Zoom: The Startup That Redefined Remote Work

When Eric Yuan left Cisco Webex in 2011 with nothing but a bold idea and a small team of engineers, few believed the world needed yet another video platform. But Yuan was not just chasing a trend. He wanted to fix what others had overlooked: a Human-first approach to virtual connection. That vision turned into a Zoom, a startup that went from supporting a handful of early adopters to becoming the stage for classrooms, boardrooms, and summits. Today, Zoom isn’t just a video platform; it’s a symbol of how technology can redefine human connection. Let’s explore the Zoom success story and the innovative Zoom business model that reshaped the future of remote work.

Zoom’s Business Profile

Source: 

Eric Yuan’s Vision: From Cisco Webex to Starting Zoom

Source: Entrepreneur 

Zoom was founded by Eric Yuan, a former corporate vice president for Cisco Webex. Eric left Cisco in April 2011 with 40 engineers to start Saasbee, Inc. They were facing trouble in finding investors because many people perceived the videotelephony market as highly saturated. However, in June 2011, they were able to raise seed money of $3 million from WebEx founder Subrah Iyar, Cisco SVP and General Counsel Dan Scheinman, and venture capitalists Matt Ocko, TSVC, and Bill Tai.  

By being influenced by Thacher Hurd’s children’s book Zoom City, they changed the company name to ‘Zoom’ in May 2012. In September, Zoom launched a beta version that allowed hosts to conduct conferences with up to 15 video participants. Then, in November, they signed with their first customer, Stanford University. 

What made Zoom different from its competitors was its combination of reliability, simplicity, and pricing. Unlike Webex or Skype, they could maintain strong video and audio quality even on low-bandwidth connections. Their interface did not require any training or technical expertise, which made them attractive for businesses. 

Rapid Growth & Global Expansion

Source: Wikipedia

They launched version 1.0 of the program that allowed 25 maximum participants per conference. By May 2013, they already had 1 million users. In July, they established partnerships with B2B collaboration software providers, Redbooth. They created a program named ‘Works with Zoom’, which helped them establish partnerships with Logitech, Vaddio, and InFocus. 

Around this time, Zoom had already begun expanding globally. By the end of 2014, they expanded operations to Europe and the Asia-Pacific by setting up offices. This expansion allowed Zoom to attract enterprise clients across industries.  

In February 2015, Zoom had 40 million users, with 65,000 organisations subscribed and a total of 1 billion meeting minutes since its establishment. Over the period of 2015 and 2016, they integrated their software with Slack, Salesforce, and Skype for Business. With version 2.5 in October 2015, they increased the maximum number of participants per conference to 50 and later to 1000 for business customers.

Zoom became a Unicorn Company.

Source: Telecom Review Asia

In January 2017, with a valuation of $1 billion, Zoom became a Unicorn company. From 2017 onwards, Microsoft Teams, Google Meet, Cisco Webex, and Slack were aggressively building video features. While these competitors had large ecosystems, Zoom remained a preferred choice through ease of use, faster product updates, and a reputation for stability.  

In April 2017, they launched a scalable telehealth product that allowed doctors to host remote consultations with patients. In May, they announced integration with Polycom’s conferencing systems, offering features such as multiple screen and device meetings, HD and wireless screen sharing, and calendar integration with Microsoft Outlook, Google Calendar, and iCal.  

In September, they also hosted ‘Zoomtopia 2017’, their first annual user conference. At this conference, they announced their partnership with Meta Platforms to integrate Zoom with AR [Augmented Reality], Slack and Workplace by Facebook. This led them towards an AI Speech Recognition Program. By 2018, more than half of their revenue was already coming from outside the U.S.  

In April 2019, they became a public company by listing on an IPO on Nasdaq under the ticker symbol ZM. After pricing at $36 per share, the share price increased by over 72% on the first day of trading. Before the IPO, Dropbox had also invested $5 million in Zoom. Finally, in 2019, they became profitable. 

Zoom’s Pandemic Boom

Source: PCMA

During the COVID-19 pandemic, there was an increase in remote work, distance education, and remote social relations, which substantially increased the usage of the Zoom mobile application. In 2020, Zoom was the 5th most downloaded mobile app behind TikTok, WhatsApp, Facebook, and Instagram. Hence, between December 2019 and April 2020, they experienced 30x growth in daily meeting participants.

Zoom offered free services to K-12 schools in many countries. They also joined the Nasdaq-100 stock index in April 2020. In May, they acquired Keybase, a company specialising in end-to-end encryption. In June, they hired their first Chief Diversity Officer, Damien Hooper-Campbell. 

Security Challenges

This sudden surge in usage also exposed weaknesses. In 2020, Zoom faced heavy criticism for security and privacy lapses, most notably ‘Zoombombing’ incidents, where uninvited users disrupted meetings. They also faced lawsuits and regulatory scrutiny. However, they responded quickly, accelerating security improvements, publishing transparency reports, and strengthening encryption capabilities. 

In July 2020, Zoom announced the opening of a technology centre in Bangalore to host engineering, IT, and business operations roles. They also announced their first hardware-as-a-service products, which bundle their videoconferencing software with third-party hardware by DTEN, Neat, Poly, and Yealink and run on the ServiceNow Platform. They began with Zoom Rooms and Zoom Phone offerings, along with the services available to US customers who can acquire hardware from Zoom for a fixed monthly cost. 

In August 2020, they launched Zoom for Home, a line of products for home use, designed for remote workers. The first product is Zoom for Home-DTEN ME, which comes with software offered by Zoom and hardware by DTEN.

In September, Zoom added new accessibility features for those who are deaf, hard of hearing, or visually impaired. These features include the ability to move around video windows in gallery view, pin video windows to be spotlighted, improved keyboard shortcuts, new tools to adjust the size of closed captioning text, and sign language interpreters’ windows can now sit directly next to the speaker. 

In October, they added end-to-end encryption for free and paid users. They also unveiled ‘OnZoom’ in October 2020 at Zoomtopia. OnZoom is a virtual event marketplace with an integrated payment system where users can host and promote free or paid live events. In addition, they announced Zoom Apps, a feature that integrates third-party apps so they can be used within the Zoom interface during meetings.  

By late 2020, Zoom had reached 300 million daily meeting participants. After the pandemic boom, usage eventually stabilised as offices reopened and competition got intense.

Zoom also signed a carrier agreement with ‘Global BT Business’ to offer a fully managed Zoom meetings service featuring a choice of connectivity and integration with their global voice network. In February 2021, they added a ‘Virtual Receptionist’ feature in the Kiosk Mode for Zoom Rooms to cater to in-person visitors at a business to interact in the lobby without physical contact. 

In June 2021, Zoom acquired Kites, an AI-based language translation company, to reduce language barriers in video calls. In September 2021, they also attempted to acquire Five9, a contact centre company, for $14.7 billion, but were turned down by Five9’s shareholders. 

Zoom Pivots towards AI-Driven Future

In 2023, Zoom launched Zoom AI Companion. In April 2023, Zoom acquired Workvivo to extend the Zoom platform. By 2023, they had more than 200,000 enterprise customers, signalling a shift from casual consumer use to long-term enterprise contracts. 

In November 2024, Zoom Video Communications, Inc. rebranded as Zoom Communications, Inc. They began positioning themselves as an AI-first platform after removing the word ‘Video’.

In 2025, Zoom introduced ‘AI Companion 3.0’ at Zoomtopia, which has advanced agentic AI capabilities, such as allowing meetings and conversations to turn directly into actions. Microsoft Copilot and Google Duet AI were also pushing similar offerings, but they differentiated themselves with a focus on data privacy and cross-platform openness. They have also introduced a Custom AI Companion for AI safety and customisation options. 

Funding 

Financials 

Zoom earned $1,217.2 million in total revenue for the second quarter of fiscal year 2025, with 4.7% growth from the previous year. While the GAAP operating margin stood at $321.7 million, with an increase of 26.4% and the Non-GAAP operating margin was $503.2 million, with an increase of 41.3% from the last year. 

Awards and Recognition

• In 2018, Eric Yuan won the EY Entrepreneur of the Year for the Northern California, SaaS category. 
• In 2019, Zoom ranked second in the ‘Best Places to Work’ survey of Glassdoor. 
• Zoom was also recognised with Frost & Sullivan’s Global Company of the Year Award for Global Conferencing.
• In 2020, they won the Webby Award for Best Business/Enterprise App and were also included in Forbes’ Cloud 100 list. 
• In 2022, they were recognised by BrandZ as one of the world’s fastest-growing global brands. 
• In 2023 and 2024, they were recognised as leaders in the Gartner Magic Quadrant for UCaaS.
• In 2024 and 2025, they were recognised among the ‘World’s Most Innovative Companies’ list by Fast Company. 
• In 2025, they won the Engineering, Science & Technology Emmy Award.  
• Zoom was recognised among the most prestigious ‘Fortune’s Most Admired Companies’ list.

Conclusion 

The Zoom success story is proof that simplicity, innovation, and user empathy can disrupt even the most crowded markets. From being dismissed as just another video app to becoming a global communication powerhouse, Zoom has redefined the way the world connects.

With its evolving Zoom business model and strong focus on AI innovation, Zoom continues to lead the future of work—empowering businesses, educators, and individuals to collaborate seamlessly from anywhere.

FAQs

Q1. When did Zoom become a Unicorn company?
Zoom reached a $1 billion valuation in 2017, officially becoming a unicorn.

Q2. What is Zoom’s business model?
Zoom follows a freemium SaaS model, offering free basic plans and paid enterprise subscriptions for advanced features.

Q3. What is Zoom’s AI Companion?
Zoom AI Companion is an AI-powered tool that summarizes meetings, suggests next steps, and enhances productivity.