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Posted by Richy George on 16 April, 2020This post was originally published on this site
US carrier Verizon* has splashed out to buy veteran b2b videoconferencing platform, BlueJeans Network — shelling out less than $500 million on the acquisition, according to the Wall Street Journal which first reported the news.
A Verizon spokeswoman confirmed to TechCrunch that the price-tag is sub-$500M but did not provide a more exact figure. Videoconferencing platform BlueJeans has raised ~$175M since being founded around a decade ago, per Crunchbase, with US investor NEA leading a Series E round back in 2015.
In a press release announcing the deal, Verizon said it has entered into a definitive agreement to acquire the enterprise-grade videoconferencing and event platform in order to expand its “immersive unified communications portfolio”.
“Customers will benefit from a BlueJeans enterprise-grade video experience on Verizon’s high-performance global networks. In addition, the platform will be deeply integrated into Verizon’s 5G product roadmap, providing secure and real-time engagement solutions for high growth areas such as telemedicine, distance learning and field service work,” it wrote.
“As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools,” added Tami Erwin, CEO of Verizon Business, in a supporting statement. “Collaboration and communications have become top of the agenda for businesses of all sizes and in all sectors in recent months. We are excited to combine the power of BlueJeans’ video platform with Verizon Business’ connectivity networks, platforms and solutions to meet our customers’ needs.”
The acquisition comes at a time when videoconferencing has been seeing a massive uptick in usage as white collar workers around the world log on to meetings from home during the coronavirus pandemic.
Although it’s BlueJeans’ rival, Zoom, that’s been the most high profile name linked to the viral videoconferencing boom in recent weeks. The latter recently revealed that daily meeting participants on its platform jumped from a modest 10M in December to 200M in March.
However such booming growth and consumer usage has brought increased scrutiny for Zoom — leading to a spate of warnings (and even some bans), related to security and privacy concerns. And earlier this month the company said it would freeze product dev to focus on the laundry list of issues that have surfaced as users have piled in and kicked its tires, taking a little of the shine off of surging growth.
On the sheer usage front BlueJeans is certainly small fish in comparison to Zoom — having remained b2b focused. A BlueJeans spokeswoman told us it has more than $100M ARR and over 15,000 customers at this point. (Some notable users include Facebook and Disney.)
But it’s paying users that are likely of most interest to Verizon, hence talk of telemedicine, distance learning and field service work — areas ripe for coronavirus-accelerated digitization.
Carriers generally, meanwhile, haven’t been able to translate increased usage during the pandemic into a revenue growth story — as a result of a combination of fixed costs, debt and market disruption that’s been hitting their shares during the coronavirus crisis, per Reuters.
“The combination of BlueJeans’ world class enterprise video collaboration platform and trusted brand with Verizon Business’ next generation edge computing innovation will deliver highly differentiated and compelling solutions to our joint customers,” said Quentin Gallivan, BlueJeans CEO, in a statement. “We are very excited about joining the Verizon team and we truly believe the future of business communications starts today!”
BlueJeans co-founder Krish Ramakrishnan has a history of exits, selling a couple of his previous startups to networking giant Cisco — where he has also worked, in between spinning out his own companies.
Verizon said today that said BlueJeans founders and “key management” will join the company as part of the acquisition, with BlueJeans employees set to become Verizon employees immediately following the close of the deal — which is expected in the second quarter, pending customary closing conditions.
*Disclosure: Verizon is also TechCrunch’s parent company
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