Jim Scheinman, founding managing partner of Maven Ventures and an early investor inÂ ZoomÂ Video Communications, is still betting on the videoconferencing companyâ€™s future and on the vision of its founder and CEO Eric Yuan. Â The company has been on a tearÂ â€” stoked by the need for its essential services during the pandemic â€” but as competition nips at its heels fromÂ Microsoft,Â FacebookÂ andÂ Google, there is a need to keep innovating its product line. To achieve that goal, Zoom is teaming up with start-ups building the next big app on its open platform using Zoom APIs.
Zoom has grown to 300 million daily users from its launch in 2013, and its market cap has risen from $15.9 billion at the time of its IPO in April 2019 to near-$50 billion. Maven Ventures has reaped a 200 times return on investment during the start-upâ€™s meteoric rise.
To spur theÂ next wave of growth, Scheinman came up with the idea for an app marketplace contest online for start-ups to build new features and functions for Zoom. In a so-called Whale Watch competition held earlier this month with a virtual backdrop of whales swimming, leaders of 10 tech start-ups who were selected as finalists among 600 contestants presented business plans in Shark Tank-like pitches over Zoom to Scheinman and four other judges. They were: Zoomâ€™s Platform and AI head Wei Lei; Carl Eschenbach, a partner of Sequoia Capital; Santi Subotovsky, general partner of Emergence Capital, and Bart Swanson, advisor of Horizons Ventures who are Zoom investors that also serve on the companyâ€™s board.
Each start-up team pitched their made-for-Zoom apps, ranging from Pledgeling forÂ pledging donations and iScribeHealth for virtual physician consultations to Bloom for specialized online classes for kids. Votes came in from an online audience poll while the judges went off-screen to decide and then announce the winner: Docket, a start-up in Indianapolis with an app to make meetings more efficient with collaborativeÂ agendas, note-taking tools, archives and task steps.
As the contest champion, Docket stands to receive up to $2 million in funding from the four participating venture firms once due diligence is done, said Darin Brown, co-founder and CEO of Docket, which launched in January 2019 with $1.5 million in VC backing and is one of several apps on Zoom. â€śFor us, it was a no-brainer to roll out our app on Zoom because of the number of users and the deep integration of Docket within the video platform,â€ť said Brown. He expects that Docket will reach 10,000 users by the end of May, up from 3,000 at the beginning of 2020.
The growth and venture funding opportunity for other contestants with innovative apps that ride on Zoom could be huge. Â â€śZoom will be the next big platform for start-ups to build billion-dollar businesses,â€ť Scheinman said. â€śOf the 10 companies we chose as finalists, every single one has a potential $1 billion business opportunity.â€ť
Not many start-ups have experienced a surge like Zoom â€“ from 10 million average daily meeting participants in December 2019 to more than 300 million each day by late April 2020. â€śThe way people communicate will be forever changed,â€ť noted Eric Yuan, founder and CEO of Zoom Video Communications in San Jose, pointing to such benefits as increased productivity and collaboration, and ease of use. â€śIn the long run, working from home and use of video communications will be more accepted as standard practice in day-to-day business,â€ť he pointed out in an email response.
The once scrappy start-up must keep innovating to stay ahead of established tech titans that have ramped up their own video conferencing services integrated within full product suites.The rebranded Microsoft Teams, which replaces Skype for Business Online for voice calls and video conferencing and functions within the collaborative Microsoft Office 365 platform, added 31 million users in one month and reached 75 million active users by late April. Googleâ€™s Hangouts, renamed Google Meet in early April and combined with its portfolio of business services such as Gmail, Docs and Drive, is adding about 3 million users every day and climbed to more than 100 million daily participants.
In addition, Facebook has expanded its video conferencing and chat features while Verizon Business entered the race in mid-April by agreeing to acquire Blue Jeans Network, a cloud-based video conferencing and event platform.
The services have similar features such as screen sharing, gallery views and meeting recordings, and even live transcripts such as from Otter.ai, which has transcribed 25 million meetings. Pricing differs little, ranging from free, limited feature versions to monthly subscriptions of $5 for small teams and $15 and $20 for larger businesses and enterprises.
â€śThe services all do have similar features but the differences come in how various features are de-emphasized in the mix,â€ť said Dan Rothman, president of software development consultancy Flatbridge Technology in New York. He pointed out that Google Meet is good for social grouping because it can be easy to access contacts, while Microsoft Teams is more business oriented, integrated with Office 365.
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