSize for the way it prices per-user, per-seat services.

BlueJeans has raised $175 million to date. It most recently raised a $76.5 million Series E led by New Enterprise Associates back in 2015. Prior investors include Battery, Accel, and Norwest (again), according to Crunchbase data.

So what we see here are two companies, with cash, that are competing in similar spaces. A space that Zoom recently proved can provide quick growth. That in hand, let’s talk about their newly disclosed metrics.

Two Milestones

Now, the numbers.

We care about these financial metrics because they illustrate how much room there is in the industry; it’s hard to get three companies to nine-figure revenue (and revenue-predicate) results without real market demand for the products and services on offer.

Last week, Lifesize announced that it “has surpassed $100 million in bookings with an 80 percent compound annual growth rate (CAGR) for annual recurring revenue (ARR) over the last four years.” Providing a hard-number bookings result and a compound growth rate for ARR is slightly irksome in its lack of specificity, but it’s better than what most companies are willing to reveal.

And BlueJeans announced last week that it “surpassed $100M in annual recurring revenue during the fiscal year that ended January 31” and that in its most-recent fiscal year, “customer adoption drove a 62% increase in usage of BlueJeans meetings.” I include the latter metric as it’s my new favorite vanity metric.

Regardless, Lifesize and BlueJeans (the latter is bigger than the former; each are smaller than Zoom) are showing that their market isn’t a game of winner take all. And given their varied paths to the present, it’s obvious that there’s a big demand for their services.

And that’s good for workers who don’t want to relocate.

Illustration: Li-Anne Dias.