Zoom CEO Eric Yuan became one of world’s richest after Covid crush

Nearly one 12 months after the World Health Organization found the coronavirus, many individuals are nonetheless staying residence from places of work, colleges, film theaters, stadiums, church buildings and eating places. Rather a lot of the socialization that will be occurring in these locations in 2020 is going on over video calls. And you may't speak about that facet of life with out speaking about Zoom.

Zoom appeared to come back from nowhere. It wasn't backed by Cisco, Facebook, Google or Microsoft, though these corporations all sought to meet up with Zoom. A small firm that was geared towards adoption in giant corporations abruptly discovered itself slammed with individuals making an attempt the service at no cost, in addition to hundreds of new paying prospects. Revenue quadrupled and revenue elevated 90-fold, catching analysts abruptly. The inventory went greater and better, simply standing out as one of the highest shares of the 12 months — alongside the likes of vaccine maker Moderna and Chinese Tesla challenger Nio — with a achieve of greater than 450%.

That's been useful for the founder and CEO of Zoom, Eric Yuan, who beforehand labored on the Webex video calling software program that Cisco purchased in 2007. Yuan was already a billionaire earlier than Covid-19, having taken Zoom public in April 2019 and impressed traders with the mix of quick development and profitability. Now he's one of the world's 100 richest individuals. His Zoom shares are price nearly $17 billion, in accordance with FactSet.

"I'm very happy for him. Really, I really am," mentioned Rob Bernshteyn, CEO of Coupa, whose cloud software program helps corporations hold observe of purchases. Bernshteyn has identified Yuan for 4 or 5 years, and Coupa has lengthy been a Zoom buyer. The solely factor that modified with Zoom utilization at Coupa is the corporate began letting staff use their company Zoom accounts for private conferences.

"I use the word happy," Bernshteyn mentioned. "It's one of the things he's said from day one, wanting to make sure this platform creates happiness. He sure as heck created a great platform and foundation to move in that direction for a lot of people who otherwise wouldn't have been able to be connected."

Coupa's inventory has elevated 144% this 12 months, an ascent that hardly matches Zoom's however nonetheless highlights a 2020 development.

"If digital transformation is accelerating, we probably want to be behind some of the companies that are driving that into the world," Bernshteyn mentioned, making an attempt to articulate what traders have been pondering. The WisdomTree Cloud Computing Fund, an exchange-traded fund that tracks an index of cloud corporations maintained by venture-capital agency Bessemer, has grown 119% this 12 months.

Zoom's growth hasn't at all times come simply. In the spring, after Zoom discovered itself on the receiving finish of unprecedented demand, the corporate was additionally bombarded with considerations concerning the software program's privateness and safety. Then got here the questions on Zoom and Yuan's connections to China. Nancy Pelosi, speaker of the House of Representatives, known as Zoom a Chinese entity on stay tv.

Yuan responded by issuing a submit on a company weblog.

"I became an American citizen in July 2007," he wrote. "I have lived happily in America since 1997. Zoom is an American company, founded and headquartered in California, incorporated in Delaware and publicly traded on Nasdaq."

In June, after Zoom mentioned it had shut down accounts that had hosted conferences commemorating the 1989 protests in Beijing's Tiananmen Square, after the Chinese authorities had introduced the conferences to Zoom's consideration. Sen. Josh Hawley, a Republican representing Missouri, despatched Yuan a letter saying his firm seems to have opted to help censorship relatively than free speech. "Are you trying to curry favor with the Chinese Communist Party?" Hawley wrote.

Yuan advised analysts on the corporate's fiscal first-quarter earnings name in June that, between the utilization surge and what he known as unfavorable PR, he had been confronting severe stress. He mentioned that different CEOs conveyed their help and supplied recommendation.

Weeks later Subrah Iyar, the top of Webex on the time of the acquisition and an early Zoom investor, got here to Yuan's protection.

"I've known Eric since the day he came to the United States," Iyar mentioned in a video posted on his LinkedIn web page. "He's one of the most sincere individuals I've ever met. He embodied the culture we tried to inculcate with Webex: a win-win with our customers, with our partners with our employees."

All the stress would possibly effectively have been price it. Today, in accordance with Bloomberg estimates, Yuan is price two occasions greater than Marc Benioff, co-founder and CEO of Salesforce, which has bought corporations cloud software program for to maintain observe of purchasers since 1999. At Salesforce's investor day earlier this month Benioff, praised Zoom for the function it will probably play for salespeople who can't meet with prospects in particular person.

"I don't think there's been a more important moment in history for sales organizations, B2B sales organizations," Benioff mentioned. "Those sales organizations who did not automate, who did not know how to use Zoom, who did not know how to use Salesforce, they were at a very significant disadvantage this year."

Benioff has a report of making donations, and his firm has lengthy supplied grants to nonprofit organizations. Yuan isn't there but, though this 12 months Zoom did introduce a charitable giving arm it calls Zoom Cares.

"While the key long-term focuses of this foundation are education, climate change, and social equity, our primary grants in Q1 were toward organizations making a difference during Covid-19," Yuan was quoted as saying in an announcement in June.

WATCH: Here's what could also be subsequent for Zoom after the Covid pandemic

Here's what could also be subsequent for Zoom after the Covid pandemicSquawk Alley

based mostly on website supplies www.cnbc.com

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