Tuesday 12 January 2021 1:14 pm

Zoom kicks off $1.5bn share issue as vaccine threat looms

Zoom is set to raise $1.5bn (£1.1bn) in a mammoth share sale as it looks to maintain momentum following a bumper year of growth.

The video conferencing app launched the fundraising today, adding that it could be expanded by a further $225m.

Read more: Whatsapp to launch video calls on desktop in bid to rival Zoom

Zoom did not say what it plans to do with the fresh capital.

Zoom was one of the biggest winners in 2020 as the outbreak of coronavirus forced millions of people around the world to work and socialise remotely.

The New York-listed firm saw its share price surge almost 400 per cent over the year as its daily user numbers ballooned. It now has a market valuation of just under $97bn.

But its stock has gone into reverse in recent months as investors weigh up whether the tech darling can keep up its pace of growth in 2021.

While strict lockdown restrictions remain in place in many parts of the world, the rollout of Covid-19 vaccines has raised hopes of a return to normality this year.

Read more: Zoom shares drop despite lockdown revenue surge

Zoom is also facing competition from rivals such as Microsoft Teams and Google Hangouts, which are vying to win customers amid high levels of demand for video conferencing services.

Facebook has also looked to muscle in on the market, establishing a Workplace function, as well as new video chat services on Messenger and Whatsapp.

JP Morgan is acting as sole bookrunner for the share issue.