The video-conferencing platform –Zoom which became hugely popular during the Covid-19 pandemic announces the acquisition of cloud call centre service provider Five9 for about $14.7 billion in an all-stock transaction. Zoom, a 10-year-old company based in San Jose, California, has been one of the pandemic’s biggest success stories as it provided a replacement for physical meetings. Zoom is taking advantage of the impressive rise in its stock price in the past year to make its first major acquisition. 2-years ago, Zoom was valued at almost $16 billion and its market cap has since swelled to reach about $106.7 billion. 20-year-old Five9 will become an operating unit of the popular video conferencing platform after the deal, which is expected to close in the first half of 2022.
In a recent statement by Zoom, it said the move will “help enhance Zoom’s presence with enterprise customers and allow it to accelerate its long-term growth opportunity.” The acquisition of Five9 has amassed over 2,000 customers worldwide including Citrix and Under Armour and processes over 7 billion minutes of calls annually — this move will help Zoom enter the “$24 billion” market for contact centres. The proposed acquisition is Zoom’s latest attempt to expand its offerings. In the past year, the video conferencing software has added several office collaboration products, a cloud phone system, and an all-in-one home communications appliance.
It is believed that joining forces between Zoom and Fiv9 will offer both firms “significant” cross-selling opportunities in each other’s respective customer bases going forward. Eric S. Yuan, Founder & Chief Executive of Zoom, in a statement explains, “We are continuously looking for ways to enhance our platform, and the addition of Five9 is a natural fit that will deliver even more happiness and value to our customers”. Yuan continues, “Enterprises communicate with their customers primarily through the contact center, and we believe this acquisition creates a leading customer engagement platform that will help redefine how companies of all sizes connect with their customers”.
Rowan Trollope, Chief Executive of Five9 also had something to say, “Businesses spend significant resources annually on their contact centers, but still struggle to deliver a seamless experience for their customers”. He explains that “It has always been Five9’s mission to make it easy for businesses to fix that problem and engage with their customers in a more meaningful and efficient way. Joining forces with Zoom will provide Five9’s business customers access to best-of-breed solutions, particularly Zoom Phone that will enable them to realize more value and deliver real results for their business. This, combined with Zoom’s ‘ease-of use’ philosophy and broad communication portfolio, will truly enable customers to engage via their preferred channel of choice.”
While the Covid-19 crisis has helped Zoom become a household name, the company faces pressure to find new avenues of growth as economies rapidly reopen and the need for remote conferencing dips. Analysts say it’s time for Zoom to eventually add new features to encourage more people to pay for its services irrespective of its breakneck success in the past, especially during the pandemic. They say Zoom’s latest acquisition allows it to take up the challenge of pushing into a whole new sector of Customer Service Centres.