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Zoom IPO demonstrates power of freemium pricing | Search Unified Communications

Zoom Video Communications Inc. began selling shares on the public stock market on Thursday in a move that will give the video conferencing vendor financial fuel to further challenge market leaders Cisco and Microsoft.

In the six years since launching its flagship online meetings platform, Zoom has become a profitable company — a rare feat for a tech startup — with $330 million in revenue in fiscal 2019. Zoom expects to net more than $400 million through its initial public offering (IPO) to fund operations and potential acquisitions.

Zoom’s success validates the strategy of offering free, feature-limited software licenses to gain a foothold among enterprises. The company had 344 customers that paid more than $100,000 each last fiscal year — 55% of them used Zoom’s freemium offering before subscribing.

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Zoom IPO demonstrates power of freemium pricing.

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