Zoom is buying Five9 for $14.7 billion because of the company’s cloud software products that will possibly help Zoom’s revenue post-pandemic.
On Sunday, 18 July 2021, Zoom announced that it is buying Five9, a company that provides cloud contract centre software. The deal comes as employees make a return to the office, and the company prepares for a post-pandemic business.
Eric Yuan, Chief Executive Office (CEO) of Zoom, said that the company is adding the new product because it is continuously looking for different ways to enhance its platform. Yuan added that Five9 is a natural fit for Zoom and it will deliver value to Zoom customers.
Zoom has been a success story since COVID-19 started, when employees were forced to work and communicate remotely. Despite revenue expanding by 326 percent in 2020, Zoom is reportedly facing a decline because companies are re-opening and contact meetings are resuming.
In a bid to accustom itself with the imminent changes, Zoom has reportedly launched several new products. However, the company is reportedly too big to rely on organic growth alone, and needs other revenue sources.
Moreover, Five9 has also seen rapid growth since the beginning of 2020 because demand for call center technology that would allow representatives to do their jobs from home increased. Companies had to reportedly consider cloud software products for their contact centres. Rowan Trallope, the CEO of Five9, stated that customers could no longer deny the need for cloud products. Five9’s revenue reportedly surged by 33 percent to $435 million in 2020.
Lastly, at $14.7 billion, the deal is reportedly Zoom’s first billion-dollar acquisition and is the second-biggest tech deal in the United States (US) in 2021, after Microsoft’s $16 billion purchase of Nuance Communications. The transaction is expected to close in the first half of 2022. In the meantime, Five9 shareholders still have to approve the deal and it requires regulatory clearance.