How does Zoom make money is one of the big questions for entrepreneurs and investors who wish to enter the video conferencing industry?

There were other big video conference giant companies before Zoom started. One of them is Skype and Hangout by Google.

However, Zoom became the go-to app during the Covid-19 outbreak when more businesses and schools decided to work from home.

Zoom became the most downloaded video conferencing app during the lockdown, and this has helped the company increase its assets over time.

Zoom increased in revenue since 2020, and it’s still going up. But the question is, how does zoom make money?

In this post, you will discover the history of Zoom and how it makes most of its profit. Read on to learn more about Zoom!

How Does Zoom Work?

Zoom is a cloud-based video conferencing service you can use to meet with others virtually, either by video or audio-only or both, all while conducting live chats, and it lets you record those sessions to view later.

You can use Zoom on your mobile phone device or desktop for windows PC and macOS. Again, Zoom is available as an Outlook plugin, as well as Firefox and Chrome extensions.

Zoom is one of the best video conferencing software used by many businesses, schools, online coaches to host their business meetings.

The zoom interface is amicable, and it provides you a screen-sharing feature that puts participants on the same page.

During a meeting on Zoom, participants can raise their hands to alert the host they have something to say or would like to react. This feature makes Zoom a helpful and friendly app.

With Zoom, you can invite participants, schedule a meeting, record a meeting session, start or record a video, you can turn off-mic, and it also has a live chat feature that connects members.

Many big companies and businesses used the Zoom app to host their business meetings. Zoom provides many other essential products like the Zoom webinars, Zoom phone, and the app marketplace that provides business suits to entrepreneurs.

History About The Zoom App

How does Zoom make money? Before arriving at the answer, let’s consider how Zoom started in the first place.

Before starting his own company, Eric Yuan spent 14 years leading engineering teams at WebEx. As one of the first twenty software engineers, he joined WebEx, a web and video-conferencing application. In 2007, Cisco acquired WebEx, and eventually, Eric became VP of Engineering.

He learned so many great things from WebEx, especially the user experience with the WebEx conference. He was ideally working on learning new things, which helped him become one of the successful entrepreneurs today.

At Cisco, Eric realized most of their customers were having issues with the video conference system. He saw that the WebEx conference lacks so many exciting features like screen sharing for mobile, and also it runs slow, which always frustrates their customers.

Later in 2011, Eric Yuan developed the fire to start his own company and structured a team of 40 Cisco engineers to come with him and pursue this burning desire. The company first started as Saasbee but later rebranded to Zoom.

Like I always say, every start-up business owner has a story. Eric Yuan faced so many challenges and competition when starting.

He has to compete with the existing video conference giants like Skype, Hangouts (a product of Google), and WebEx, his former company.

And because, Zoom was new in the system, attracting investors was another problem for Eric Yuan and his team.

Within his team of like-minded people were Subrah Iyar, another WebEx CEO, who, because of his heartfelt and technological experience, provided Yuan with the needed credibility to raise $3 million as a seed for Zoom.

Zoom grew more rapidly than its much larger competitors because it made things easy for its users. Easy to set up, easy to use, easy to change one’s background.

How Does Zoom Make Money

Downloading and using zoom is free, but how does zoom make money then? Let’s narrow it down to see how zoom makes money and, at the same time helping more businesses and companies.

Zoom offers packages or services to help its consumers. It provides free and paid packages for everyone’s needs.

Zoom earned money when individuals or companies decided to buy its premium or paid packages. And below are the services zoom provides:

✔ Meetings And Chats

Zoom Free: The free plan is for personal use only. It only hosts 100 participants and has a 400 minutes video duration.

Zoom Pro:This plan costs $14.99/£11.99 per month and a meeting host. You get a participants capacity of 100 and a 30 hours conference duration.

Zoom Business:  The Zoom business plan costs $19.99/£15.99 per month and a minimum meeting hosts of 10. You also get a conference duration of 30 hours and a capacity of 300.

Enterprise: This plan costs $19.99/£15.99 per month and per meeting host, a minimum of 100, and is meant for businesses with 1,000+ employees.

✔ Zoom Phone

Another way that zoom makes money is their cloud phone calling. The Zoom call allows you to have a call without a video. This package costs $14.99/month for every host and has other features like messaging, call recording or blocking, voicemails, etc.

✔ Zoom Video Webinars

The Zoom webinar license costs $14.99/month up to $64,900.00 /year/license. It allows up to 10,000 participants starting with 100.

The Zoom webinar is slightly different from the Zoom meetings. The host controls the participants’ view with the Zoom webinar, and they can only interact in the questions and answers (Q&A) section or the chatbox.

✔ Zoom Rooms and Workspaces

The Zoom Rooms and Workspaces is one of the best options for big companies and businesses, and it comes with a $499/year/room subscription fee.

Summing Up

As mentioned earlier in this post, it was 2020 that Zoom took off. With people confined to their homes, apps that allowed us to stay in touch became central to our day-to-day lives.

Zoom generated $2.6 billion in revenue in 2020, a 317 per cent increase year-on-year. And another to consider when asking how does zoom make money. Zoom’s top investors are the National Science Foundation and the Corporation of Public Broadcasting, Horizon Ventures, Emergence Capital, Ame Cloud Ventures, etc.

FAQs: How Does Zoom Make Money