Main Highlights
- Zoom, which was valued at around $9 billion in its IPO two years ago, has agreed to purchase cloud contact center service provider Five9 in an all-stock transaction for about $14.7 billion.
- The 20-year-old Five9 will become an operating subsidiary of Zoom following the transaction, which is scheduled to conclude in the first half of 2022.
- According to CFO Kelly Steckelberg, the contact center is the first point of contact for customers, and Zoom with Five9 will be an omnichannel platform.
- Five9 would provide Zoom with access to a well-established sales organization and business client base that would have required time and money to create.
Zoom is making its first significant purchase after benefiting from an exceptional gain in its stock price over the last year. The famous video conferencing company, which was valued at around $9 billion in its IPO two years ago, said on Sunday evening that it has agreed to purchase cloud contact center service provider Five9 in an all-stock transaction for about $14.7 billion.
The 20-year-old Five9 will become an operating subsidiary of Zoom following the transaction, which is scheduled to conclude in the first half of 2022, according to the two companies. Zoom’s potential purchase is the company’s latest move to broaden its products.
Several workplace collaboration solutions, a cloud phone system, and an all-in-one home communications equipment have been introduced to the video conferencing software in the last year.
The purchase of Five9, which has over 2,000 clients globally, including Citrix and Under Armour, and handles over 7 billion minutes of conversations each year, would let Zoom join the “$24 billion” contact center industry, according to the firm.
Five9 would provide Zoom with access to a well-established sales organization and business client base that would have required time and money to create. We are optimistic about the merger’s cross-selling prospects since we believe Five9’s selling/go to market motion reaches a new and different buying center than Zoom presently does with its Zoom Meetings base (video) and increasing Zoom Phone (voice) growth.
“We are always searching for ways to improve our platform, and the inclusion of Five9 is a natural match that will provide even more enjoyment and value to our customers,” said Zoom founder and CEO Eric S. Yuan in a statement.
Joining together will provide both enterprises with “substantial” cross-selling potential in each other’s respective client bases, according to the two companies. “Businesses invest considerable money on their contact centers each year, yet they still struggle to provide a seamless experience for their customers,” said Rowan Trollope, CEO of Five9.
“Five9’s aim has always been to make it simple for businesses to solve that challenge and interact with their consumers in a more meaningful and efficient manner. By collaborating with Zoom, Five9’s corporate clients will have access to best-of-breed technologies, notably Zoom Phone, that will help them to generate greater value and achieve actual outcomes for their business. This, in conjunction with Zoom’s ‘ease-of-use attitude and extensive communication portfolio, will really empower customers to interact via their chosen channel of choice.”
The businesses hope to create an integrated communication and collaboration stack. Consider a combination of a suite and the finest of the breed. According to CFO Kelly Steckelberg, the contact center is the first point of contact for customers, and Zoom with Five9 will be an omnichannel platform.
“The result is a premier unified communication and customer interaction platform that can be offered to both client bases. It will enable us to cross-sell Zoom Phone to Five9 customers and deliver the contact center to Zoom’s most important clients, “Steckelberg stated.
Zoom needs to emphasize the potential that goes beyond video conferencing. The year-over-year growth comparisons for Zoom are already approaching their most difficult time, and we believe the mix of a “what’s next?” story and an inflection point for Zoom Phone makes the large combo extremely compelling.
Zoom CEO Yuan stated that the choice to partner with Five9 over creating a contact center platform made sense since the two businesses’ cultures fit and the two firms had already secured significant transactions together. “Otherwise, you create a solution; I think not only do you put in many years of labor but also the client, they don’t want to wait, right?” Yuan added.
Yuan went on to say that even with Five9, Zoom’s attitude to contact centers will remain impartial. He stated that everything must be evaluated from the eyes of the client, that Zoom customers have adopted Genesys and Twilio, as well as the firm working with numerous vendors.
Zoom ultimately purchased Five9 in order to increase its focus on contact centers and unified communications. “When we look at our video assets, their AI, and their extremely powerful back-end, we see a big potential ahead of us,” Yuan added. “I believe that by working together, we will be able to build something extremely unique in the future that will revolutionize the customer interaction platform.”
