In the first technical IPO since the corona virus shut down a large part of the US economy, ZoomInfo increased more than 80% in its Nasdaq debut on Thursday, underscoring investors’ continued appetite for high growth subscription companies.
ZoomInfo, so as not to be confused with video clip provider Zoom Video, priced its $ 21 stock exchange on Wednesday after previously raising the expected range to $ 19 to $ 20. Early in the afternoon in New York, the stock traded at about $ 38 and valued the company at about $ 1
ZoomInfo’s technology helps business sales and marketing teams with customer search, integration with sales software tools from Salesforce, Oracle, Microsoft and others. The company says it has more than 15,000 customers in all industries and estimates that it goes for a $ 24 billion market opportunity.
Even as companies across the country closed, unemployment skyrocketed and gross domestic product is expected to fall by more than 40% in the second quarter, cloud software companies have largely weathered the storm and in many cases even benefited. Twilio, ServiceNow, Okta and Coupa have all jumped back dramatically from the first stage of Covid-19 and are now trading close to record levels.
While ZoomInfo’s revenue increased by over 40% in the first quarter, the company said in its prospectus that it is facing headwinds from the corona virus in the form of “slow growth or decrease in new customer needs for our platform and lower demand from our existing customers for upgrades in our platform. “The company said it closed all of its offices because of Covid-19 and plans to keep employees working from home during the second quarter and possibly beyond.
ZoomInfo, in its current form, was created in 2019 when DiscoverOrg acquired Zoom Information and was redirected as ZoomInfo. Henry Schuck founded DiscoverOrg in 2007 and became CEO of the merged entity after the transaction was completed. TA Associates and Carlyle Group, which were the most important investors in DiscoverOrg, are the largest shareholders in ZoomInfo.
Revenues for the combined units increased 39% last year to $ 336 million and 42% in the first quarter to $ 103.6 million. The company had a net loss of $ 5.9 million in the first quarter.
Zoom Video has perhaps been the biggest technical winner since the employees left the home office. The share has more than tripled this year, and the company said this week that customer growth increased by more than 350% during the financial first quarter compared to a year earlier.
ZoomInfo is a very different company, but it marked the other Zoom as a customer in its prospectus.
“ZoomInfo has become an important tool for Zoom Video sales representatives to penetrate new and international markets, and today 90% of the Zoom Video sales team uses the ZoomInfo platform,” the filing says.
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