Rarely does a company ascend so quickly into national consciousness. If you’ve been asked to “Zoom-in” for a work call or spend time “Zooming” with friends during lockdown then you may have noticed that Zoom, a niche US teleconferencing company most had never heard of a few months ago, has suddenly become part of the mainstream, as familiar as “Ubering” when we were still allowed to leave the house.
That’s made Zoom one of the big winners from the crisis. Since the lockdown began, shares in the Californian-based tech firm have doubled in value, helping swell its price tag to $34 billion — making it more valuable than major institutions like Barclays, Lloyds Bank, Tesco and Sainsbury’s.
It’s also meant that founder Eric Yuan joined the Silicon Valley billionaire’s club this month — his net value is now estimated at £4.6 billion.
Latest figures show a staggering 3.2 million mobile downloads of Zoom every day, versus an average of 55,000 a day before the crisis, according to app data company Apptopia.
While Covid-19 has left many businesses reeling, the willingness to experiment with new technologies during lockdown has spawned a fresh batch of tech winners.
Behemoths like Amazon are obvious ones — its share price has rocketed since lockdown (how many times have you ordered Prime so far?). However, newly minted stars such as Houseparty, TikTok and Slack are also reaping big rewards from our radically new ways of living.
Zoom it
Zoom is the poster child of this new clutch of coronavirus stars. The app is the brainchild Chinese-born software developer Yuan, 50, who founded the company in 2011.
Zoom listed on the Nasdaq last year and makes money by offering free accounts and transforming those free users into paid ones by selling expanded features like Zoom Rooms, a physical set-up companies can install in meeting rooms. An office in High Holborn is Zoom’s European hub and London was, along with Sydney, the first overseas city it expanded to two-and-a-half years ago.
While initial awareness of the app was driven by reports that the UK Government was using it to co-ordinate the coronavirus response (a Twitter snap by Boris Johnson cemented its reputation), what has really propelled growth is its use for the myriad of stay-at-home activities, like pub quiz nights, dinner parties and music lessons.
Tech stars
Who are the other corporates winning big from the crisis? Slack — an internal messaging system used by businesses — has enjoyed a boom as people transition to WFH: at the end of March it reported it had added 9,000 new customers in the first quarter, up from about 5,000 in each of the previous quarters.
Last month Slack CEO and co-founder Stewart Butterfield published a viral Twitter thread acknowledging the frenzy of the previous month and his anxieties about the coronavirus pandemic’s effect on people’s lives.
Houseparty, a quirkier video tool belonging to Fortnite owner Epic Games, is the second most downloaded app around the world with 9.2 million mobile downloads last month, a 12,000 per cent increase to the download numbers at the start of the year.
Health and fitness companies are also seeing a surge in demand as people banned from going to the gym aim to stay trim indoors: bike brand Peloton has seen a surge in mobile app downloads and spending after it announced a 90-day free trial, up from the normal 30-day period for the app. New installations of the mobile app, which normally costs £12.99 a month and offers bootcamp, yoga and strength classes, rose 77 per cent year on year, while in-app purchases also jumped 12.2 per cent, according to Apptopia.
Hopes that fitness fanatics will migrate from enjoying the mobile app to buying one of its £1,990 bikes has helped to revive its moribund share price, adding around $3 billion to the company’s value.
Other fitness apps such as Nike Training Club, Map My Run by Under Armour, and Strava have also seen huge spikes in downloads.
And TikTok usage has soared: according to Music Business Worldwide, the video app saw an 18 per cent increase in downloads, and was downloaded two million times between March 16 and 22, a jump from the previous week’s 1.7 million. It also saw a 27 per cent increase in the first 23 days of March compared with February, with 6.2 million downloads.
The future
How quickly will all of this fade once the lockdown ends? It depends what normal looks like. Some argue that the new corporate winners are a short-term phenomenon because people prefer face-to-face contact. But others in the know think the new ways of working will stick.
Many people enjoying the ease of working out from home may not rush to get back into the physical gym once all this is over. On the other hand, Zoom has been the subject of intense privacy and security fears over incidents like “Zoom-bombing”, when uninvited guests invade calls, triggering recent drops in the share price (Zoom has unveiled a string of security updates to combat concerns).
Still, “many more people have discovered the productivity and time savings that video and collaboration tools can bring, and that knowledge will outlast the coronavirus,” says Simon Webber, a top investor at Schroders and former tech analyst. “As social distancing restrictions are phased out, the intensity of our use of collaboration and video apps will decrease somewhat, but our long-term use of them has been irreversibly boosted.”
